What Should Say When Your Kids Ask “Are We Rich?”

Hey Mom, are we rich?  Has your child asked you this question, or it’s opposite, “Are we poor?”. We have and it is a doozy.  Here is how you can deal with this question when you get it.

Let me start by repeating something I’ve said a few times. I’m very fortunate. I grew up with all my needs met, and I currently do the same for my children. I acknowledge that much of that privilege came from the luck of the timing and place of my birth. Had I been born somewhere else, or at some other time, I would not have had all the opportunities that I did. I also acknowledge that I have worked for what I have.  But just the fact that I was able to be educated, to be in a position to work, makes me one of the lucky ones in this world. So with all that said, yes we are rich.

Us vs The World

If we compare our situation to the vast majority of the people in the world, we would have to acknowledge that we are rich. Are We Rich Vs the WorldThe majority of the world makes much less per person than that of my family and me. And that is true for most of the people in my community. I have to believe that would also be true for most of the people reading this. According to where most of my readers are based, and those countries average income per/capital. Which means by those standards, we are very well off.

Us vs The Neighbourhood

But let’s be honest, when our children ask are we rich or poor questions they are not comparing us to households around the world.  They are Are We Rich vs neighbourhoodcomparing themselves to their friends down the street. They want to know how their family stacks up compared to the friend with a new pair of Jordans on, or a Nintendo Switch. Are we rich compared to those families?

I think this comparison starts early.  Our kids are not much different than us. I won’t pretend that I don’t look at clothing, cars, and other items and try to estimate where I fit economically compared to my peers. I like to believe that I don’t, but I would be lying if I said I didn’t. But with age and a bit of wisdom, I think that whatever mental calculus I do when I see those items I still treat the people I meet the same way regardless. It may be hard for me to stop doing mental math, but it has always been easy for me to treat people as people, I thank my parents for that.

What’s the  Answer?

If this question comes up, and I am positive it will come at some point, I would suggest you avoid diving deep into your pay stubs and tax returns. Start by asking a simple, “Why do you ask?”.  In addition to buying yourself some time to formulate an answer, it will also give you a chance to address what is at the root of your child’s question. Maybe they are comparing what they have versus what other’s don’t or perhaps it is something altogether different.  First, try to get to the cause of the question before you dive in.

Regardless of where your child is coming from with the question, I would suggest you work on defining the terms “Rich” vs “Poor.”  In our family being rich is as having enough money to cover all the needs of your family.  When talking about being rich or poor is a great time to identify needs vs wants if you haven’t already done so. If you have all your needs covered and you have money left over to buy your wants I consider that rich. Poor, on the contrary, is when you do not have enough money to cover all of your needs.

Definitions Matter

With that simple definition, it is easy to understand why we can feel poor while we are some of the wealthiest people in the world.  If we start to believe that having the newest smart-phone is a need, but we can not afford it, then we will feel inferior.   Similarly, people with very little can feel wealthy if they want for little.  I don’t want to stray into the ills of consumerism, but if you get into this discussion, you can easily segway into how wanting more can make you feel bad.

It is easy to grasp the “keeping up with the Jone’s” effect.  The more we see others have, the more we want, the more we want, the less we feel like we have.    To counteract this effect, we practice gratitude.  I think it is essential to fight against the endless want so that we can appreciate what we have.   

Be Honest

If this question arises for you.  Be honest about your situation.  Provide your children with both comfort and clarity. Let them know that you, as their parent, will do everything in your power to supply them with all the needs that they have.

If this question arises out of wanting for more stuff let them know that not getting all of their wants met, right when they want them is a good thing too.  Remind them how much more valuable items feel when they have to save.  Remind them how fortunate they are.

“Are we rich/poor?” is not an easy question to answer, but answer honestly for your situation, and you will be fine.  Let me know what you have said to your little ones when this question has come up.



The Ultimate Guide to Giving Kids Allowances

The Ultimate Guide to Giving Kids Allowances

In this ultimate guild to giving kids allowances article, you’ll learn not only why you should start giving an allowance, but the best practices for all ages.

Starting an allowance can be daunting.  How much do you give, how often, what do you let them buy? Let this guide help simplify everything about allowances.





Should Kids Get an Allowance?

If you are looking for a reason to start giving an allowance, look no further than the latest headlines.

  • Outstanding student loan debt reached an all-time high of $1.41 trillion in 2019.
  • 75 percent of Americans are winging it when it comes to their financial future      
  • Year over year, money is the number 1 cause of stress among Americans

    More debt, less planning, and more stress.  All of these headlines are due to a growing lack of financial literacy.  Financial literacy is just a fancy way to say an understanding of how to make informed financial decisions

Should Kids Get an Allowance?

Poor financial literacy skills lead to people of all ages spending more on fees, saving less, and in general, making financially poor decisions.  On the opposite side of that coin, in addition to having higher savings rates, and paying less in fees, 87% of Americans agree that ”nothing makes them happier or more confident than feeling like their finances are in order.”

What do any of those stats have to do with an allowance?  Experts believe that “allowances are powerful tools” to teach the basics of financial literacy to children.  They note that allowances provide your children with hands-on opportunities to make choices that will directly impact their financial knowledge.

That leads to the obvious question of how effective are allowances at teaching the skills required to manage money. With all the fuss over allowances, you would think that question would be an open and shut case.  But surprisingly, there has been very little hard research to back allowances as a successful means of cementing financial principals into our young ones’ minds. Denise Cummins, Ph.D. and author of Good Thinking, The Historical Foundations of Cognitive Science, and Evolution of Mind combed through the literature for an article in  PsychologyToday.com. She was only able to find one   of purport published 1991 that demonstrated that “receiving an allowance did impact children’s financial responsibility.”

