Tagged Family Money

Living with a Teenage Data Hog


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After children reach a certain age, most parents give in to their desire for a mobile phone. We like being able to find them at any moment, and they risk being left out if their friends can’t ping them. A Pew Research Center report from last year found that 88 percent of American teenagers now have phones.

But today’s smartphones have earned that name because of their ability to suck in and spit out data at ever-faster rates. That gets expensive, quickly, and figuring out who should pay for the data, how much, and according to what rules, can be a giant headache.

So first, an opening proposition: The ability to access the internet via a cellular signal, in those passing moments when Wi-Fi is not available, is a want and not a need for most teenagers. And if they want it, they should pay for it themselves.

But when I share that assertion with many parents I know, they often respond by patting me on the head and telling me to get back to them when my 10-year-old has a phone and all her friends do, too. To those parents, a data plan is no indulgence. Their kids are busy — constantly on the way to an athletic event or rehearsal. They don’t want to deprive their kids of the ability to stream music or stay connected with their friends on data-draining apps like Snapchat. So a data plan is a given, and the parents are willing to pay.

But just how high a bill is reasonable? I suggest the budgeting approach: Parents pay for a certain amount of data each month, the children track how much they’ve used, and then they pay for anything beyond that allotted amount.

It’s simple enough in theory. Carriers lets customers check to see how much data each person in a family plan has used so far during the month, and the privilege of having a phone should come with the responsibility of keeping track.

That approach does, however, require you to sit down with your teenager and identify the sources of data drain and perhaps set rules for when those apps ought to go off. The Times’s Wired Well columnist, Jennifer Jolly, lives with a data-draining teenager. She suggests turning off any features on a teen’s phone that drain data automatically in the background. Also, track the apps that use the most data and limit data hogs like Spotify or Snapchat to times when the teenager has Wi-Fi access. One additional hint: The more video an app records, transmits and receives, the higher the data bill is likely to be. Call your carrier or consult online forums if you need more help.

In an ideal world, this approach teaches patience, self-control and restraint. Your kids can always watch a video a little later over Wi-Fi, after all. And many messages – most, even – can wait a bit.

But in a less than ideal world, teenagers tend to go over their caps, especially if their friends send lots of videos back and forth via Snapchat. Some parents have enough money to simply pay for the overages. But discussions about those bills are useful. If we don’t set limits, after all, who will? And isn’t our job to get our kids ready for the moment when they really will be paying their own bills?

A few years ago, I wrote about the Russell Plan, named after Mary Kay Russell, a mother of four sons in Naperville, Ill. She added her sons to the family’s cellphone plan when they were ready for their first phones, and the cheap devices they received came with unlimited calls and texting. The boys were welcome to burn data to their hearts’ content on an upgraded phone, but if they wanted to do that, they would have to pay for the device and prepay $360 for a year’s worth of data. The oldest waited until age 21 to get his first fancy phone.

Perhaps his response to the family’s strategy was not such a big surprise. The cost of a smartphone plus data is a big pile of cash to a middle school student who may not have many ways to earn money. Parents who can afford it might consider raising a child’s allowance some to put the decision just within their reach – and make the possibility of waiting on an upgraded phone more enticing.

How much more allowance might they get? It depends on whether you’re asking them to use allowance to cover lunch, snacks, transportation and clothing, too. But you could increase the allowance enough to pay for 50 or 75 percent of a basic data plan, so that the choice to purchase it would involve some sacrifices elsewhere.

Yes, you’re technically “paying” for the data plan in this instance, but that’s true with allowance in general. Once your children have it, the money will feel like it’s their own, and the trade-off will feel real, too.

The Russell children could have asked for upgraded mobile devices and money toward data for birthdays or Christmas, but they often had other priorities. Which is great: We want our children making financial trade-offs, since that is what they’ll have to do as grownups just about every day of their adult lives.

Ron Lieber is the Your Money columnist for The New York Times and the author of “The Opposite of Spoiled,” about parenting, money and values.


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What Should You Pay for a Child’s Guitar (Or Any Musical Instrument)?


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It should have been a simple enough request. My 10-year-old, after several years of piano and voice lessons, had asked for a guitar.

But what to buy? I posed the question to my Facebook friends. Full-size or smaller? Acoustic or electric?

