What do you say when your child asks, "Are we rich?" or "Do you make more money than Daddy?" or the dreaded, "Why don't we have a fill-in-the-blank?" In his book, "The Opposite of Spoiled," New York Times columnist Ron Lieber offers tips for answering kids' questions about money and raising socially aware and fiscally smart adults. He'll also explain why he thinks allowance should never be tied to chores.
On When to Start Talking to Kids
"The child development Ph.Ds at children's television workshop, which produces Sesame Street, they looked at this several years ago before putting Elmo up to doing a financial literacy curriculum on the show and they found that 3-year-olds are ready to talk about the difference between wants and need, they understand that on a very basic level.
"I think a good time to start might be the moment that the tooth fairy arrives for the first time. You know kids wake up and find a couple bucks under their pillow, or some gold dollar coins or some money from a different country, and at that point they often want some more. They sense that money can do some things for them, that they probably don't have enough to get the things that they want, so maybe that's the point at which, at age 6 or 7, you start them on an allowance of $3 or $5 or $7 a week."
On Spend, Give, Save Jars