She was only able to find one study of purport published 1991 that demonstrated that 

… children who get allowances are more sophisticated about money than those who do not.

Even with the lack of scientific evidence, we can use common sense and analogies to make a case for allowances.  Managing money is complicated.  It requires not just basic arithmetic, but also psychological discipline.  The ability to delay gratification, manage the feelings of both being better off than some, while also having less than others, all while balancing your wants against your needs.  And that doesn’t even start to include the nitty-gritty of managing debt, investing, budgeting and all the other aspects of money management.

How do we teach complex tasks to children?  Do we show them a piano and expect grand performances?  Do we provide them with a car and expect them to know how to drive?  Of course not. When your child first starts to learn to drive, they begin with the theory.  But that is not enough to get behind the wheel.  They need you sitting beside them.  You are there to coach them.   You start in a safe place, like a parking lot at first. Eventually, you begin to take some side streets, increasing the complexity bit by bit.  Once they have shown their competence, they are ready for the main event, major main roads and highways.

Giving an allowance is very similar.  You start with small amounts of cash; that is their parking lot.  It is a safe, confined space to make mistakes.  You are right there beside them, ready to coach them.  They are still holding the wheel, making financial decisions, but poor judgment now will not cause their credit to tank or creditors to start calling.  As they demonstrate more competencies, you increase their responsibilities.  Soon they will be managing a budget of their own.  But only after they have shown mastery of the necessary skills. 

An allowance is a powerful tool when used correctly.  But giving an allowance alone is not sufficient to teach financial literacy.  Your kids need you sitting beside them to coach them. For example, a 2019 survey conducted by the American Institute of Certified Public Accountants showed that while the vast majority of parents, 92 percent, agreed it is “very important for their child to understand how to effectively manage their money,” only 3 percent of children are saving a portion of their allowance.  Also, little more than 3 in 10 (32 percent) parents are teaching their children about money monthly or less, that is including 7 percent that never talks to their kids about money”.  Those percentages demonstrate an unfortunate lack of engagement on the part of parents.

The allowance plus your guidance is required if you hope to teach your kids life skills that they will need as an adult.  With the combination of allowance and coaching, there are no other tools that can make the same impact on a child’s financial literacy education.



Allowance for Chores?

There is no bigger controversy when it comes to allowance giving.  “Should an Allowance be tied to Chores?”

The short answer is no.  If you want to know why ask yourself what the purpose of an allowance is.

As I noted above, allowances are a great tool to teach financial literacy to children.  But many people disagree that that should be the only goal. Some want to give allowances to teach work ethic.

The thinking goes; how else will my child learn the value of a dollar if I give them money for free?  They need to work for it, just like I do.

Here is the problem with this approach you are building a trap for yourself. 

Allowance for Chores?

The Pay for Chores Trap​

The trap that an allowance for chores creates occurs the moment your child decides they are willing to forgo their pay.  The tasks still need to get done, and you no longer have leverage. 

You have two options:

  1. You can force your child to work without compensation (which was fine before you started to pay them, but now they will claim it is forced labor, akin to slavery),
  2. You can let your child stop working, tasks around the house go undone, and there are no real ramifications to your child (you can’t fire your kids from your family)

Either way, once the trap is sprung, you are not teaching lessons about paid work or how to manage money. Lose-Lose.

While I get the sentiment behind this thinking, the logic is flawed, and the research bears this out.

The pay for chores argument while coached in work ethic is usually a cover for leverage. While you may think that tying an allowance to chores will provide you with the leverage you need to keep your child’s room clean, you may want to think twice.  The idea is that money will be the carrot to get the child doing their chores, and the withholding of the funds will be the stick. 

That goes against the current science on how best to motivate and sets up a terrible precedent.

A brief detour is needed to discuss intrinsic vs extrinsic motivation.

Intrinsic motivation: Curiosity, Challenge, Mastery
Extrinsic motivation: Money, Rewards, Praise

There is no better speaker on this topic than Motivation expert Daniel Pink, in his book Drive he hit the nail on the head when he said

“…if students get a prize for reading three books, many won’t pick up a fourth, let alone embark on a lifetime of reading”

Extrinsic motivation limits creativity, enthusiasm and dedication.
Intrinsic motivation, on the other hand, can fuel internal drive, mastery and ingenuity.

That is not to say that extrinsic motivation doesn’t have its place.  There is a lot of evidence to show charting with rewards can be an effective means of short-term motivation to build good habits.  But do not create an allowance chart for kids. If you are hoping that the use or absence of money will keep your kids in-line doing their chores, you may find yourself in the Pay for Chores Trap.

I know trying to create an intrinsic motivation to finish homework can be a challenge that even I don’t have a solution to, I have to concede that it is the better method for developing well-adjusted adults.

You cannot be a parent and a boss.  If you are trying to teach work ethic, help find your child summer or afterschool jobs.  A real boss will ensure your child understands work ethic.

Money as a motivator only goes so far.  On the contrary, it may harm your attempts to build a strong work ethic.  Don’t fall into the Pay for Chores Trap. If you need to take something away for incomplete chores, take away a privilege. They should get their allowance regardless of the tasks they complete. The money they receive is their chance to practice only management.  Just as you would still have your child go to piano lessons if their room was a mess, allow them to practice handling money even if their socks are always on the floor.

Do not take away essential practice time, and don’t tie chores to allowances.



What is the Appropriate Age to Start an Allowance​?

 The sooner you start, the better.  The more time you give your child an allowance, the more time you give them to learn as much as possible. Also

“The sooner they learn, the more likely it will stick when it matters most,”

says Eric Pucciarelli, the Vice President of oXYGen Financial.


