“Working to help parents raise money-smart kids.”
BOO!
Hello, friends, and welcome to the Halloween edition of “3 Ideas to Share & Save.” 🎃👻🕷️
In keeping with today’s theme, I thought I’d share with you 3 creepy, crawly and scary mistakes I don’t want to see you make on your journey to raise money-smart kids.
— 1 —
Make Sure Your Treat Bag Is Full 🍭 🍫 🍬: I’ve yet to meet a parent who doesn’t answer an emphatic YES to the question, “Do you want to raise a money-smart kid?”
Still, many of us aren’t optimizing the financial socialization systems that researchers have identified as essential. (Broadly speaking, “financial socialization” is a fancy term for the ways we learn about money.) So several weeks ago, I shared my essay, “No Single Point of Failure.” In it, I identify the three key areas of financial socialization:
- Experiential learning
- Modeling
- Direct instruction
I’ve listed these systems in what I believe is their order of importance. Frequent readers of this newsletter will likely not be surprised by my tapping experiential learning as the most consequential of the three areas. For as I’m sure you’re aware, we learn best by doing.
Next up is modeling, or what our kids see us (and others) doing with money. You’ve no doubt heard the adage “Kids do what we do, not what we say.” It has its roots in modeling.
Rounding out the financial socialization list is direct instruction, which typically features a teacher (or parent, friend or relative) presenting lessons.
I hope you enjoy my audio essay below, as my intention with this new podcast format is to help make sure all your youth money-smart bases are covered.
And now on to some more mental candy!
— 2 —
Let Them Decorate 🏠 🎃 🧙🏽♀️: I like things organized: I prefer a clean room and a clean desk. However, I realize this state is not optimal for everyone. Others thrive in chaos. Still, I used to get upset even peeking into my kids’ disaster pits … er … rooms.
I knew my daughters were capable of cleaning their spaces because I’d seen them do it. (Ok, bribes might have been involved. 😉) Most of the time, though, their rooms reminded me of the Star Wars trash compactor.
My dad will chuckle at my current fastidiousness because he likes to tell people I was a slob as a kid. Let’s just say he’s not exactly wrong. My teenage room could be a bit of a wreck. 🤷🏻♂️
Nevertheless, my daughters’ dirty rooms really bothered me. Then I read Barbara Coloroso’s wonderful book Kids Are Worth It!: Giving Your Child the Gift of Inner Discipline.
In this guide, Coloroso focuses on raising children in a dignified way. I will probably do a deeper dive into the book in an upcoming newsletter, but for our purposes today, Coloroso wants us to help our kids discover inner discipline via experience, both good and bad.
When we threaten or bribe our kids to, for example, clean their rooms, we’re only teaching them to please us. And while that certainly has a temporary upside, it’s ultimately just a means to an end.
However, when we model the behaviors we want to see and act as our kids’ guides rather than their tormentors, they stand a better chance of coming out on the other side of the experience with the intrinsic motivation to do things that will enrich their lives. Of course, as I said before, the outcome might not be exactly what we might want. But it stands a better chance of being a result that is better for them.
We all choose our parental battles, and Coloroso helped me decide my kids’ dirty rooms weren’t arenas in which I had to fight. Aside from the possibility that a new organism might be germinating beneath their clothes piles, these spaces weren’t life-threatening and, therefore, weren’t worth the conflict.
Instead, I would turn my attention to keeping my own room clean and hoping my daughters would learn from my modeling. And though their spaces still aren’t always tidy, they are beginning to discover for themselves there might be value in some semblance of order.
So what does this have to do with raising money-smart kids? Well, one of the primary reasons we give our kids an allowance is to help them learn from their own experiences, a theme you’ve no doubt heard in some form in this newsletter, on my blog and in many of my podcast conversations.
Coloroso even discusses the value of mistakes in her book:
“It is usually best to allow kids to experience the consequences of their mistakes and poor choices, which are theirs to own.”
What’s more, friend of the podcast and author of The First National Bank of Dad, David Owen, provides a practical framework through which we can decide whether or not to intervene when it comes to decisions our kids are making with money:
“Am I doing this [intervening] because I’m worried that my child is going to do something stupid with it [money]?”
To be sure, this doesn’t mean we should be passive. We can introduce concepts from my book like “The Waiting Period” and incentives to help our kids make choices in line with the values we hope they might adopt. Because ultimately, we should act as guides and help them on their money-smart journeys.
— 3 —
Candy Doesn’t Magically Appear 🍭 🍫 🍬: “Practice makes perfect” is an aphorism that everyone knows. However, I think it is doing more harm than good.
We’re not in pursuit of perfection; we’re in pursuit of improvement. Since the latter is something we can make happen in any moment, I think “practice makes better” is a more useful saying for us all.
Your kids are certainly not in pursuit of perfection tonight. They’re in pursuit of more candy! And they’re not going to fill their bags by sitting on the couch. They have to get started. So put on that costume, grab a bag and go trick-or-treating!
Similarly, money-smart practice can begin at any time. I know you’re busy with today’s spooky celebrations. But tomorrow is as good a time as ever! If you haven’t started a program yet or if you’re looking to beef up your existing system, then here are some resources for your money-smart journey:
- Try our Allowance Launcher.
- Download and read my book, The Art of Allowance.
- Visit one of our partner credit unions, such as F&A Federal Credit Union, Great Lakes Credit Union, and Louisiana Federal Credit Union. (You can also email me to find out if there’s a partner in your area.)
Until next week, enjoy the journey! And the candy!
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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