How to think critically about capitalism and allowance with kids?
September 3, 2023 6:13 AM   Subscribe

How do we start talking to our child about capitalism more critically, especially using her allowance as the main way money is real for her? Don't want to be didactic, just to start asking slightly bigger questions than "What do you want to spend your money on?"

We have a 7-year-old who gets $7 a week (pegged to age) as allowance to spend as she likes (except for books &, like, treats from the ice-cream truck, which we buy). I would like to start, gently and over the very long term, having more thoughtful discussions about capitalism and money with her (things like: How do we make good choices with our money? What ARE good choices? Why are some things cheap and some expensive, and who profits and who's exploited? Why do we even have the money to give you an allowance when others don't?).

How did you do this with your kids? What were your really good questions? Did you read things together? (Not interested in sitting down for a formal Capitalism 101 lesson with her, but I'll take a resource if it's good.)

I realize this is a bit open-ended, but I really am open to answers of all sorts.

I'm also not very formally educated in economics, so there are plenty of things I don't understand myself, much less can I discuss them in child-friendly language. I am imagining using allowance as the chief thing to center these conversations around, but hell, maybe that's the wrong way to go about it.

In other words: Does the Communist Party have a children's publishing division?
posted by catesbie to Work & Money (19 answers total) 16 users marked this as a favorite
An allowance is a great way to learn life skills. I started transferring a larger block sum to my child in grade 9, sending money for 3 weeks of school lunch at a time plus some spending money. Having a larger sum of money is more interesting. The entrepreneurial child will make their own lunch and save the bonus, and the lazy spendthrift will go hungry. This sort of lever really only works with a neurotypical child.

The other classical lever for allowance is working for what you want. While I understand that under capitalism, hard work isn’t rewarded, allowing your child to be passively rewarded by intergenerational wealth transfer to buy things is not something you want to promote either. I personally like the work-for-cash model, paired with scheduled transfers of money, because that’s how pay cheques work.

For the reason I stated in the last paragraph, allowance is a bad tool for teaching on capitalism. A kid's best chance in life under capitalism is to start by taking from their parents. Another fundamental lesson in capitalism is that rich people don’t stay rich by paying for things, they stay rich by externalizing their costs and losses while retaining their profits. Having your child learn these lessons well will not benefit you as a parent. Unless you are positioning yourself as an investment banker, plowing money into the family home (if you own one) for asset transfer later in life. Personally this is not how I want to position myself.

My daughter is 16 and we have organic conversations about wealth and privilege. It will really come up if you have people in your life of different economic statuses. You sound thoughtful and you have a point of view, you’ll probably be safe taking an organic approach.
posted by shock muppet at 6:56 AM on September 3, 2023 [1 favorite]

In public school in Georgia, early social studies materials for that age or soon after included the basics on goods & services, wants vs needs, etc. Those were pretty generic, but useful to build on by talking about how different people might vary in what they get of those, or how we could better meet all needs.

My daughter is 9. Here's what I can remember we talked about::
-Advertising, and how it's used to influence your choices. Also how youtube influencers are also advertising
-Why is problematic that people have billions of dollars; how they got there, how money grows, etc.
-Using what we have toward community resources to help others, like sharing food with our community fridge.
-Disparities in town with neighborhoods and how that relates to race and poverty.

99% of these conversations happen when shes in the car and we see something relevant. She still spends much of her allowance on slime and stuffed animals. But she's going into the world at least knowing about the other things.
posted by bizzyb at 6:59 AM on September 3, 2023 [1 favorite]

I would be inclined to start by contextualizing their allowance within the family finances. Like, actually talk about what the family earns, what things cost, and how taking care of the family unit includes making sure people have the things they need and what they want that you can afford, and frame the allowance as "we are giving you this part of the family budget to control."

And from there, let the kid ask questions, and do your best to find resources for them to learn more if they want to. I learned about money mostly from the books my dad got and then failed to read, and things like the Tightwad Gazette (how to squeeze a penny til it squeaks) were more "real" to me as a younger kid than the higher-level budgeting books. Comparative value was something I could see and feel and do the math for myself in the store, and it's a good place to start.
posted by restless_nomad at 7:22 AM on September 3, 2023 [4 favorites]

Directly related to surviving in a capitalist society is savings. I might make up a savings "account" for her and encourage her to use it by contributing 50 cents for every dollar she puts into it with the rule that she can only spend the money on something big every few months. Delayed gratification is an important lesson.

A game you can play with math skills is to look at prices in the supermarket and find places where you pay less per unit by buying more. You can start with simple 2 for 1 promotions ("how much am I paying for each one?") and move on to more complex cost per unit/ounce/gram as appropriate. It teaches careful shopping while also demonstrating that the oftentimes the less you can afford the higher the price you’ll pay.