What is the Appropriate Age to Start an Allowance?

When determining when your child should be given an allowance, consider these two factors: interest, and ability.

If a child is showing an interest in money or as Kristan Leatherman coauthor of Millionaire Babies or Bankrupt Brats? puts it,

“The best time is when your child begins to understand that money can buy him things he wants.”

Don’t forget, kids also need to be able to do some basic math.  Kimberly Palmer, the author of Smart Mom, Rich Mom believes you should start

“as soon as they grasp the concept [of money].”

The goal is to keep their interest and to hone their skills.  If the interest is there, but not the ability, keep them engaged by including them in financial discussions until they are ready to do the math required.

If they are not ready at age five, do not force the issue, wait until they can do the math required to handle money on their own. Keep in mind that dealing with coins involves an understanding of fractions.  But even without a full grasp of fractions, you can start the practice.  Usually, around seven years – Grade one, they have acquired the necessary arithmetic skills they will need.

If your 4-year-old is showing an interest in money and they can distinguish between the different dollar and coin dominations, then, by all means, start giving your little one an allowance.

Lastly, if you are reading this and you have a preteen or teenager, and you haven’t started an allowance, it is not too late!  Remember, an allowance is a safe place to practice money.  Getting some practice will always be preferred to no practice at all. 


How Much Should Kids Get for Their Allowance?

You will have to determine what works best for your family.  

How much you give depends a lot on your financial situation, how many kids you have etc.  So only use the following as guidelines.

 Don’t let the following suggestions discourage you from an allowance and don’t stress over how much. 

Remember, the intent is to give your child practice using money. 

To find where you can find money to support your child’s allowance read the “What Should Allowances Be Used For” section below.

How Much Should Kids Get for Their Allowance?

Weekly Allowance Amounts

Most parents give either 50 cents or one dollar for every year of age weekly.

So, a 7-year-old child could receive a weekly amount of $3.5 or $7, respectively.

The going rate for kids’ allowance

Moneyroster.com 2019 survey shows the average allowances from ages 4 – 14.  As you can see, the amount is in line with the 50 cents – $1 amounts noted above. 

 In our family, we have gone with the $0.50 approach but rounded up.  So, my 7-year-old is receiving $4 per week.  We wanted to start low so that we had wiggle room to increase the amount as my child grows, and his wants and needs also grow.

 A few other things you should consider when determining how much to give:

  • Will the allowance be used to cover necessities such as lunches, clothing gifts for friends? (See guidelines below for more details)
  • Can the amount be easily divided into savings/giving/spending “accounts”?
  • What will your child be buying? Will they be able to save up for their significant wants with the allowance they receive without getting discouraged? (Don’t forget to factor in any additional money they may receive from working or birthday gifts when doing this calculation)


Allowance Use By Age

This is where a lot of parents get tripped up when giving an allowance.  Allowances are not “extra money.”  

Allowances should replace one or more of your current budget lines. In other words, rather than you buying stuff for your child, you should provide them with money to buy for themselves.

For example, carve out some money from your grocery budget, and have your child manage their lunch budget.  Your child should be using their allowance to buy what you would have been buying for them.

What is the Appropriate Age to Start an Allowance?

Toys, lunches, clothing, personal hygiene are all items they could be purchasing for themselves.  While they do, they will be learning how to budget, and stretch a dollar.  Let them keep what they don’t spend so that they can reallocate money to their priorities.  So, if they want designer jeans and are willing to eat a month’s worth of peanut butter and jelly to sandwiches to buy them, let them. 

The key is that you cannot bail them out with extra money or by buying for them.  If you want your child to learn money managing skills, you need let them figure it out.  You will find your children are much more economical when they have to spend their money on themselves.  The beauty of this is that you do not need to find “extra money” to support the allowance; it is money you were going to spend on them anyways. 

As your child becomes more comfortable with money, they should be able to take on a more significant share of the purchases for themselves. By the time your child is in their late teens, they should be managing most of their purchases. That, of course, will not be where you start with your 5 and 7-year-old, but this is where you need to end up.  Let’s take a look at the differences in allowances by age.

Allowance for Ages 5 to 9-Years-Old

When you are first starting your allowance practice, especially if you start with children younger than 10, you will find the focus will be on toys and maybe treats. 

Remember you are giving your child this money in part to empower them; to allow them to make choices.  You can and should put some boundaries around their choices, but not so much that they do not feel like they can buy what they want. 

One tool that can ensure some boundaries is a “Do not buy list.”  Do not make this list overly long or complicated, and you can always add more to it later.  For example, our list only includes two things: treats (gum, candy, chocolate, etc.) and toy weapons (guns, knives, etc.).  But as my kids get older, it may include inappropriate clothing or violent video games. 

Allowance for Ages 10 to 14-Years-Old

By this stage, if you have started early, you can start to transition that discretionary toy budget into something more tangible.  Maybe a lunch budget that your child needs to manage.  Around nine years old is the prime age to begin increasing purchasing responsibilities. 

Make sure you are increasing their allowance as they age.  Also, make sure that you continue to focus not just on spending but setting and hitting savings targets.  Saving is a critical part of managing money, and your child will need your support to master that skill.

Allowance for Ages 15 to 17-Years-Old

By this age, I would no longer consider this an allowance per se.  If you started early and your child has mastered many of the allowance skills by this age, they should be receiving a monthly budget.  It may be a good time to switch the weekly pay to a bi-weekly payment to help them get used to standard pay periods.

While you will still likely be providing them with breakfast and dinners, they should be managing their lunch, clothing and hygiene budget and any discretionary spending.

