“Working to help parents raise money-smart kids.”
I hope you’re having a wonderful Money-Smart Monday.
Our team has set a goal of helping one million families raise money-smart kids in the next decade.
Big goals are achieved step by step, or “bird by bird” as writer Anne Lamott would say.
I have a simple favor to ask of you that will help us achieve this goal: Could you please forward this newsletter to one friend or colleague who you think might benefit from one or more of these ideas?
I appreciate your readership, and I hope you enjoy this week’s 3 Ideas to Share and Save.
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Money as a Tool: A key tenet of The Art of Allowance Project is learning to use money as a tool. We want our kids to feel a sense of control over their money because a majority of the fiscal hopelessness that grips us comes when money has control over us. In situations of poverty, money literally has control and can lead to toxic stress. Child psychology researcher Chuck Kalish addresses this topic during his episode of The Art of Allowance Podcast, which you can listen to here.
Once we find ourselves in situations in which basic needs can be met, though, money can hold sway over us only if we let it. My recent podcast guest Gayle Reaume explains how she helped her daughter understand how to use money as a tool:
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Fall Cleaning: My wife and I are cleaning my daughter’s room now that she’s away at college. Despite the constant drumbeat of our trying to keep her consumption under control, we’re still finding an excess of clothing items, many bought during lockdown-induced retail therapy sessions.
My late stepfather used to talk about the importance of minding your “gazintas” and “gazoutas.” He was reiterating a simple premise: Make sure the money that goes into (Get it? “Gazinta!”) your accounts is greater than what “gazouta” (i.e. what you spend) them. We can flip this concept in my daughter’s case. Her clothing gazintas were far outweighing her gazoutas.
Several strategies exist to combat the accumulation of gazintas. For example, New York Times columnist and best-selling author Carl Richards writes about a “7-Day Mental Quarantine” as a way of protecting your house from being overrun with stuff.
I outline a similar concept in The Art of Allowance to help your kids keep their gazintas and gazoutas under control: The Waiting Period. This blog post includes a short excerpt about The Waiting Period from my book. In it I suggest having your kids wait one week before purchasing items over $50. This handy heuristic might help curtail gazintas into adulthood.
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Freedom from Free: You undoubtedly know the saying, “The best things in life are free.” I’ve abandoned this phrase because I want my kids to understand there’s a cost to everything, even if it’s not monetary. With so much online content available for free and “freemium” trials that get you started or, in some cases, hooked, payment comes in the form of time spent or information given away.
We live in a world of information abundance. Nobel Prize-winning social scientist Herbert Simon figured out this problem way back in the early 1970s. This period seems hardly information-abundant by today’s standards; however, it was when compared to, say, 1870.
[Herbert] Simon’s insight is often reduced to “In a world of abundance, the only scarcity is human attention.”—Kevin Kelly, The Inevitable
Though it may not seem so to a child with what feels like infinite years of life left in front of her, time is precious. And focusing our attention is what we do with our time. The problem is that our attention is fleeting.
Yet for being so precious, our attention is relatively inexpensive. It is cheap, in part, because we have to give it away each day. We can’t save it up or hoard it. We have to spend it second by second, in real time.
—Kevin Kelly, The Inevitable
How we use our time matters a lot. Often we will trade time for money. For example, a long commute for more salary dollars, a topic I discuss with friend of the podcast Ashley Whillans.
In this New York Times opinion piece about the time/money tradeoff, the authors note, “We found that the people who chose time were on average statistically happier and more satisfied with life than the people who chose money.”
That’s a life lesson worth teaching.
I hope you found value in this week’s 3 Ideas to Share and Save. As always, make sure you take time to savor the journey you’re on with your kids.
Until next week, thanks for reading.
John, Chief Mammal
P.S. Please consult with a financial or investment professional before engaging in any decisions that might affect your own financial well-being.
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