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My daughter is four, and it was upsetting to me to see purposeful lying from her at that young age. I dealt with the blaming of the imaginary friend for misdeeds, because that seemed more like imagination at work. But the outright lying disturbed me. I've always told her she can always tell me the truth, even if she thinks it may upset me. I had to remind myself that as a little girl, she doesn't want to upset me and it's only natural to avoid that. She's not going to grow up to be a sociopath because she lied about acting up at school.
What I do is, when she is honest about something, to talk calmly to her about her behavior, then let her know I appreciate her honesty. But when she's caught in a lie, it's the lie she gets punished for, more so than the behavior. I let her know it's okay to make mistakes and bad choices sometimes, but it's never okay to lie about it.
It must be the age of discovery for it. When my daughter was four, I caught her trying to cheat at Candyland. She'd peaked at the next card when she thought I wasn't looking and saw that I was going to win, so she changed the next card.
I used to hide the lower grades from my parents (otherwise I was an excellent pupil), and when they would ask specifically, I lied. The reasons for this were too sharp punishments, both physical and psychological. It is terrible when a mother does not speak with her child because of grades lower than expected. So I would buy the time, sometimes I improved the assessment before the lie was uncovered.
I have been teaching for quite some time and I found that many children lie to avoid disappointing their parents who have unrealistic expectations, compared to the real possibilities.
From both experiences, I know for certain that the children are very unhappy when they lie to their parents. The first reason is that they are not able to resolve the problem (a bad grade, a conflict in school) by themselves, but they cannot seek the help of parents because they had lied to them. Another reason is the constant fear of the reaction of what will happen if the lie is uncovered. They becomeabsent minded, learn less and enter a vicious circle of failure and lies.