If they find that the amount they are getting from you is no longer sufficient, encourage them to get their first jobs.  First jobs are opportunities to develop the work ethic that we hope they carry into their careers.



About More Than Spending

Don’t forget that an allowance should not just be about what your children can buy for themselves.  A portion of allowance money should be set aside for donating. 

Why donate? Giving is essential in both developing financial skills and contributing to well-being.  Paradoxically giving makes you feel wealthy and happy.  Additionally, if your child focuses only on spending money, they may become shallow and self-centered.


Giving provides an opportunity to think about the privileges we have while also contributing to solving big problems.  Just as you help your child set savings targets, help your children find and donate to a charity that resonates with them.


Guidelines in Less Than 12 Steps

Here are 11 steps to follow to start your allowance practice.

 1. Define your frequency and be consistent. Start with weekly and move to bi-weekly when your child is in their teens. That consistency will give your child a chance to start budgeting and saving regularly.

2. Define the amount. Try to make it enough to start making small purchases, but not so much that they don’t have to save for the big stuff.

Allowance Guidelines in Less Than 12 Steps
  1. Have a place for them to keep their money. Forget about the piggy bank and use clear jars so your little one can see their riches grow. Label the jars spend, save, and give. The three jars method is an easy way to start teaching the concept of accounts and budgeting
  2. Explain to your child why they are getting an allowance: to practice using money. A skill they will need for the rest of their lives.
  3. Have your child agree to your Do Not Buy list.
  4. Let your child know that they will not be getting more money outside of the allowance. If the allowance is for lunch or clothes, they need to make it last.
  5. You can lend your child money to get them into the habit of paying bills, but as a rule, try not to lend them more than one week’s allowance. Make sure they pay it back.
  6. Help your child define savings goals. Remember to reset savings goals once they meet the target.
  7. Help your child find ways to donate a portion of their allowance.
  8. Let your child know what, if any, behaviour will cause the allowance to stop.
  9. Use the allowance (the giving, the buying, the saving and everything in between) as teachable moments. The allowance alone is not sufficient to learn the skills required to manage money.


Cash Before Credit

While the world may have gone digital, allowances should start with cash.  

There are countless apps and ways to make giving allowances convenient for parents.  But your convenience is not the purpose of the allowance. 

Why Cash? It is tangible. A child can see how much money they have, and interact with it.  

If their money jars are empty or overflowing with cash, they will have a better understanding of what they have than digits on a screen.

While the world may have gone digital, allowances should start with cash.  There are countless apps and ways to make giving allowances convenient for parents.  But your convenience is not the purpose of the allowance. 

Why Cash? It is tangible. A child can see how much money they have, and interact with it.  If their money jars are empty or overflowing with cash, they will have a better understanding of what they have than digits on a screen.

The other advantage of cash is the cognitive connection made when a child exchanges physical money for a good or service.  Making that mental connect and experience the feeling associated with that transaction is a necessary part of understanding personal finance.  Transacting in cash makes that connection happen quicker.

There is no end to the great apps and cards out there designed to help you manage allowances.  RosterMoney and the Greenlight cards have been receiving some excellent reviews.  But do not go digital too early, have your child master cash, before cards or apps.


Final Take-Aways

Once you have started giving an allowance, stay consistent.  

Stay positive and give your little one the freedom they need to experience all the highs and lows of buying, saving and giving. 

Do not be overly regimented. Don’t forget the purpose of the allowance is to let them take the lead.

Allow your children to make mistakes.  We can learn more from our mistakes than our successes.  


Final Take-Aways

Losing money, buying something cheap rather than delaying gratification for the well-made version, or losing a toy that was not adequately secured, are all aspects of having and using money.  So, don’t deprive your children of these moments.  Their small losses now will protect them from more significant losses later.

Once you have started giving an allowance, stay consistent, stay positive and give your little one the freedom they need to experience all the highs and lows of buying, saving and giving. Do not be overly regimented. Don’t forget the purpose of the allowance is to let them take the lead.

Don’t let the learning stop after your initial conversation.  For allowances to be beneficial, it requires both the exchange of money but also the exchange of knowledge, therefore remain an active participant in the allowance process. Help them set savings goals and find worthy causes to donate to.  Use all aspects of the allowance as teachable moments to keep the conversation about money going.

Last take away.  Giving an allowance is a fantastic gift, but it also requires that you give up a lot of control.  Up until this point, most parents would have had all of the buying power.  The allowance equalizes this power disparity a great deal.  Don’t let that dissuade you.  Remember, we are raising adults.  The goal is to get them to be self-sufficient members of society.  We need to empower our children, and this is an excellent method to do so.

Need more tips for talking to your kids about financial literacy, go to CliftonCorbin.com or subscribe to my newsletter. 

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If I’m not financially literate – How Can I Teach It?

Let me address the elephant in the room. I advocate teaching our kids about money, but it is based on a few key assumptions. The first is that we are financially literate ourselves.

I’m Not Financially Literate

With regards to our financial literacy, we can always learn more without a doubt. Investing, debt management strategies, retirement planning, and the list goes on. There are endless methods and tactics for how we should be dealing with money as adults. You have probably heard some of them:

The list is endless. I’ve read something recently that says, “We can not give what we do not possess.”

So how, then, can we be expected to teach what we do not feel we know?

Yes, You Are Financially Literate!

To that, I say, don’t sell yourself short. We all have had experience with money. Our journeys are all different, and our level of knowledge varies vastly.  However, when you compare that to your child’s knowledge base in this realm, you are a wise financial sage. The important takeaway is that if we are not talking about money with our kids, they will be forced to interpret what they can from the media and other social influences in their lives. Therefore, it is best to provide a basic shared foundation of finance to help our kids start their relationship with money in a positive way.