A couple of guys from the best campus band from my college days suggested the Baby Taylor, a three-quarter size (also known as parlor-size) acoustic guitar made by the El Cajon, Calif., company that the likes of Taylor Swift and Jason Mraz count on for instruments. A new one generally sells for around $329.

But then I heard from my friend Craig Bromberg, the father of 11-year-old guitar-playing twins and a serious musician himself. He let me have it for even considering buying a brand-new guitar. “I for one can’t stand the idea of kids with fancy instruments before they have even taken a single lesson,” he wrote.

He had a point. I’ve devoted a decent chunk of my professional life of late to trying to talk parents who have more money than average out of overindulging their kids. When it comes to cars, a shiny used one is generally the best choice. As for fancy mobile phones, get a dumb phone with basic voice and text service or let them pay the difference between that and the roving Internet access and shiny hardware they crave.

But musical instruments (of all sorts – not just guitars) are tools for learning, and that makes them different from cars or phones. Many forms of athletic gear for older children – tennis rackets, lacrosse sticks, gloves for baseball or softball – are similar. Even so, I realized that in considering my child’s request for a guitar, I got caught up in all the usual aspirations we have for our children, as well as my own memories and regrets about my musical training.

The lesson: We ought to put every object of child desire through its own wants-versus-needs test, one that inevitably ends with a question about how much is enough.

When I called up the people at Taylor Guitars to ask them how much guitar a 10-year-old truly needs, they put me in touch with Andy Powers, who is in charge of guitar design for the company. A parent and former guitar teacher himself, he does not necessarily default to his own company’s instruments when recommending a first guitar to other parents.

“I say that the first thing we want to do is get the kids an electric guitar,” he said, because electric guitars are often easier for beginners to play. His company doesn’t make very many of them and none at the entry level.

And he offered advice for helping a child stick with the instrument. “The first thing you want to teach them is their very favorite song,” he advised.

But how much should you actually spend? Mr. Powers outlined the two approaches he hears about most often. The delayed gratification theory has children doing the hard things first. You study, practice and bear with it, and then you get the nice guitar. The other is instant gratification – buy the nice guitar to start to make learning the guitar enjoyable as soon as possible.

Mr. Powers advised against the delayed gratification approach because it could sabotage the child’s learning. “The least enjoyable part is the moment you first pick it up,” he said. “You’re physically struggling with an instrument that you don’t know much about.”

And for a child like mine who wants to play acoustic, he couldn’t help but wax eloquent on the virtues of the Baby Taylor’s function over form: its intonation, seasoning and repairability. I know a bit about music and caught his drift, but I wasn’t sure his arguments would pass muster with every parent.

I took his comments back to my friend Craig. He reminded me that most famous musicians did not learn to play on top-of-the-line equipment. And while the Baby Taylor is portable (which is why many adults love owning it too), he wondered whether we’d be inclined to tote it around given its price and the possibility of damaging it.

My wife asked another question that I hadn’t thought of: Why not buy our daughter the cheap guitar (or at least a decent but lower-priced used one), and spend more on a really great teacher or a larger number of initial lessons? It’s an excellent question, if only we knew which style of teaching would be best for her. Picking out an instrument seems easier somehow.

One of Craig’s most recent musical purchases for one of his sons was a used instrument. Indeed, buying someone else’s Baby Taylor would set us back only $200 to $250. Older ones seem to hold their value reasonably well, which means we could hock ours if my daughter doesn’t take to playing or graduates to a bigger guitar within a few years. Craig said he did not find this approach overly indulgent.

And to Mr. Powers at Taylor, who has made music his life’s work, the choice of instrument is one with the highest of stakes, as he’s not sure he would have stuck with it if he had been learning on a glorified toy. “The difference between that person who says ‘Oh yes, I took lessons when I was a kid’ and someone who engages forever is when they cross over from studying to doing an instrument,” he said.

I do want my daughter to play on a guitar that gives her the best chance of crossing that chasm. But my hunch is this: It wouldn’t have taken $329 to get me to “do guitar,” had anyone thought to suggest it when I quit classical piano lessons after 10 years.

And perhaps that’s one more reason I find the used Taylor — which we’re now in the process of hunting down, at $100 or so off the new price — so enticing. If my daughter doesn’t stick with guitar, I just may keep her instrument for myself.