At a broader level it is a demonstration of why the rich get richer and the poor get poorer. It’s an important lesson about capitalism, and from a practical standpoint a lesson in why to stay on the better side of that equation.

Above all I would emphasize the role of luck in all of it. You were born into a situation where working hard got you particular payoff. Others are born into situations where they get much more or much less. That’s not anyone’s fault but capitalism is based on exploiting that fact; it would be great to demonstrate your interest in fair trade and in general basing purchasing choices on people getting what they deserve rather than what you can squeeze out of them.

I realize all of these are about money, but that’s capitalism for you.
posted by Tell Me No Lies at 8:06 AM on September 3, 2023 [1 favorite]

What was and is useful is to take your child grocery shopping with you, when you also have time to talk purchases over.
This gives you real life authentic situations to discuss what you yourself spend and why.
Around that age, 7 and 8 my son enjoyed coming along and we would talk about the options.
Like, i was able to explain that yes there are strawberries but i do not buy fruit flown in, and also out of season, lets wait 4 weeks for the local ones. This led to interesting conversations about my own thinking and also a purchase of out of season fruit, and he found it tasted boring. Later we bought them locally and they were tasty.
Or why i refuse to buy produce from Spain (we live in Austria , Europe) as the conditions for the workers are appalling there, which he totally took on board but not in a scared way. I focused on the workers living conditions (No toilets, no water plastic huts with mud floor to sleep in etc) and skipped the part that female workers suffer sexual violence.
And as he enjoyed maths immensly, we calculated prices for multipacks vs. single packs, that multipacks are not always best.
Basically explaining my choices and budget, but i kept it light, not a lesson type thing, like i would to a friend interested in my thoughts.
More recently he has become quite critical of brands, on his own.
I think at age seven, the more you can stick to real life situations the better and the child will also see your values better than in a theoretic conversation. And, as is likely to happen, you make choice that actually runs counter to your ideal, a good opportunity to learn that yes this happens too.
posted by 15L06 at 8:21 AM on September 3, 2023 [1 favorite]

What is your goal in teaching a 7-year-old about capitalism? Is that within the scope of what a 7-year-old has any capacity to influence? Is it about cultivating empathy for those less fortunate? Gratitude for what one has? Or are you intending your child to be a revolutionary who is going to defeat capitalism? If anything other than the last option, I think the values themselves would be more convincing than intellectual concepts like capitalism.

Seeing as she's going to have to survive within capitalism for her whole life, likely, it might be a good idea to teach her self-preservation first. How to manage money and not get ripped off. How to resist the temptations of consumerism. How to negotiate a higher salary.

But these topics don't seem pertinent to a 7-year-old imo. Ultimately your best option would be to develop her character by focusing on the positive values you want to instill. Honestly your best bet for that is leading by example. Kids do what their parents do, not as they tell them to do, no? So model the behaviour you want to see, rather than saddling a 7-year-old with the immense and inexorable world economic system and expecting her to change it.

I don't have kids, so YMMV on this advice.
posted by winterportage at 8:26 AM on September 3, 2023 [19 favorites]

An allowance is how kids practice…but you have to let them make mistakes with it. So yes, I let my kids buy dollar store stuff and then it broke and they learned, and separately we talked about plastics in the ocean and eventually sweatshops and things. But if you give a kid an allowance and then make them feel bad about what they want to do with it, they end up with bad feelings about money and making worse mistakes once they are out of the house (from other experience.)

Almost all the educating should be around what you do. One example: Starting from age 4 or 5, I’ve always given my kids 10% of our grocery budget to shop for the food bank. They learned, over time, how to choose things on sale to go further, think about nutrition, and also put spices and oils and soy sauce in too. They learned to manage that budget - and to help provide for others, like good should just be shared. My 18 year old took all his friends out for an expensive meal this year by saving the “cafeteria” part of his allowance by packing lunches at home.

For manufacturing, I talked about my own choices, both large - not replacing furniture even if it’s a bit shabby, my husband had them help with repairs, etc. and small, like saying I’d like a top but it’s fast fashion and I don’t need it so ehn. When school clothing shopping, again, I let them make their own choices. Sometimes they really wanted the fast fashion or sports thing. Mostly they start at the thrift shop. I never put a judgement on them, I just led by example. For shoes, I talked about why I buy my boots at an indigenous-owned sustainable shop, but also my feet don’t grow at the same rate so paying the premium made sense. We buy high quality electronics but then let them get generations behind.

I’ve found if you want your kids to “stand up to” capitalism they need to have security and that they have a choice. My parents were hippies and did not give me the same space, and I felt bad about myself, not the world, when I had out of date, worn and patched clothes or couldn’t go see a sell out movie or concert.