Simply earning an income, paying bills,  and spending your money have given you a solid grasp of the basics. You likely know how to prioritize your spending to cover your needs, and you understand the difference between a need and a want.  You have learned the ramifications of spending more on wants versus needs one way or another. From the outset, your child does not know these things. Here is where you start.  Teach your child that money is a limited resource, and our wants are unlimited.  Discuss the need to decide how these limited resources will be used. Talk through how you make your decisions and what you value.  The more complicated money management strategies can come later.  

Rather than saying I’m not financially literate, if you want, you can learn those strategies with your child when the time is right, but don’t let a lack of complete knowledge of the subject stop you from covering the basics. We owe this to our children.


What is money?

Have you ever tried to explain the concept of money to a child? Possibly along the surface,  most children have some sense of what it is at an early age. Try this with your little one. Ask them what money is?

My guess is that your child would respond with something along the lines of “Money is something that I/we use to buy things that I/we want.”

While that definition is a sufficient starting place, it is certainly limiting if you want your child to have a firm handle on personal finance. When we look closely at that definition, it only talks about spending. Additionally, it only just touches on why we need money, but it leaves me wanting more.

A New Definition

Here is my definition of money, and I would suggest you use it with your child too.

“Money is something that we trade for things of value.”

This definition is general enough that it captures new digital currencies, as well as, the well-established notes and coins that we are all so accustomed to using. I also like it because it uses the word “trade” rather than “buy” or “sell.”

Trade Vs “Buy and Sell”

When you buy or sell something, you are essentially making a trade. We must trade something to acquire money. We could sell something for money. But if you are like the vast majority of people, you likely make a living by working, not by selling something. When you go to work, you could say that your employer buys your time and your skills, or you could say you sell them your time and skills. Both of those statements are factually true. But I think it is more apt to say you trade your skills and time to your employer for money. The use of the word trade captures both parties’ motivations. You want the money, and they want the time and skills. You both come out getting what you want.

Similarly, when you go to the store, you trade the money you acquired to buy the food, and clothes your children eat and wear. No matter what side of the trade you are on if you are buying or selling, it is always a trade. I feel like trading is a concept and term that children can relate to intuitively. From a young age, children start the practice of trading. They trade snacks, cards, toys, books; you name it, they trade it.

Needs vs Wants

The other reason I prefer this definition is that it better addresses what we trade for money. We need our children to be able to discern the differences between needs and wants. To do that, we need to broaden what they think we use money for. If they think it is only used to acquire what we want, it will be harder to cement in the differences between wants and needs. That is why I prefer speaking about money as a means of acquiring things that we value. Those things can be the things we want, but it can also be the things that we need, such as food or clothing. By speaking about what we value, we can more easily talk about what we prioritize.

How do you feel about my definition of money? Do you have a better description? Did your kids throw you for a loop when you asked them what money is? Let me know in the comments.

Why You Need To Practice Gratitude

I want double down on a  topic that has come up a lot — the practice of gratitude. I recently wrote about what to do if your kids ask you “Are We Rich?“.   I want to dive deeper into the part of that post that talk about giving. I genuinely believe that giving helps you feel more wealthy, and there is data to back this claim.

As mentioned in, feeling rich or poor has a lot to do with comparing ourselves to others. That feeling is also tied into how we categorize our needs vs our wants. For example, if we feel like we need more stuff, we will often feel poorer.  It is especially challenging for our children who are exposed to so much marketing.  Being surrounded by friends who have the latest games, name brand clothes, or the newest wearable tech only compounds these feelings of lack.

How do we combat that feeling of need?   Gratitude.  There is a growing body of data that shows that gratitude changes the mind and body in positive ways.

Enter the Practice of Gratitude

To combat that feeling of “I need more,” it is helpful to reflect upon how fortunate we are.    I don’t journal often, but when I do, I start by writing about what I appreciate.  It unusually revolves around family and friends, but not always.  I will write about how I’m grateful for my home, our vacations, and the good fortune I have had that day or week.

You may have taken the time to think about where you want to be ten years from now. But how often have you thought about where you had hoped to be ten years ago?  When you reflect, you may find that you have a lot to be grateful for today.  It is through this practice of reflecting on our good fortune, that hopefully, we can remember how much.  In time, this habit replaces the constant thinking about how much we want or do not have.

Have your Kids Practice

For my kids, we do this at bedtime.  As we are talking about our day, one of the questions I ask is, “what are you grateful for?” What I enjoy about this moment is that we get to hear what our kids are thinking. We listen to what they appreciate about our actions towards them. “I appreciated that you played x with me” is always a heartwarming one. We also get to use this moment to tell our kids the things that they do that we appreciate — the things we may have overlooked in the moment. “I appreciate that you cleaned up after breakfast without me having to ask “, for example. We also get to show them that we’re grateful for our connections to our friends and family and the material things that we have in our lives.

I can’t say that so far I have noticed any change in their level of desire for material things, but I’m hoping with time it may.  The hope is that I can point back to some of the things that they mentioned in their nighttime reflections when they start talking about how much they want/need something new.   Good luck convincing me you are in desperate need of something if just we talked about all the things that you have in your life for which you are grateful.

Do you practice gratitude journaling gratitude reflections with your kids? If you do, have you noticed any difference in their level of desire before and after you started? Have you noticed a difference in yourself? Let me know?

Are you Wealthy? [2022 Update]

What does it mean to be wealthy? Easy right? Being wealthy means you are rich, you have lots of cash, you go on vacations, and you can buy what you want when you want. Or is it?

