With Child Psychology Researcher Chuck Kalish
“Money is the way we interact with strangers.”
Chuck Kalish
The newest episode (Lucky Number 13!) of The Art of Allowance Podcast features Chuck Kalish, the Director of Science for The Society for Research in Child Development (SRCD). Chuck received his B.A. in Psychology from Swarthmore College and earned his doctorate in Developmental Psychology at the University of Michigan. Before Chuck joined the SRCD, he was a Professor in and a past Chair of the Educational Psychology Department at the University of Wisconsin-Madison. Chuck is an expert in understanding how children develop what we might consider commonsense beliefs and how kids interpret the social norms that we adults take for granted. He and I discuss toxic stress and its insidious effects, executive function and a recent study that has called into question the oft-cited Marshmallow Test. Also, as the headline suggests, Chuck explains his belief that videogames might teach financial literacy better than books. There is a lot to chew on in this particular show, as Chuck has a deep understanding of kids’ and adults’ relationships with money.
Please be patient with this somewhat wonky episode, as there are so many great points that we discuss and unwrap. The following are some of the many topics we cover:
- Research into kids and money is spotty, and a fair amount of it was conducted in the 70s.
- Executive function is exactly that: the “executive” who helps exercise control and manages the ability to pause and reflect.
- Executive function’s early emergence strongly indicates the importance of introducing financial literacy sooner rather than later.
- “The way poverty gets under the skin” – We discuss what toxic stress is and how dangerous it can be to the young brain.
- “People work on habit.”
- Involving your children in the charity decision-making process
- What emporiophobia means (I told you we were getting wonky here!)
- Using ballpark sizing of expenditures to help your kids understand practical information like rent, insurance, etc.
- If money discussions are difficult, then consider making these conversations about resource management.
- Though we are predisposed to be loss averse and we may not want to discuss these painful incidents, sharing with our children that we went through the same types of issues helps them relate.
- Giving voice to those monetary (or resource management) choices that your kids don’t see
- Ways partners might want to consider dealing with money value disagreements
- A recent update on the Marshmallow Test that may call into question the validity of the original study
- Margaret Echelbarger and Chuck published a paper about money personalities. Chuck believes that although individual differences develop, perhaps birth order is as much at work as anything. We just don’t know.
- We mention a NY Times article about living beneath your means (and the FIRE movement)
- The permanent income hypothesis and “dissaving”
- Chuck’s research helped the CFPB define financial well-being and provide resources for youth money smarts.
- A lot of what Chuck mentions refers indirectly to Daniel Kahneman’s System 1 (our gut reactions) and System 2 (our thoughtful considerations) from the book Thinking, Fast and Slow.
Click here for the full transcript.
If you liked this episode, you might enjoy my interview with Elizabeth Odders-White, Chuck’s colleague during his Wisconsin days. You might like my recent discussion with Sam Renick as we also discuss the importance of habits.
Please subscribe to our show to allow me to have additional conversations with parents and discover new ideas to help us all raise money-smart, money-empowered kids. You can find out more about our movement at themoneymammals.com/aoa as well as download a sample or get a copy of my new book, The Art of Allowance. You might also want to check out The Money Mammals, our program to get your children excited about money smarts when they’re young. Until next time, I wish you and your family well as you journey forth. Thanks for listening.
Full Transcript
This transcript is from The Art of Allowance Podcast, Episode 13, featuring host John Lanza and guest Chuck Kalish.
00:00:00,240 — John Lanza
Hello, everyone. This is John Lanza, your host of The Art of Allowance Podcast, and this is Episode 13.
