Does Money Teach Kids the Wrong Things? (A letter to The Wall Street Journal)

The following was sent to the author in response to a "Love & Money" column in the Wall Street Journal. In this article,"Money Can Sometimes Teach the Wrong Lessons to Kids," Jeff D. Opdyke recalls how withholding his children's allowance for "bad behavior" led the kid to grow avaricious, and even deceptive: when he came home from school one day, he was caught throwing away a note from his teacher. When asked why, his child said he was afraid of losing his allowance. Thus, Jeff D. Opdyke concludes that perhaps he has been giving his children the wrong advice. I write because I feel that he is putting attention on how we reward children, when it may be better, in cases like these, to focus on what we reward them for doing.  (Note: This letter was mentioned in The Wall Street Journal, on June 1, 2003.)


I was very interested in reading your column about "Money Can Sometimes Teach the Wrong Lessons to Kids":
    I'm a 21-year-old recent college grad, and I feel that "dollar incentives" taught me the right things. I would like you to hear my story.
When my mom had the decision about sending me to college, she gave me a fixed dollar amount she was willing to put out: "You can have a fixed amount to pay for tuition and college fees. If your school costs more than that, you owe me money. If it costs less, then I will put the remaining portion into your first house payments." It certainly made me feel much more economically responsible for my own fate, but more importantly, I learned (1) some things that don't seem to be worth money, but are, and (2) some things that were not worth money to me.
    For instance, out of high school, my mom told me that when I go to college, I need to work at least 15 hours a week. I bartered an arrangement, though: "Suppose I graduate in half the time and save you tuition. Can I do that instead of working, if I am not thrilled with the jobs available to me on-campus?" She let me do it.

    I graduated Purdue in two years, making very efficient use of my study time. In the first of the years I've saved, I've actually worked as a Differential Equations lab instructor, a position that might not have been available had I taken the conventional route. In addition my work help me show some of my friends what was possible academically with persistence. Friends who'd lost a year in the wrong job began to recognize just how much opportunity cost they'd taken for the wrong moves.
I took the summer after my graduation off, before going back to my Math instructor work. My mom ultimately grumbled about my "lazy" activity, and took $2,000 out of my home-building account. I was, at first, miffed that she did this, and asked her why, thinking she was unreasonable. "You were supposed to work last summer," she retorted. Then, it all seemed okay: "Fair deal. Taking that summer off was worth $2,000 to me."
In short, I learned early on that some things, such as time spent with friends, are not worth giving up for small change. 

    As for your kids developing the "wrong kind of love of money," ... The problem is with what is rewarded, not how it is rewarded. If you reward the wrong things with "social" and "non-monetary" activities, the child will just learn how to be deceptive for social advantage instead, just not for economic advantage.