A game creator has been fined by the FTC for not delivering on a board game funded by Kickstarter.
A game creator has been fined by the FTC for not delivering on a board game funded by Kickstarter. - 
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For many parents, there is the very real fear of raising a spoiled brat; clueless about money, how to manage it and how to be smart about it. According to Ron Lieber, author and personal finance columnist for the New York Times, raising a financially responsible child is a matter of being open to dialogue, as well as giving regular opportunities to be smart about money.

That means providing a regular allowance, free of any correlation to whether or not a child accomplishes tasks. In his new book, "The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money," Lieber argues that regular chores and allowances should accomplish two separate goals: fostering work ethic and teaching a child how to manage money, respectively. 

Read an excerpt from "The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money" below

The Allowance Debates

Three jars, unpaid chores, and a whole lot of patience

In the 18 or so years before your children leave for college, they are likely to want many of the following items: American Girl dolls. One-hundred-fifty-dollar sneakers. Then another pair six months later, when they grow out of the first pair. A second ear piercing. Beats by Dre headphones that will cover the piercings. Apps by the dozen. A microscope as powerful as the ones they use at school. Jeans with a price tag higher than in-state college tuition was 30 or 40 years ago. Concert tickets. Cars. An iPad. An iPhone. The new iPad. The new iPhone. Replacement chargers for the ones they lose, repeatedly. North Face jackets. A dog.

All the while, there will be many things you want them to do: Pick up a younger sibling from an after-school activity. Make the floor reappear in their room. Take out the garbage. Start dinner. Mow the lawn. Walk the dog. The dishes. Four loads of laundry. Grocery shopping.

Most parents consider these two lists and deliver a consistent message to their kids about the connection between them: Do the work, and we’ll give you money to save up to buy the stuff. They call the work chores, and the money is the children’s allowance. The lesson is that you can buy things, just so long as you do things.

It all seems reasonable. But there’s something fundamental that we fail to stop and ask ourselves during the decade or so that we make our weekly distributions to our children: What are we really trying to accomplish with an allowance anyway?

When parents tie allowance to the completion of chores, they make work the primary focus, not money. But children have many places to pick up a good work ethic. Strict teachers, drill-sergeant coaches, and choral conductors will instill plenty of discipline. Homework is a slog that builds stamina over time. Most part-time jobs that teenagers take on involve a fair bit of drudgery, but they adjust and get dressed down by difficult bosses, and few of them ever get fired.

We should certainly do our part at home by making them do all kinds of chores. But they ought to do them for the same reason we do—because the chores need to be done, and not with the expectation of compensation. If they do them poorly, there are plenty of valuable privileges we can take away, aside from withholding money. So allowance ought to stand on its own, not as a wage but as a teaching tool that gets sharper and more potent over a decade or so of annual raises and increasing responsibility.

Follow David Brancaccio at @DavidBrancaccio