I had a fascinating conversation with Felicia Robinson Joly. She is the co-author of The ABCs of Wealth: Big Ideas for Little Children. A book I mentioned in a previous post on when is the right time to start talking about money with kids. Her book takes a different approach to start the conversation about financial literacy by discussing financial literacy vocabulary.

The book

I’ll admit when I read “The ABC’s of Wealth.” I thought it was a bit simple. Felicia, to my surprise, echoed that observation and then doubled down on it. She told me it is simple by design. We both agree that far too little time ABC's of Wealth Coverhas been spent teaching financial literacy in the past. Still, we also acknowledge that becoming financially literate can be a daunting task. She consciously created her book to be approachable so that there would be “no excuses” to avoid the conversations. The easy-to-read verses get stuck in your head like a pop song. She hopes that you and your child will easily absorb financial literacy vocabulary by creating rhymes and memorable text.

The Mission

But back to wealth. During our conversation, Felicia brought up the question, “What is wealth?” repeatedly, and for a good reason. Felicia’s objective with the book is to get people financially literate, but more importantly, her mission is to have people define what wealth means to them.

“Over the last 200 years, we have lost focus on what our intrinsic value is”. “Money has become the master,” and “we’ve devalued ourselves,” Felicia explains.  She went on to say that she wants to shift the “underlying mindset” with our relationship to money to be “based on our own definition of what wealth and value is.” Right now, she believes those definitions “are being shaped by external ideas.”

Put another way, Felicia says she wants people to “define wealth within” and to “look at yourself as your ultimate asset…your mind, abilities and craft”. So rather than seeing a doctor, a lawyer, or a ‘YouTube star’ and thinking that is what wealth is, I will get that.


The idea that we have devalued ourselves reminded me of The Icarus Deception by Seth Godin. The industrialized economy of the past forced us to be a part of a larger system. We only had value as a cog in the larger system in that system. In our new economy, we need to remember that we all have an individual values that we need to offer the world. It is only through creating our ‘art’ that we can then engage in the exchange of value—my ideas, my art, for your connection, attention, and money.

Felicia notes that this is what the billionaires have done. She referenced the billionaires who started with the questions of how I will create value and what idea I have that I can then share with the world. What connections can I make to exchange value? She noted how Oprah created value with the exchange of ideas, Richard Branson with the exchange of music, and Bill Gates with the idea that there could be a better way to interact with hardware. They created value by first having ideas to share.

People have it upside down; they think, ‘let me get the money and then I’ll be important or, ‘I want to be wealthy, so I will work for that wealthy person,’ instead of creating their own idea and exchanging it with the world.

Shifting Mindset

That shift in mindset made me think of those people in our lives who do a 180 in their careers. They put the brakes on hard after spending years climbing the ladder, only to realize years in that they don’t want to be doing what they are doing. Or worse, they came to that realization but kept going even though work brought them no joy, only income. It happens. We get on a path and follow it,  never asking if this is the right path for me? This happens when we do not define what wealth is for us. When we assume that wealth is solely the collection of money, and then we go down the path, we define that will allow us to accumulate the most money we can.

Felicia hopes to make that shift more conscious, not a result of burnout or happenstance, but a conscious decision to say this is what wealth means to me. Time to be with my family, or time to see the world, or just time to sit peacefully with me. And once you define wealth, you use your abilities to create value to reach that goal.

I’ve written about target setting for savings, but this is target setting for living. Defining what success is and what wealth should be done before your career. Then, you can adjust and iterate if needed. And they should be based on your objectives and goals, not on what we see on Instagram, Facebook or YouTube.

How do you define wealth and success?  Have you conveyed your thoughts on wealth to your children?   Who is helping them to define their wealth?  If it’s not you, then who, DJ Kalid, Labron, the Kardashians?

I commend Felicia on her mission to shift mindsets because I agree that wealth should be defined.  You can find Felicia and her financial literacy program at  Power@Play, and you can find the ABCs of Wealth here.

If you are looking for financial literacy resources for children of all ages, please check our my resources page.

Book Review – Grit

What was the last thing you or your kids quit? Cooking lessons, dance classes, soccer, or piano. How many times have you heard “I don’t want to ____”. Fill in the blank… practice, do my homework or anything that requires a little fortitude…

It happens to me all the time. My kids have the worst attitude when it comes to doing something hard. “I can’t do it” “It’s too hard” or the dreaded “I’ll never be able to get it”. Now, granted my kids are young and many of the things they do are new and are hard. But I still hate that attitude.

I’m not always the hardest working person, but I have always had the attitude that I don’t quit. I will have to pull a hamstring before I stop running a race. In fact, many years ago, I was dreadfully out of shape, and my then girlfriend convinced me to complete a 5k run with her. I’ve always hated running, and at the time, the idea of running 5k was the equivalent of asking me to run a marathon naked. But she persisted, and I relented.

I still remember the look on her face as I approached the ‘finish line’. She was terrified. Why? Because there was no longer a finish line. The race had finished so long ago that all the race signs had been packed away. She was sure something must have happened to me because she couldn’t find me. But I was still chugging along, living up to my high-school basketball nickname ‘Grimace’.

I’ve since become a decent runner, but my point is that I would rather finish way past dead last, then give up. And that has always been my attitude about hard things. My challenge has been moderately hard things. The things I know I can do, but I also know would require a sustained effort over months or years. That is when I throw in the towel. All of this is to say Grit is something that has been on my mind for some time.

If Yoda were to write a book, this would be it.

Why can I put in the effort today, but find it difficult to sustain that effort over a month, or a few years? How do I get my kids to be and stay ‘Gritty’? Luckily for me, I now have some strategies to try, thanks to Angela Duckworth and her book Grit.