00:00:09,680 — Chuck Kalish
That’s exactly the way to think about it, is, is the stress response is this fight or flight, right? Uh, you know, you, you move the blood to where it needs to go so that you can run away from the tiger. Um, you know, thinking about the future is not a good thing to do when the tiger jumps out of the bushes. And so your brain, what we now know, is your brain shunts activity away from these executive function centers. It, it makes it hard to exercise control, because you don’t want to overthink it. You don’t want to say, “Well, is that a tiger? What species of tiger? Is that a male or a female?” You, you, you want to shut that part of the brain off and just like, you know, fight or flight. [instrumental music]
00:00:58,920 — John Lanza
In this episode, I talk with Chuck Kalish. Chuck is the Director of Science for the Society for Research in Child Development, the SRCD. Chuck received his BA in Psychology from Swarthmore College and earned his Doctorate in Developmental Psychology at the University of Michigan, and before he joined the SRCD, he was a professor and past chair in the Ed Psych Department at the University of Wisconsin Madison. So Chuck is an expert in understanding how children develop, uh, what we might call commonsense beliefs, and how they come to understand the social norms that we take for granted. And my previous guest, Elizabeth Odors-White, worked with Chuck on some terrific research that informed my book, The Art of Allowance. And it was Elizabeth who introduced me to Chuck so that he could bring his considerable knowledge of child psychology and the young brain to help us all better understand how we can raise money-smart kids. There is really so much that we talk about in this episode, and though it’s dense, be patient. Um, I still feel like we only scratched the surface here, but we discussed the insidious effect of toxic stress, particularly on the poor. Uh, we talked about executive function and a recent study that has called into question the oft-cited marshmallow test. You will definitely want to listen to this. Like I said, we touched on quite a lot. So without further delay, here is Chuck Kalish. [instrumental music] I have on the line Chuck Kalish. Welcome, Chuck.
00:02:43,300 — Chuck Kalish
Hi.
00:02:44,520 — John Lanza
Well, I’m really excited, Chuck, to have you here on The Art of Allowance Podcast, and really because I’m gonna get to learn a lot today, and in turn, so will our listeners. And so that they kind of understand why I’m so excited about it, [laughs] I think it, uh, probably would be best for us to start with a little bit of your background. Maybe how you got into educational research about children, and, of course, children and money, um, so that our listeners know a little bit more about you.
00:03:13,820 — Chuck Kalish
Sure. Great. Thank you. Uh, it’s a pleasure to be here, and I’m really looking forward to, to this conversation. Um, well, I’ll start in grad school ’cause that’s, that’s back far enough. I was a, I studied developmental psychology in grad school. I was very interested in children’s cognitive development, how children learn, how they represent the world, how they sort of basically acquire what we call commonsense. Um, and so one of, I think, the really most interesting things about cognitive psychology is raising this question of, what is commonsense, right? We take it for granted. It’s, it’s commonsense.
00:03:50,280 — John Lanza
[laughs]
00:03:50,560 — Chuck Kalish
But how do you get it, right? And we tend to think of kids as not having a lot of commonsense, and so what, what is this stuff? How do we get it? How do you know if we have it? How can we help kids get it? All that, those kinds of questions, really, and, and that kind of, uh, uh, uh, framing that, uh, what we’re really interested in is what we as adults think of as commonsense. Uh, in that, you can maybe see how that would lead you down into thinking about money and finance and things. But the route that I took in that work maybe is slightly different th- than, than the immediate. I mean, it wasn’t immediately… In fact, for whatever reason, when people study the development of commonsense, they tend not to study thinking about money, finance, financial literacy.
00:04:36,560 — John Lanza
Mm-hmm.
00:04:36,860 — Chuck Kalish
Uh, it’s, it’s a weird historical reasons. But I was quite interested in children’s understanding of the social world, and how they understood why people interact with each other in the ways that they do. What, what we can think of as sort of the social norms governing our interactions with the world. How do kids come to understand the social norms, right? That, you know, when you’re on the playground, you can run and climb on stuff, but if you’re in the museum, you can’t run and climb on stuff, right? Those are-
00:05:00,560 — John Lanza
Sure
00:05:00,680 — Chuck Kalish
… norms that regulate the environment that they’re in. And they really, these norms dictate how we interact with peop- What, what’s an appropriate way of interacting? And one of the set of norms that is really interesting are norms around exchange, around markets, around finance, right? That, that is a, just an interesting way we interact with each other, is that we buy and sell, exchange, we engage in these market transactions with other people.
00:05:29,220 — John Lanza
Mm-hmm.
00:05:29,600 — Chuck Kalish
And again, this is just completely commonsensical for, for an adult. I know what I’m doing when I go to the store and I buy something. Right? It- it’s, it’s, it’s the air we breathe.
00:05:39,880 — John Lanza
Right. Sure.
00:05:41,320 — Chuck Kalish
But it’s a very weird thing from a kid’s experience. How does a child… How does that become commonsense to a kid? So that’s really how I got interested in this, in this area.
00:05:50,960 — John Lanza
Yeah. Particularly now it would seem, because the- you don’t, you very rarely have the physical medium of money being exchanged, right?
