Tips for Raising Kids Who Are Grounded, Generous and Smart About Money

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A conversation with Ron Lieber, author of the newly released book on kids and money, "The Opposite of Spoiled."

Ron Lieber has spent the past seven years penning some of the smartest consumer stories you can read at The New York Times in his Your Money column. The last time you saw him, perhaps he was (politely) arguing with Suze Orman about her personal-branded prepaid debit card (he won), or asking just the right questions (perhaps too politely) about Tony Robins’ new, amateurish best-selling book on personal finance.

Now, he’s written one of the smartest parenting books you can find, “The Opposite of Spoiled,” by taking on the challenging topic of kids and money. By starting the uncomfortable conversations, Ron reveals what a wonderful teaching tool money can be, a tangible way to instruct such virtues as saving, charity and sensible spending. Full of practical, battle-tested suggestions (Ron has a 6-year-old daughter), you’ll find the book both a fun read and a great reference tool you’ll want to have on the shelf near the piggy bank and the TV remote. As a bonus, you’ll finish the book with new insights in how money affects your family and your own feelings about the future.

Ron is also a friend — the personal finance writer circle is relatively small — so you can take my lavish praise with the appropriate grain of salt.

The book was released this week, and I luckily persuaded Ron to sit long enough for a little talk about money, kids and my favorite topics: fighting off scams and getting a fair deal. Today, I’m publishing the first part of our chat. Look for the rest later this week.

opposite of spoiled Q. It’s great to teach kids to be thoughtful and generous with money. How do you suggest parents teach them to be careful with it — as in, to be careful about a world full of charlatans, snake-oil sales folks, or used-car sales types who will try to separate them from their money? And how do you teach healthy skepticism without instilling unhealthy cynicism?

Lieber: My favorite way to do this is with something I call the fun ratio. It’s a math lesson and consumer protection tool all rolled into one, and it came from an Ohio family that I interviewed.

The big idea is to try to put it to work before you buy. With toys, the question is how many hours of fun do you think you’ll get out of this? And how many dollars does it cost? You do the division and you get a ratio, which you can then compare to other things. It’s good to do this with toys when you’re about to give them away, too. If the ratio is poor, that’s a good lesson.

As kids get older and can understand credit card statements, it’s interesting to look at those too when it comes to evaluating experiences. Do we remember anything we ate at that restaurant? If not, then the pleasure per dollar must not have been very high. You can treat vacations (and the money you spend on them for excursions or activities) the same way.

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