I really firmly believe that we can lead our kids, but we should not make them pay (any more than they already are, which is immense in terms of climate change etc.) the best way to do that is live our values, and trust that even if they do go through phases of consumerism that they will figure it out. Because equating your worth with how you spend your capital is kind of the root of it.
posted by warriorqueen at 9:24 AM on September 3, 2023 [14 favorites]

I told my son that allowance is because he's part of the family and everybody deserves some money of their own. Same with chores; we are all expected to share in the work of our home. He would occasionally save allowance towards a goal, a big skill. I think your kids will learn the most from how you model your financial lives, so be open about how you make financial decision.
posted by theora55 at 9:47 AM on September 3, 2023 [1 favorite]

You can't teach values effectively that you don't yourself understand, believe in, and practice. Many of my attitudes towards money and capitalism were formed in church--my parents were leftist/hippie Episcopalians and really tried to live out the social justice mission within the usual limits of human frailty and ignorance, and, if your priest so chooses, you're going to spend a lot of time in church on your knees praying for people who have less than you do. Now, our family was also often struggling financially, but we were actually one of the more stable households in our neighborhood (which never stops being depressing to think about). So I felt the deprivation that warriorqueen mentions, and I agree that it can lead to overcompensation as an adult, etc.--but it was also within that context, so we weren't living radically more austere lives than the kids we saw every day. Anyway, I'm an atheist now, and I didn't inherit my mom's loving temperament nor her optimistic view of the world, but our beliefs about the injustice of capitalism are closer than you might imagine.

You don't mention belonging to a religion, so I'm guessing you can't use that as a foundation, but what I'm trying to say here is that the most important text is your daily family life, and you need to know what you're writing there. Handing kids books is step seven or eight in the teaching process for a subject that structures your mundane life so intimately. So...what do you believe, and how does it affect the way you live? Start there. You don't need to be an economist--my mom sure isn't.
posted by praemunire at 9:50 AM on September 3, 2023 [4 favorites]

I don't know. This seems like a lot for a seven-year-old and I know if my parents tried teaching me about capitalism and exploitation it would have sent my guilt and anxiety into overdrive. Capitalism is a societal issue that's much larger than all of us and the problems it causes are hard to address on an individual level. I don't think a child that age can fully grasp what it means to have problems on an individual vs societal level and what our role is in addressing those issues (and, by extension, how blame is often blamed on the individuals for problems that are really caused by this late capitalist hellscape that we're powerless to stop. I can imagine a child that age feeling responsible for the problems caused by capitalism and developing guilt about certain spending habits that will follow them into adulthood. I would think ten to twelve would be far more appropriate ages to introduce these topics at the absolute earliest.

You can, however, teach her responsible spending, how to save, the consequences of not saving, and to support local businesses. I almost think a lot of this would just teach itself to her--if she wants a toy she'll have to save for a bit to get it, and if she gives in and buy something cheaper she won't be able to get the cool toy she's been saving up for. Instead of explicitly teaching the societal and environmental impact of mass producing cheap goods, you can encourage supporting more ethical, local stores, even if it costs more. Tell her, hey, when you buy something from here, you help support this store owned by our neighbors! You're helping our neighbors! Isn't that great? etc etc. You can also start talking about how some people have less money than us and have trouble affording things like food and clothes, and model giving to reputable charities in order to help those less fortunate. Modeling it and making it seem super special and rewarding is a great way to encourage your kid to give back. I would not force the issue, at all, or guilt her for wanting to spend it on herself because being a kid is hard and self-care is important. But modeling is great and offering a choice to give something to charity is a great way to start teaching kids about how money impacts the people around us.

Anything more than that, including explicitly teaching a child the term capitalism and its more serious consequences that we as individuals have little power in stopping, just feels like it would be upsetting and overwhelming. Capitalism is garbage and she has the rest of her life to worry about it. Let her be innocent of it for now.
posted by Amy93 at 8:48 PM on September 3, 2023 [3 favorites]

One of the myths that capitalism tries to inculcate early on is that money and possessions can buy happiness - more and better stuff will make you happier - more money will make you more important or worthy. As a parent and an environmentalist, I try to push back on this narrative both by example and word with my kids.
Is there a cause that is in important to your kid? My kids adore animals and often feel motivated to give part of their allowance and money they get for birthdays from relatives to non-profits that support animals. One of my kids has even requested extra chores to do in order to raise more money for animals. This is never demanded of them - they can spend their money how they choose, but they often choose to donate some of their money.
posted by bitbotbit at 6:03 AM on September 4, 2023 [2 favorites]

I think this question is awesome. Particularly because there is tons of research that shows how much of our economic behavior is rooted in our emotional brain, and how we respond to fear and risk, which is VERY molded in childhood.

Maybe a fun thing to do with your kid is some little experiments? There are three books I love which discuss experiments in this context. Maybe you can recreate a few.