00:05:58,440 — Chuck Kalish
[laughs] Yeah. It’s even more mysterious, right? The fact there was very old research, uh, that, again, the, the, the research literature on…… on all of this i- is actually kind of spotty. A lot of it was done, um, in the 70s, uh, in… under a certain kind of, uh, theoretical framework. But one of the things that that work argues is that children see buying and selling as kind of a game. Uh, it’s like playing house, right? You have this script. “Oh, you go into the store and you take something off the shelf, and you give it to the guy at the counter. And then you give the guy some money, and then the guy gives you some money back. And then you say thank you, and then you go out.” And like that… it’s like a fun game that you play.
00:06:37,688 — John Lanza
Right.
00:06:37,818 — Chuck Kalish
And exactly why any of those elements occurs is, is just sort of arbitrary. It’s basically, you know, why do you, uh, uh, uh, uh, run to first base rather than third base in baseball? It’s just… Tha- that’s the game.
00:06:50,668 — John Lanza
[laughs]
00:06:51,718 — Chuck Kalish
A- a- an [laughs]… And you’re right, I think, that now, uh, parts of that transaction have become even more opaque to kids.
00:06:58,588 — John Lanza
You know, I think it’s the distilling down to the simple share and save and spend smart that makes it very accessible, but it’s once you… Once you get into these… To, to the details, the nitty-gritty, [laughs] it can get tough.
00:07:11,108 — Chuck Kalish
And here’s, here’s wha- how it… Here’s another way in which it’s really tough, is knowing how much of a decision is a monetary decision, right?
00:07:19,808 — John Lanza
Mm-hmm. Yeah.
00:07:20,408 — Chuck Kalish
Tha- that’s the hard part. Um, you know, if I want to go buy something, yeah, thinking about, “Is it worth it? Do I have enough money?” That, that plays a certain role in my decision. But you know what? For most of the monetary decisions I make in my life, I can afford this stuff, right?
00:07:37,848 — John Lanza
Yeah.
00:07:38,028 — Chuck Kalish
It’s, it’s not… I’m not doing a complex cost-benefit analysis. I’m buy… I’m, I’m making these decisions based on other sort of principles, but I have to know that every once in a while, I need to kind of step back and do something a little more strategic, a little more deliberate, a little more sorting out all of these different pieces of the decision. And, and oftentimes, it’s very useful to have recourse to a sort of perspective on the world that’s kind of purely financial-
00:08:10,388 — John Lanza
Mm-hmm
00:08:10,398 — Chuck Kalish
… this sort of gimlet out, dollars and cents, cost-benefit, what am I getting out of this kind of perspective on the world.
00:08:19,028 — John Lanza
Yeah.
00:08:19,928 — Chuck Kalish
And, and I think it’s th- the… The thrust of the, the work I’m interested in is to say that is part of life. It is no… by no means all of it, and it… And, and, and, and that is not the way we think about the world most of the time, and it’s certainly not the way kids think about the world most of the time, but it is an important ability. It’s kind of like the ability to know… uh, to do math. Every once in a while, you gotta have this… You gotta have this skill, and, and-
00:08:50,188 — John Lanza
Yeah
00:08:50,388 — Chuck Kalish
… you kinda want it to be part of your cognitive repertoire.
00:08:54,108 — John Lanza
But let’s, let’s jump back a little bit, um, to kind of begin at the beginning, um, and talk a little bit about executive function. Uh, just because I wanna kind of progress a little bit through the life cycle to the extent that we can, and discuss these building blocks of financial capability that your research was re- really helped to kind of inform what the Consumer Finance, uh, Protection Bureau, uh, o- has put together that is really useful information. Um, and I spoke a little bit about this in my chat with your colleague, Elizabeth Odgers-White, and she’s the one who connected us. But one of the things that she, you know… She’s on… really more on the finance side, and so I’m excited because your expertise is in this child psychology. You can bring us a lot of insight in that, so… insight to that. So executive function, something that I know from your research develops like a freight train in the young brain.
00:09:46,608 — Chuck Kalish
[laughs]
00:09:47,128 — John Lanza
So [laughs] can you tell us a little bit about what executive function is and why it’s important when it comes to raising money-smart kids?