Ron Lieber is the Your Money columnist for The New York Times and the author of “The Opposite of Spoiled,” about parenting, money and values.


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Should Moms Manage the Money?



“Daddy has to work! You have to come pick us up!”

When Kimberly Palmer heard those words come out of the mouth of her 5-year-old daughter, she was dumbfounded. Both she and her husband have full-time jobs, so where had the little girl gotten the idea that Daddy’s work mattered more?

Ms. Palmer didn’t know, but she took it as a call to action. Although she’s written about the topic of money management for a living for many years, she wasn’t handling many of the money management tasks in her own household.

So her advice for heterosexual women in two-parent households in her coming book, “Smart Mom, Rich Mom,” is this: Moms should be in charge of the management of household finances. All of them. Always.

Many couples will bristle at the idea that any family task other than breast-feeding should be assigned on the basis of anatomy, even if they are often self-selecting in this manner by choice.

In many households, men tend to manage family investments and taxes, and women, if they get involved in money issues, tend to focus only on everyday expenses and charitable donations.

A 2014 UBS Wealth Management Americas report noted that when it comes to investing, however, it’s men making the decisions alone half the time. Another 37 percent of couples shared the decisions, while just 13 percent of women made them alone. Among younger women, just 15 percent of millennials and 18 percent of Generation Xers were flying solo.

Same-sex couples often have separate accounts and make individual decisions, which is probably a legacy of the fact that it was hard for them to marry and combine accounts until recently.

One reason men may handle investing more often is that they tend to come into a marriage with more assets. A 2014 Wells Fargo study of millennials reported that the males had both a higher median household income ($83,000 vs. $63,000 for women) and higher median assets that were available for investing ($59,000 vs. $31,000).

Or perhaps men simply like handling this task more. Does it really make sense to take it away from them? Ms. Palmer pushes back against concerns over prescribed gender roles in three ways.

First, women tend to be better investors. Studies have shown that men have a bit too much confidence and take a bit too much risk. One seminal piece of research in this area showed how badly men’s investment returns suffered because they traded their stocks too often. A 2015 book called “Women of the Street: Why Female Money Managers Generate Superior Returns (and How You Can Too)” sums up the case for those who want to know more — or slip a treatise under their husband’s pillow.

Second, when mothers are the money leaders in the household, children take notice. For years, surveys of families have found that parents talk to girls less often about money than they talk to boys and that teenage boys end up believing they will earn more. Ms. Palmer clearly didn’t much enjoy finding out that her daughter viewed her as a driver and her dad as an earner. Moms who manage the money serve as role models who can counteract some of these problems.

Finally, many women will have to be in charge of the money sooner or later, so having some experience as the primary household money manager is essential. Women outlive men, and there are about four times as many widows as widowers in the United States, according to Ms. Palmer’s research. All of us who toil in the personal finance salt mines hear stories of widows who had to start reassembling their financial lives from scratch when their husbands died suddenly. When you are sad and older, you do not want to find yourself locked out of the household accounts, literally.

Divorce happens, too, so it’s good for both spouses to know where the money is (and if it’s been moved around recently) in the event of a surprise separation.

While Ms. Palmer wants women to be the financial captains of the family, she is not advocating a dictatorship. A couple’s financial discussions should be collaborative, whether the person executing the decisions is male or female. So you sit down at least once a year and remind yourselves of the answers to the following questions: Where is our money now? How do we get to it? Has our willingness to take risks with our investments changed? What are the most important goals for the next year? And what do we want to change?

Reading “Smart Mom, Rich Mom” made me acutely uncomfortable, precisely because I could not shake the feeling that I was doing it wrong. At the very least, my wife should be making all the moves for 12 months at a time, once every few years.

As for Ms. Palmer, she now has the password to the Excel spreadsheet her husband made that contains all of their financial information. And she’s started bringing her wallet along most everywhere she goes, even if it is a bit bulky.

That way, she hopes, her daughter will understand that her mom is just as invested in the money that gets made and spent in their family as her father is.

Ron Lieber is the Your Money columnist for The New York Times and the author of “The Opposite of Spoiled,” about parenting, money and values.

How Much Money Is Enough?


Credit Stuart Bradford

Most of us want our children to have the best of everything, but not too much of anything.