1) The Undoing Project is a great book - a great audio book listen. It discusses the friendship between two scientists who won the Nobel prize for proving out certain errors in the human psyche. All of economic theory assumed that people behave rationally when interacting with economic systems. But they don't! The context changes wildly based on the risk perceived. There are all kinds of interesting experiments and scenarios they used to prove this out. It could be fun to recreate one?

2.) Predictably Irrational - another book based on a similar psychological framework. This research showed that the concept of supply/demand is more of a cycle than a straight line. Things like MSRP or pricing, or even just the suggestion of random numbers, make people assume things about value that aren't rational. Once you learn this you can have better awareness of your habits (and of the system around you).

3) Drive by Daniel Pink - a great book about how people are (and aren't) motivated by pay. The book describes all manner of experiments and studies which outline how people are motivated by intrinsic rewards (like the joy of running a faster time than you did last time or solving a puzzle) vs extrinsic rewards (like being paid for your labor) and how extrinsic rewards can erase intrinsic joy.

I'm not suggesting you read these with your kid! But you might come up with some interesting "experiments" to do with them based on the studies in these books which might be a more fun and interesting way for them to get more aware of their own behavior and the systems they will interact with!
posted by pazazygeek at 7:15 AM on September 4, 2023

Response by poster: Thank you all for a variety of awesome answers that really span the whole spectrum, exactly what I was looking for. In case I somehow failed to make this as clear as I assumed, of course I am not literally trying to teach a 7-year-old economic theory, but, you know, over the very long term I am trying to raise a human with a healthy skepticism of received wisdom who understands that we live within systems that were not the only available choices. E.g., specifically with money, that "buying the absolute cheapest thing with no regard to other factors" is one choice among many and that there are a lot of things that make something cheap, some of which involves the exploitation of less-lucky humans. And that we should work together to try to make things fairer. Basic parenting-values stuff.

But gently! She's 7! Just trying to gather some food for thought that is age-appropriate.

And yeah, I know there are deep divisions on the subject of allowance and whether it should be payment for work or a money-management tool. I chose the latter, somewhat arbitrarily and also because it feels creepy to be paid to do things for a household that you should just do because they have to be done. (And yes: getting money for doing nothing is also creepy! Turns out capitalism is problematic generally!)
posted by catesbie at 8:02 AM on September 4, 2023

it feels creepy to be paid to do things for a household that you should just do because they have to be done.
The arbitrary division between productive labor — the work that capitalism exploits you for — and reproductive labor — the work that “has to be done” to make you rested, fed, and healthy for productive labor — is a key feature of the capitalist mindset. “Wages for Housework” (previously, previously) was a big Marxist Feminist organizing platform in the 1970s. As much as “allowance contingent on chores” has a strong odor of Protestant work ethic to it, “you shouldn’t get paid for housework” does reinforce this capitalist and gendered division of what kind of work is remunerable. Universal Basic Income can sometimes be construed as partly a wage for housework, so I wouldn’t call that necessarily creepy either!
posted by xueexueg at 9:36 AM on September 4, 2023 [1 favorite]

Response by poster: xueexueg: Excellent point. I'm a little bit familiar with WFH. Still not paying her to pick up her goddamned toys, though.
posted by catesbie at 9:46 AM on September 4, 2023 [1 favorite]

We just give allowance as part of the household, and regular chores are also part of the household. However, our kids can earn money doing extra chores like larger yard work or helping with things they aren't always responsible for, like cleaning out the boot trays. I also pay bounty on certain weeds in the spring. It's entirely possible to do both. :)
posted by warriorqueen at 11:11 AM on September 4, 2023 [1 favorite]

How to negotiate a higher salary

When I was a little younger than your daughter, my dad said that he would pay me a penny a dandelion that I picked out of the front lawn. The neighbor kids had also been offered a similar cash for item scheme of picking rocks out of a new raised bed, or something like that, for a whole dime a rock. I heard about this and I asked my dad if I could get two cents a dandelion. He said no, and also his rate was half a cent a dandelion from here on out. He said when I was much older that he wasn't trying to teach me that sort of money lesson, but rather he was just cheap and he thought the original offer was too high.
posted by lizjohn at 8:07 PM on September 4, 2023

A friend of mine grew up with her parents sponsoring a child her age. She says it led to a lot of conversations that developed her compassion.
posted by Former Congressional Representative Lenny Lemming at 1:10 PM on September 5, 2023

The family unit is very not capitalist - each according to their needs and all that. At 7, not sure what you can convey. But as she grows it might be useful to talk about how little she contribute to the household in terms of money and work, and how you nonetheless value her because she is a person and what it would do you and the spouse and everyone else in the house to coldbloodedly feed and clothe her based on how much she could contribute - instead of making sure that all are thriving.
posted by Lesser Shrew at 8:35 PM on September 6, 2023

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