00:09:55,328 — Chuck Kalish
Sure. So I think it actually is, is an example of that in that process I was describing, that
00:10:02,388 — Chuck Kalish
it’s being able to step back and, and think about… take a little perspective on what you’re doing. And that, that is generally the quality of executive function. It’s this executive, like, this sort of, “I’m in charge, I’m running the show. I’m, I’m gonna kind of, you know, stop the production lines and look over what’s going on and decide, are, are… is thing… are things going right.” And so that ability to sort of reflect on one’s thinking, the ability to, to step out of the moment and exercise some control. And generally now, people think of e- executive function as having a couple of different components, but, but, but the details of it get, you know, down a bit in the weeds. Um-
00:10:43,248 — John Lanza
Yeah.
00:10:43,908 — Chuck Kalish
But it’s really this, this ability to sort of
00:10:47,848 — Chuck Kalish
not just trust your gut, not just… not just do what’s easy, not just kind of, uh, uh, uh, uh, go along the way sort of things feel most natural and most easy, but really to, to, to, to, to pause and reflect.
00:11:01,888 — John Lanza
Yeah.
00:11:02,198 — Chuck Kalish
And I think that’s, uh, uh, uh… you know, th- th- that’s, that’s the core of executive function.
00:11:07,448 — John Lanza
Yeah. Can… Give me an example of how that might, um, manifest itself in, say, a, a four, or, you know, three or four-year-old.
00:11:16,918 — Chuck Kalish
Yeah.
00:11:16,948 — John Lanza
Or where would you start to see that?
00:11:18,848 — Chuck Kalish
Okay. Yeah. Well, the classic, the best… I mean, you all know the marshmallow test, right?
00:11:25,088 — John Lanza
Yeah. Yep.
00:11:25,318 — Chuck Kalish
I mean, that is the, the poster child for a certain form of executive function called inhibitory control, the ability to, “I really want this. I just wanna do this,” right? That’s the urge.
00:11:37,438 — John Lanza
[laughs]
00:11:38,768 — Chuck Kalish
And so the… You know, the paradigm which says, uh, “You can have one marshmallow now, or if you wait 15 minutes, you can have two marshmallows,” uh, the ability to delay gratification, to, to, to, to, to sort of inhibit an urge, uh, something that is very prepotent, something that’s very automatic, something that’s very attractive-
00:11:58,728 — John Lanza
Mm-hmm
00:11:58,938 — Chuck Kalish
… to be able to h- to, to kind of tamp that down, and, you know, say, “Is this really the right thing to do?”
00:12:06,928 — John Lanza
Yeah.
00:12:07,148 — Chuck Kalish
That, that is something that we…… very interested in the development in preschoolers because they struggle with that.
00:12:16,276 — John Lanza
Yeah.
00:12:16,616 — Chuck Kalish
Uh, what’s interesting, I mean, well, another way to think about that is, “Wow, they can do this,” right? An infant cannot do that.
00:12:25,175 — John Lanza
Yeah.
00:12:25,435 — Chuck Kalish
The- that- that- that something’s going on when the kids start to get, you know, preschool age that we really start to see this and frankly, as parents, start to demand it, right?
00:12:35,116 — John Lanza
Yeah, yep.
00:12:35,976 — Chuck Kalish
We start to expect it. Uh, it’s not easy. It’s- it’s- it’s, um, the value and there’s all sorts of
00:12:43,776 — Chuck Kalish
interesting questions about its development, but- but that’s sort of, I think why executive function is s- especially interesting around the early years is because we see it emerging and we start to use it, really now wanna… Can’t wait until we can reason with our kids.
00:13:00,236 — John Lanza
Uh, so much of what, um, I do and I talk about centers around starting early because I, you know, it’s- it’s the research really strongly suggests that, but give us a little bit of a sense of why it’s so important to start this conversation early.
00:13:13,545 — Chuck Kalish
Right. Wow. Well, uh, that- that- now you’ve raised a huge set of issues. Um, look, there’s a kind of critical period, uh, where you kind of shape these systems early in development and if something is going awry, then that’s gonna really set things that- that are hard later on. And- and-
00:13:34,435 — John Lanza
Mm-hmm
00:13:34,555 — Chuck Kalish
… and one example of this is the sort of toxic stress idea-
00:13:37,616 — John Lanza
Mm-hmm
00:13:37,856 — Chuck Kalish
… that, you know, if kids are growing up in very stressful circumstances where effectively the demands on their executive control are very high because the- the consequences are huge, right? Like, no, if you screw up, you’re dead.
