Avoiding “Silver Spoon” Syndrome

Physicians' kids typically grow up with most of their financial needs met. So how do you teach them the value of money?

Some things never change. Think of Officer Krupke’s plaint in the 50s “West Side Story,”—“What’s the matter with kids today?”—or today’s often-decried entitled, privileged Millennials. But 2016’s affluent docs’ families have a new tension, between the “I don’t want my kids to go through what I had to go through” of previous generations versus the unprecedented opportunities facing the “self-esteem”-oriented kids today.

There is the usual wide variation in opinions about how best to raise children, even among academics, but there is consensus among many about how to financially ground children in an age-appropriate way. You know, unlike what many of us experienced. “Don’t discuss money in front of the children!”

Actually, experts agree you should. There are everyday teachable moments that will make sense to kids and increase their sense of understanding.

If your child is between ages 3 and 5, you can create three jars to start their thinking about money. There is the ever-popular Spending jar, the harder to grasp Saving jar (“Why can’t I spend it now?”), and the even more ephemeral Sharing jar. This is a good time to plant the acorn of goal setting for each jar. You know, the whole wants versus needs thing.

In the 6- to 10-year-old year old range, the idea of choice is further developed. Let them know that money is finite. At the grocery store, for instance, give them, say, $2 and ask them to pick out some fruit. Including them, even in small ways, in the family’s financial decision-making becomes a powerful learning tool.

At ages 11-13, some experts think it’s not too early to consider introducing the concept of compounding. They have the basic math by now, so use simple, specific examples, eg, making 10% on their saved $100 gets them that much closer to their goal(s).

Once kids get to ages 14-18, college choice looms importantly. So make sure that aside from all the usual criteria, cost and payment means are discussed and considered as factors in the final college decision. Maybe it is time to take on a part-time or summer job. I have always said that everyone should have the experience of serving the public, perhaps waiting tables, as part of their growing, learning experience slate. Very humbling and, potentially, empowering.

After 18, a credit card could be discussed. But only for emergencies or if there is demonstrated ability, and will, to pay it off each month that it is used. How to choose the card and the whole idea of credit can be as important to adult functioning as any course in school, probably more, if my organic chemistry class is an example…

The concept of an allowance is a hot button. Most agree that kids could benefit from one, from a relatively early age, to use with their jars. The question is whether or not it should be linked to the child’s age-appropriate home chores. Many say not. Rather, perhaps add a bonus for a job especially well done or for a new idea for home improvement.

Some final thoughts: Be consistent. Parents know that this applies to all things, but especially money affairs. Secondly, find opportunities to practice gratitude. So if you want to spoil your children, do it with financial literacy. The bottom line for us all is that with privilege comes responsibility. And it is never too early to start learning, or too late, when it comes to money.