I received a copy of this book a few years ago after attending a lecture she gave at UofT. She has been a reoccurring guest on the Freakonomics podcast and is a thought a leader in Behavioral Economics, a branch of Economics that I’ve been fascinated with for some time. Since I’ve heard her speak, I was in no rush to read her book. I’m thankful that I finally sat down to read it because it provided a lot of insights on the topic of being gritty.

Talent vs Effort

I’ve read in several places that it is better to encourage and praise our children’s efforts and not their talent; and Grit reinforced this point. It went into great depth about how many people say they believe effort trumps talent but unconsciously think the reverse. Duckworth’s section on mindset reinforces the need to focus on effort vs talent. She demonstrates that with a growth mindset, we are more able to accept that with effort, you can gain skills, and achieve more. I’ve been lucky to have always had a growth mindset, but it is informative to realize that there are some out there who do not, and how that can affect not just their ability to learn, but their willingness to do so as well.


You may have heard of the 10,000-hour rule from Gladwell or others. The rule states that if you practice for 10,000 hours or more, you will be successful. I’ve known for some time that this ‘rule’ is more of a guidepost. However, if you consider how much effort is required for success and you start to dig deeper into what type of effort is necessary to achieve it, then that rule makes a bit more sense.  Duckworth makes a case for effort throughout her book and goes further to explain what kind of effort is needed.

If you consider ‘effort’ to be practice, then effort alone is not sufficient for success. Duckworth defined the type of practice that is necessary as deliberate practice. She describes ‘deliberate practice’ as

  1. A stretch goal
  2. Concentrated effort
  3. Immediate and informative feedback
  4. Repeat with refinement

Take my running, for example. It was only because I continued to run after that first 5k with the deliberate goal of increasing my speed, that I was able to get down to a more respectable time. But if I were to have had a coach to provide feedback, and continued to dedicate time to the sport, my speed would have doubtlessly increased in orders of magnitude more than it did.


Duckworth is clear to say that a lot of the research on grittiness in children and parenting styles is still not conclusive, but given her work, to date, she does make a lot of recommendations based on what has been observed. If you have read a parenting book in the last few years, you would have likely also landed on ‘authoritative parenting’. This is what she calls wise parenting, not to be confused with ‘authoritarian’. Wise parenting is both supportive and demanding. That is, they give their children the emotional and physical support that they need, but also require their children to finish their homework, participate in the recital even though it is scary, or complete the soccer season even though they may not be that good at the sport. It is an effort to get the child to do “hard things” without quitting.

She also strongly recommends extracurricular as a path to build grit since it does give children a chance to practice hard things that can offer both challenge and fun, which few other opportunities do.

There are so many tips in this book that I want to tell you about. Duckworth’s family challenge to do one ‘hard thing’, her research on how children who participate and stick to their extracurricular in high school have higher levels of success after school.

It was an easy read, and I thought it was packed full of useful information. I know I will be applying a lot of the advice provided to help mould my kids, but even more immediately to help me continue to grow and be more gritty.  If you want a preview of Duckworth, check out her TED talk.  Oh and my 5k is down to a respectable 30 minutes or less now.

Do You Let Your Kid Gamble? I Do

Would you let your kids gamble? How about buying lottery tickets? How about playing the slots at a casino? Right now, you are thinking, this guy is crazy. Who would introduce gambling to their kids? I thought the same thing until I realized that I have not only condoned gambling but have helped to facilitate it.

Pokemon Popularity

Pokemon is big in our house right now. I have to hand it to the creators of that game. They have been able to not just keep that franchise going for 20+ years, but they have been able to capture a new generation of loyal fans and buyers year after year. Think back to when you were kids, while sports cards, pogs and garbage pail kids are technically still around they are nowhere near as popular or successful in terms of revenue as Pokemon.Pokeball

Somehow my son curated a collection of 50+ cards without ever buying a single card. He got a few for Halloween, and friends who had doubles have given him some. But this weekend he went out to buy his very first pack.

The Value Of A Card

My son has been trying to school me on the various values of the cards. The higher “attack value”, the more valuable the card is for him. Simple enough. So when he bought his first package of cards, low and behold he received mostly low attack value cards. I’m not going to lie, I was really excited about that. No, I’m not just a big meanie. I was excited because it gave me a chance to talk to my son about gambling and the lottery. Yes, I’m a super geek, and yes, when my child bought Pokemon cards, I let my kids gamble.

Here is a bit of the exchange we had after he bought his cards:

Me: Did you get any valuable cards?
Him: Not really, not that valuable.

Me: How did you feel before you opened the pack?
Him: I was excited

Me: Why do you think you were excited?
Him: I was hoping I would get an EX (High attack value card)

Me: Why don’t they put lots of EX’s in the pack?
Him: I think they do it so that you have to buy more packs.

And this my friends, is why Pokemon is a lottery. Lots of little wins to keep you coming back for more, and few big paydays. If your friends have valuable cards, you know it is only a matter of time before you hit it big too. Just like those ‘just image commercials’ you see that show you people just like you can win the big one.

Value and Scarcity

That is why Pokemon has been so successful. They have been able to create value and scarcity with their cards. They have also been able to create that excited high we get when we gamble or play the lottery. Yup, I just let my 7-year-old kid gamble on Pokemon. They have also created a card game that people love to play, and included the communal aspect of trading cards that has been popular for years. But I’m just focusing on the gambling here.

I’m not big on gambling, I know the odds, so I don’t play the lottery or go to casinos. I’m not passing judgment on how anyone else chooses to spend their money, but I am trying to educate my kids. And letting them know how lotteries work is part of that.