00:13:52,756 — John Lanza
Yep, yep.
00:13:53,256 — Chuck Kalish
Um, and- and this constant sort of a pushing the- uh, the- the- the- the pedal to the metal and- and kind of revving up the system, that can have, we now know, have very long-term effects on the way a child’s brain is wired, the way their immune system is wired, the way their endocrine system is wired. The, um, the- the- the stress reactivity system seems to be susceptible to this kind of early experience and, um, can kind of… What- what
00:14:23,876 — Chuck Kalish
the thinking is, is that executive function works best under conditions of moderate stress. And so the idea is something like this. If you’re, um, going –
00:14:32,996 — John Lanza
Wait, uh, Chuck, hold on one s- I just want to… Can we unpack the toxic stress? ‘Cause I know we discussed that beforehand, but it was new to me.
00:14:41,766 — Chuck Kalish
Okay.
00:14:42,106 — John Lanza
And I think it would be helpful to tell, talk to people about it-
00:14:44,925 — Chuck Kalish
Sure
00:14:44,925 — John Lanza
… because it does tie, it does tend to tie into, um, you know, the economic situation.
00:14:51,156 — Chuck Kalish
Oh, very much.
00:14:51,795 — John Lanza
So yeah. So let’s just- just go back and talk a little bit more about toxic stress.
00:14:56,576 — Chuck Kalish
Okay.
00:14:57,055 — John Lanza
Yeah.
00:14:57,435 — Chuck Kalish
Um, to- so toxics, I mean, to make, to make that link clear-
00:15:01,076 — John Lanza
Yeah
00:15:01,224 — Chuck Kalish
… uh, many people talk about toxic stress as the way poverty gets under the skin.
00:15:05,476 — John Lanza
Mm-hmm.
00:15:06,136 — Chuck Kalish
So these are the ways that experiences of- of- of poverty, of- of neglect, of- of- of extreme circumstances, stress basically, um, can get under the skin, can- can- can really, uh- uh, change a person in a sort of fundamental, biological way. Uh, so again, the idea is that stress is actually healthy. Um, uh, uh, experiencing sort of arousal, resolving that, coming back to baseline, trains your body to learn how to deal with stress, how to get… How to me- how to mobilize resources when it needs it-
00:15:44,536 — John Lanza
Mm-hmm
00:15:44,776 — Chuck Kalish
… and then how to calm down when the stressful environment is over. ‘Cause stress is a, you know, an a- adaptive response. It really does a lot for us. The idea of toxic stress is when you never de-stress.
00:15:59,415 — John Lanza
Mm-hmm.
00:15:59,516 — Chuck Kalish
When- when you’re, either you’re facing stressors that are so intense or oftentimes the idea is so endemic, so, so chronic that you never really get a chance to demobilize the stress response system. And so your, it’s like your- your- your needle is pinned at- at- at, in the red zone-
00:16:18,996 — John Lanza
Yeah
00:16:19,136 — Chuck Kalish
… the whole time and so your body can’t calibrate. It doesn’t ever really learn how to stress and de-stress, and that’s considered toxic stress.
00:16:26,036 — John Lanza
So you’re kind of in that survival mode. Is that-
00:16:28,556 — Chuck Kalish
Yeah, and that’s exactly the way to think about it, is, is the stress response is this fight or flight, right? Uh, you know, you- you move the blood to where it needs to go so that you can run away from the tiger.
00:16:40,536 — John Lanza
Yeah.
00:16:40,876 — Chuck Kalish
Um, you know, thinking about the future is not a good thing to do when the tiger jumps out of the bushes.
00:16:48,195 — John Lanza
Yeah.
00:16:48,616 — Chuck Kalish
And so your brain… What we now know is your brain shunts activity away from these executive function centers. It- it makes it hard to exercise control because you don’t want to overthink it. You don’t want to say, “Well, is that a tiger? You know, what species of tiger?”
00:17:06,735 — John Lanza
Mm-hmm.
00:17:06,766 — Chuck Kalish
“Is that a male or a female?” You- you- you wanna shut that part of the brain off and just, like, you know, fight or flight.
00:17:14,636 — John Lanza
So I- I- I just, I have to ask this ’cause I- I’ve- I’ve talked with folks about this, but if, you know, if you’re in a situation where you are living under significant toc- toxic stress and you have a kid and, you know, I know the first thing on your mind [laughs] may not be teaching your kid money smarts.
