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3 ways to be sure you're not raising a spoiled child

As a father himself, New York Times columnist and author, Ron Lieber, couldn't help but notice that most parents he knew all seemed to share one common fear: raising a spoiled child.

Most people might agree that it’s never been more important for young people to understand the financial world and how to build wealth. But money is still a taboo topic in many households. So Lieber wanted to figure out exactly how parents can teach their kids to respect and understand money, without feeling entitled to it. The result is his new book, "The Opposite of Spoiled," released on Feb. 2.

“Kids pick up way more than we think they do,” Lieber says. “I don’t know if we do them any favors by trying to protect them from the truth [about how money works]. But there’s a right and a wrong way to explain it to them.”

His book outlines what every parent probably wants to know: How do I make sure I’m not raising a spoiled brat?

1. End the epidemic of silence around money.

Lieber tackles ways to handle some of the most awkward money questions kids ask growing up: Are we poor? Why does my friend have a bigger house than ours? How much do you earn?  

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His advice for handling the latter — How much do you earn? — kicked up a firestorm online when he encouraged parents to tell their kids exactly how much they took home in a recent blog for the Times. Being transparent about how much money is coming in and where that money is going — to insurance bills, to cable TV, to Cub Scouts — is a good way to teach kids the basics of finances and teach them where their own values should be.

“After [kids] have several years of earning allowance and several years of learning and thinking about the basics of the family budget, then you can tell them,” Lieber says. “But they get it when they have context for it and they’ve… proven they can keep it private.”

If kids grow up watching their parents designating a certain amount of their income to charitable causes, chances are that money lesson will stick. Ditto for lessons about investing. Lieber’s father helped him buy his own mutual fund when he was a teenager.

2. Let them practice what you preach.

Lieber says starting kids on an allowance when they’re as young as 5 or 6 years old is a good way to start conversations about money early. But he is strictly against doling out cash to kids for doing household chores — they should be expected to do that kind of stuff for free, just like parents are, he says.

By middle school, kids should be allowed to help manage a small budget for something they benefit from, like back to school clothing. And, of course, when they can legally hold a job, he suggests making holding down a part-time job a household requirement.

3. Make sure they understand there will be consequences for their actions.

One key ingredient in the four-part recipe Lieber says creates spoiled children is when kids aren’t used to facing consequences for their actions. He's against "helicopter parenting" (actually, too much attention is another common thread among spoiled children, he says) but kids need to know that they won't always be bailed out by Mom and Dad if they run into trouble.

The bottom line: Central to Lieber’s philosophy surrounding the discussion of family finances is that money should be seen for what it really is: a tool to help children learn where to place their own values as they grow up.

“Things like modesty and patience and thrift and perspective and generosity and curiosity and perseverance,” he says, “These are the things we can teach them using money as one of the central teaching tools.”

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