Other Games of Chance

The funny thing is, Pokemon cards aren’t the only form of gambling that I have introduced my kids to. At our kids school fun fair, they had a few games of chance. And it was my wife that pointed out that the money that was spent to play the games could have easily bought 2-3x the number of prizes that were won.

She was also wise to point out that he was not paying for the prize he was paying for the experience, which is like some people who gamble. But like all other things regarding money, and especially gambling, it is important that we are aware of what we are doing.

My son now understands that if he buys a pack of Pokemon, most cards will not be valuable, but every now and then, one might be. He knows that they do this on purpose to encourage him to buy more cards. And now, if he chooses to buy more cards, at least he is doing it consciously. So yes, I let my kids gamble, but they are informed because we talked about it. And that is all I can ask for.

Why You Need A Savings Target

Do you have a  savings target? Is it easy for you to keep your savings? Here is why you may want to talk about savings targets with your kids and how it may help you as they develop the saving habit.

I had an interesting conversation with my son the other day. I was under the impression that saving was not a big deal for him. When we started his allowance a few months back, he was saving for a big-ticket item, and he had no problem doing so. He would diligently put money into his savings jar weekly. He also put all the money he got from his birthday and other sources into his savings as well. Seeing how keen he was to delay spending to reach his savings goal, I felt like he had the concept of saving in the bag. On my list of personal finance lessons, I was ready to put a big checkmark next to savings and move on to the other stuff.

Pilfered Savings

Then my son threw me a curveball. Our neighbourhood holds an annual yard sale, were multiple streets will coordinate to put out their wares on the same day. It is a great time to find some bargains, and my son knows it. He brought his cash with him, and I thought nothing of it. It was only after the yard sale that I realized he had pilfered his savings jar to go treasure hunting in our neighbours’ stuff and had spent both his ‘spend’ and his ‘savings’ that day. I was a little surprised that he would dip into his savings, considering how steadfast he had been in saving in the past. When I questioned him, he made it clear that he didn’t want to miss out. He wanted to make sure he had all his money with him. That is some solid logic that I couldn’t argue.

When I asked him about depleting his savings, he seemed nonplussed. And that is when I realized my error. When we started the allowance, I asked him what he was going to save for. He created a savings target, a goal. When he reached that goal, the savings jar became a defacto spend jar. With no goal, there was no reason not to dip into his savings. The saving habit was natural for him when h goal was in sight, but once reached, it no longer had a purpose. Why not spend what is in your savings if you are not saving for anything?

Set a New Target

Luckily for us, there is no end of items that my son wants. We came up with a new savings goal. And he is back to his old habits of keeping his save and his spend separated.

Spending savings is not money management, but it is an easy habit to get into. And I feel like goal setting is a great way to keep the two buckets separate. Getting into the habit of setting a target to save will hopefully translate one day to getting him into the habit of having an emergency fund, a retirement fund, and all other savings goals that go along with adulthood.

Wash and Repeat

It was an excellent reminder to me of why I am doing what I’m doing. These lessons that I’m writing about, and trying to pass on to my kids, don’t come quickly, they require re-enforcement. So, while in my head, my son had grasped the concept, learning these concepts and forming the right habits take time, and repeated effort. Luckily we are working on it. And I know he will get it.

If you have a child who needs an extra incentive, take a picture of your child’s savings goal and tape it to their save jar.  Now they will have a visual reminder of what they are saving for.  This will help them keep their target in mind.

Delayed Gratification and other financial lessons

Delayed gratification, quality over quantity and other financial lessons my son has learned from being able to manage his own money.
Quality-Cost Connection

When my son first started to have his own money, he was eager to make trips to the dollar store. He would spend whatever little bit of money he had and feel very little remorse when his new toys had a five-minute life span. Now that he has his own money, that has changed.

When he asked to buy toys with his birthday money, he was unequivocal; it had to be Toy’s R Us. When I asked why he told me that he hates the dollar store. “Their stuff doesn’t last.” I’m happy that he has made this early connection. ‘You pay for what you get’ is a valuable lesson that I’m so glad he has learned early.

Now I don’t want him to miss out on the need to be frugal. I plan to show him that there are some items where the dollar store is a fine place to shop, but for the intricate toys that he likes, the dollar store is not the best.

Delayed gratification

“I use to go the store with my money and if I didn’t find something I wanted I had to buy something right away.” – my son

Saving is hard. It is hard to put off getting something today in hopes of getting something better tomorrow. And before my son received an allowance, I think it was even harder. When you are uncertain when you are getting money again, it is hard to come up with a plan to save and stick to it.

I’ve been lucky to always work in jobs that pay me regularly. I have a special appreciation for the contractors and freelancers out there who budget with irregular paydays.

The lesson that you need to save for the things you want is so powerful. My son would often go into a store with his money, look around for what he could afford and maximize his returns. While that is not a bad strategy, it often left him disappointed. There was always that one thing, just out of his price range that he was not willing to save for. Now with a steady income, he is more willing to put off that purchase and wait. And he is much more satisfied with the things he purchases.

Making a Difference

I wrote about the charitable work my son has done over the past year. His charitable efforts have let him know that while there are significant problems in the world, he can do something to help solve them. I have also seen the pride he has in himself for making a difference. How can you not feel good helping people?

We’ve enjoyed the conversations we’ve had around the ways he can help people less fortunate, such as giving away his toys and books that he no longer wants, or giving more money to people or charities that he feels will make the most impact.

He has also made the connection that giving can feel good. I was surprised when my son used some of his birthday money to buy his sister a small gift..just because.

How has your journey been going? Let me know how the conversation has been going. What have their takeaways been? Are they making the connections you had hoped? Any unexpected realization? Let me know in the comments.