00:17:32,676 — Chuck Kalish
No. [laughs]
00:17:33,136 — John Lanza
But, and- and so maybe it’s an irrelevant question. It’s possible that it is.
00:17:36,896 — Chuck Kalish
Mm-hmm.
00:17:36,985 — John Lanza
But I don’t think it is because I think, you know, if you, if you, someone can kind of get j- at least be, as- at least out of the survival mode for- for some brief period of time, what might be an effective way-
00:17:49,916 — Chuck Kalish
Yeah
00:17:50,166 — John Lanza
… to do that?
00:17:50,826 — Chuck Kalish
Yeah.
00:17:50,856 — John Lanza
Because I think a lot of what, you know, I talk about really is talking to parents who are, they’re no- they’re nowhere near that situation.
00:17:59,016 — Chuck Kalish
Well, parents are pretty stressed. [laughs]
00:18:01,485 — John Lanza
Yeah, yeah.
00:18:02,196 — Chuck Kalish
Talked about that.
00:18:02,386 — John Lanza
[laughs] Yeah, but- but not the toxic stress that you’re talking about.
00:18:04,406 — Chuck Kalish
Yeah. No, no, no, not the toxic stress.
00:18:05,116 –> — John Lanza
[laughs]
00:18:05,436 — Chuck Kalish
But, but to be fair, the opportunities we have to sit down and talk with our kids in a deliberate
00:18:12,176 — Chuck Kalish
way about the future.
00:18:13,616 — John Lanza
Yeah.
00:18:13,755 — Chuck Kalish
You know, come on.
00:18:14,336 — John Lanza
Yeah. Yeah, yeah. [laughs]
00:18:14,996 — Chuck Kalish
That’s- that’s not what happens at home.
00:18:17,116 — John Lanza
[laughs]
00:18:17,816 — Chuck Kalish
Um, this is really the…… is actually the second leg of that three-part, uh, uh, division or whatever you mentioned, that, that we talked about in the, in the report for CFPB.
00:18:29,212 — John Lanza
Yeah.
00:18:29,351 — Chuck Kalish
Just the financial habits and norms. And, and as a developmental psychologist, this is where I’m most interested.
00:18:35,372 — John Lanza
Yeah.
00:18:35,992 — Chuck Kalish
So the idea here is, is, is what I would suggest is, or what I would talk about, is this idea of kind of like a strength-based perspective, right?
00:18:46,672 — Chuck Kalish
People who are stressed, who, who are living i- in poverty, for, for whom financial resources are challenging, but really any of us have had to deal with, deal with that, develop strategies to cope with that.
00:18:59,032 — John Lanza
Yeah.
00:18:59,111 — Chuck Kalish
We, we survive. We figure out ways to make it work.
00:19:02,132 — John Lanza
Yeah.
00:19:02,331 — Chuck Kalish
Right? And those ways of making it work may often look very non-normative in the sense that they don’t look like what you would learn in business school. But they probably work for people’s circumstances. That, that’s kind of another message of developmental psychology, is that people are really good at adapting to the particular circumstances they’re in. And so by and large, people are going to have
00:19:27,612 — Chuck Kalish
resource management strategies, ways of dealing with scarcity, with, with investment, with, with consumption, that work for them.
00:19:36,652 — John Lanza
Yeah.
00:19:37,192 — Chuck Kalish
Even if they don’t all work all the time, a lot of what they do works. And so kind of, to kind of accentuate the positive view is like, you can communicate to your child, “Here’s the strategies that I do that work. Here’s how I get through the day. Here’s how I make it work. And you know what? I’m good at that. You can be good at that too.”
00:19:58,572 — John Lanza
Right. Right. And on a, like on a practical level though, um, just if you’re, if you’re in a situation where you are, you know, uh, in survival mode or kind of around the poverty line, but you want to make sure that your kids understand their, that, that, um, uh, the importance of making money, smart choices, the importance of, uh, distinguishing between… I mean, distinguishing between needs and wants is gonna be a part of your daily life-
00:20:24,822 — Chuck Kalish
Sure, absolutely
00:20:24,862 — John Lanza
… at that, at that situation, just like it is for anybody. Uh, but also like, for example, saving for goals. We haven’t really gotten into that, but would you… Do you think it would make sense for the recommendation to be, okay, well, if we’re gonna set up an allowance, and I’ll just make the assumption that anybody who’s listening here knows how the allowance is set up, it’s called The Art of Allowance. But in, instead saying, okay, well, okay, you can’t necessarily afford $6 per week for your six-year-old, but you could afford $1. Would that make sense? Or is the toxic stress so much that that is just gonna be short-circuited?