As a result, some families with much more than average impose a form of enforced (yet totally artificial) deprivation. Frequently the  “no” is not because they can’t afford it, but because the word “enough” is flashing on some scoreboard somewhere that only they can see.

Meanwhile, those of us who grew up hearing “no” a lot are tempted to say “yes” as much as we can, if we can possibly afford to. We want our kids to live better lives than we did as children — and better ones than we could afford last year.

Whether a family is affluent or struggling, however, every question about children and money and values eventually boils down to this: How much is enough? And how much is too much?

Consider one of the most recent objects of desire: The hoverboard. Before it became crystal-clear that its explosive battery was reason enough to ban it on safety grounds, parents struggled with the flashiness and the hefty price.

As I wrote a few months ago, the companies that sell them gamely tried to make these things a need and not a want. It’s transportation! No more expensive than a bicycle! For those of us who value at least a bit of modesty, however, we had to wonder whether being among the first kids in school to get a hoverboard was akin to being among the only grown-ups in town with a Mercedes. Nobody needs a Mercedes.

Social scientists tell us that we get more joy out of spending money on doing things than having things, and many of us do spend large amounts of money on our little people and their athletic pursuits. Plenty of children enjoy these activities more than anything else they do. Others, however, feel pressure to offer some return on their parents’ investment in the form of athletic scholarships or a college admissions boost. That kind of burden is too much, not just enough.

Still, there is no overarching, numerical definition of enough, even if you manage to limit American Girl dolls to just one or allow only a single new Lego set into the house each season. And no matter how precisely we may try to define the term, our parental understanding of it will shift even before we try explaining it to our children. Wanting more, as the financial planner Tim Maurer puts it in his new book “Simple Money,” is an affliction that is nearly universal and has little to do with how much we already have. “Our tendency is to move away from Enough — not toward it,” he writes.

This happens in part because of what surrounds us — and what we choose to surround ourselves with. If you haven’t yet chosen the neighborhood or town where you’re going to raise your family (or you’re thinking about upgrading or downsizing or a job change is forcing a move), consider doing a materialism audit of the places you’re considering. What sort of impact will those surroundings have on children’s definition of normal and how much they think is enough?

Everyone else might try two experiments. First, map out your own precise definition of enough in every category of spending that you do for your children. How much is enough when it comes to rain boots? Are the generic rubber boots at Payless or Target just fine, given that little feet will grow out of them pretty quickly anyhow? What if your children want fancy Hunter boots? Would you insist they use their allowance or birthday gift money to make up the difference between the prices of the Target or L.L. Bean boots that you consider “enough” and the luxury product that they want so badly?

Or will the high-end goods simply go on a banned item list? Most of us have one, even if it isn’t written down. Perhaps yours has violent video games, double piercings or weapons (real or fake). Mr. Maurer, having rebelled against a religious upbringing where so much was on that list, isn’t keen on making it too long (though he and his wife gladly ban in-app purchases and carnival games at amusement parks that require additional money).

As for everything else, Mr. Maurer suggests experiment No. 2: Forcing children to wait, for a good long while. “I don’t want my kids to buy something just because everyone else wants it,” he said. “More importantly, I don’t want them to want something just because everyone else wants it.”

We don’t control their minds, but we can introduce yellow lights and pause buttons. And so it goes with Mr. Maurer, whose 10-year-old son just successfully tried out for a competitive travel lacrosse team. The family happily pays for him to play. But the opportunity to upgrade to an optional $300 team helmet when the boy already had one that protected his noggin just fine led to some pointed family discussions.

It is that deep, searching dialogue itself that ought to be our end game, according to Barbara Nusbaum, a psychologist in New York City who specializes in talking about money and values with both children and adults. “They key is the mind-set to continually question and wonder in ourselves and in conversation with others about our choices,” she said.

So there can never be enough talk about enough. In the Maurer family, the conversation about how much helmet is enough helped everyone step back and consider the point of playing on a travel team in the first place. It isn’t about being a fashion icon and looking good on the field. The big idea is to grow as a person and athlete and teammate.

If their son does that well, then there’s always next year to consider the helmet.

Ron Lieber is the Your Money columnist for The New York Times and the author of “The Opposite of Spoiled,” about parenting, money and values.