Who hasn’t tried to keep up with the Joneses at least once or twice? (Guilty, as charged.) Adults often fall into the jealousy trap when it comes to comparing what we have and what we make with what our peers acquire and earn, and kids aren’t impervious to doing the same with their pals. So, we asked Solomon Amos, founder of Advisorsavvy, a company that helps Canadians connect with trusted financial advisors, how to handle kids who feel jealous of wealthy friends.
ParentsCanada: Jealousy is a hard thing to explain, especially when it relates to finances. What is the best way to explain your family’s financial situation to a school-aged child, and how do you make it clear you’re not in a position to maintain the same lifestyle as their well-to-do friends?
Solomon Amos: A good starting point for all kids is explaining the concept of existing money and earning money. Some families already have a lot of wealth, and those children are born into that. But other families may not have baseline wealth and must work harder for the same things. Ultimately, there are a lot of inequalities in the world and money is often one of them.
With that, it’s good to mention the concept of working for money. Most children understand their parents go to work to generate income. However, they may not understand that each job has different compensation. By explaining this to your kids, you can communicate that some families earn more money simply because of the type of work they do. If your children are confused about why you choose to work a certain job for lower pay, that’s an excellent time to explain contentment. You might say you chose a certain profession out of passion and interest, not money, and that’s a perfectly fine thing to do. Finally, the element of choice is important to discuss. Two families that earn the same household income could have drastically different lifestyles, which boils down to spending choices. If your children have an allowance, you can demonstrate by explaining how one sibling likes to spend their allowance on movies and the other prefers to buy clothes.
PC: How can parents kids who feel jealous of wealthy friends, or even inadequate and anxious?
SA: It’s okay to let your kids go through these negative emotions, and to explain that having money doesn’t guarantee happiness. Let them feel the way they do and guide them toward a more positive outlook about money. Remind them of your values, such as being happy with what you have, and that money doesn’t equate to happiness. Every child will experience negative emotions at some point, but you can support them through it with your values and ideologies. Trust that they’ll come around.
PC: Is there a time when it would make sense to forget about the family budget and buy kids, say, the cooler labels in clothes and accessories, or the latest smartphone, so they’re not the only one in their friend group who doesn’t have these things?
SA: Children can be more susceptible to wanting the latest, coolest thing due to their surroundings and lack of greater life experience. Let’s face it, schools come with social pressures, and to them, their social circles are very important. Here are some things you can do to navigate these requests:
- Provide your child with an allowance (ideally in exchange for chores or other contributions) and help them plan for the purchase of a certain item. This way, your child can understand that money doesn’t grow on trees and there is effort that goes into purchases.
- Buy an item for a birthday, graduation or holiday. This way, it is perceived as a treat or reward, not a random gift. The idea is to teach your children that it’s okay to buy something nice every now and then, but it shouldn’t be an everyday practice.
- Explain to your child that if they want a certain purchase, they need to forgo something in the family budget. Perhaps you pay for dance classes for your child. Instead of dance class, they can have a new tablet. If that’s what they want, let them decide and understand the impact of such financial decisions.
PC: What kinds of financial lessons should parents bring up while talking about this? Is this a good time to open a bank account for your child, if this hasn’t already been done?
SA: No one is born with the ability to understand the nuances of money — this is something that’s learned through life experience. Now that they’re asking, it is the perfect opportunity to teach them something further about finances.
- Provide a weekly or monthly allowance and let kids manage their money. It’s best if you can give an allowance in exchange for a service, perhaps for chores around the house. They will eventually understand the reality of how much things cost in respect to their earnings.
- Show your children the opportunity cost of one thing over another. Explain that if you buy them a video game now, you can’t buy those popular shoes later. Money isn’t infinite. If it’s spent on one thing, it can’t be spent on another.
- Take the time to explain contentment. Children can mistake a certain thing or amount of money for happiness due to innocent correlation. As adults, we know this isn’t how life works, but your child might need some extra justification.
- Help your child find their first job. For younger children, this may be something super local, like mowing your neighbour’s lawn or helping Grandma with grocery shopping. Teaching kids about working for money is always important.
PC: What are some of the best ways to make sure our kids know why it’s unnecessary to keep up with the Joneses?
SA: Try to put it into the context of their world. Maybe if there are popularity contests at your kid’s school, you can explain how that’s like keeping up with the Joneses. Is it more important to be accepted by the popular kids, or is it better to be happy with who you are and what you have? The answer is certainly the latter.
Some kids learn through doing. If your children have an allowance, let them try to keep up with the Joneses. In the end, they will most likely come to the same conclusion as you — it’s not worth it. Sometimes you must let kids learn things the hard way as opposed to simply explaining it. Just be sure not to sacrifice the family’s finances to teach this lesson.