00:21:00,132 — Chuck Kalish
That, that, that, that’s a really interesting question. Um, here’s one way it’s playing out, is now people are thinking about how do we design anti-poverty programs.
00:21:10,192 — John Lanza
Mm-hmm.
00:21:10,952 — Chuck Kalish
Um, we have these, uh, work requirements and say, “We’re gonna give you welfare for whatever it is, eight months, and if you don’t get a job within those eight months, we’re cutting you off.”
00:21:21,591 — John Lanza
Yeah.
00:21:22,512 — Chuck Kalish
That is horrible for a person with toxic stress, with, with… ‘Cause that just makes them anxious, right? You just, you’ve just put this really important problem that they have to solve, and now they’re kind of focused on that. And so there’s actually kind of an argument that what you need to do is make things predictable, make things simple, uh, uh, eliminate consequences, eliminate stress. And so kind of taking decision-making away. Uh, uh, this is, again, a kind of a moral of this whole line of work, which is, it’s hard work making decisions. Making decisions is stressful. Making decisions is like running a marathon.
00:22:01,012 — John Lanza
Yeah.
00:22:01,192 — Chuck Kalish
You know, or exercising. Uh, so, okay, so that’s, there’s whole, that whole thing. Uh, I think what I would say about something like an allowance or what parents can do is, what we know is that people work on habit. Most of our life we run
00:22:17,792 — Chuck Kalish
not exercising a ton of executive function, but just kind of going based on habit, routine. This is what my parents always did. This is the way I’ve done it ever since I was a kid, right? And so you’re not, you’re not actually teaching kids about savings per se by having an allowance. And you’re certainly… Let’s be honest, you’re not really amassing a huge amount of money. The, the, the, the amounts of money are trivial that, that are involved.
00:22:45,132 — John Lanza
Mm-hmm.
00:22:45,831 — Chuck Kalish
You’re instilling these habits, you know. “Oh yeah, when I get some money, I kind of save. I don’t want to consume it all. I wanna save some back for something.” It’s like just that habit, that kind of basic part of common sense, right? Like that is some, for some people, that’s common sense. You, you, you don’t have to think about it. It’s not like you have to write down a budget. You just know, “Yeah, if I get some money, I don’t want to spend it all. I want to make sure that I have something for when I need it.” And what we can do to sort of instill that as a part of the habits of life of a kid is, I think, what, what, what we can do as parents really feasibly.
00:23:24,292 — John Lanza
Yeah. That, that, and that makes sense. And it’s interesting because part of the… You, you were touching on, on the, uh, these habits, these things that we do-
00:23:31,851 — Chuck Kalish
Mm-hmm
00:23:31,862 — John Lanza
… as parents. Like, “Oh, my parents did that.”
00:23:33,882 — Chuck Kalish
Yeah.
00:23:33,912 — John Lanza
That’s actually, I think, one of the problems with allowance, is that people tend to just say, “I’m gonna give an allowance,” without a why behind it because that’s what their parents did. And that’s where it, it all, it goes awry there. You have to have a reason behind it, and, uh, which I know you’re, o- obviously you’re-
00:23:50,562 — Chuck Kalish
For a reason-
00:23:51,072 — John Lanza
Yeah.
00:23:51,552 — Chuck Kalish
Yeah, definitely a reason behind it. But another way to think about it is to make it part of daily life.
00:23:57,351 — John Lanza
Yeah.
00:23:57,492 — Chuck Kalish
Right? If it’s just, you know, if you just sort of every few, every once, once a week tell a kid, “Okay, there’s 50 cents in your allowance.” Like, that’s completely abstract. That, that, that’s, that’s not… doesn’t affect their daily life.
00:24:11,052 — John Lanza
Right.
00:24:12,132 — Chuck Kalish
Um, but if kids participate in savings, in decisions, in the family process of making financial decisions-… for example, uh, one thing that we always did was have our kids help us decide where we’re gonna give charity, right?
00:24:30,088 — John Lanza
Mm-hmm.
00:24:30,138 — Chuck Kalish
That was something we did as a family. It involved them, it was real, and it was something that they could see was just part of the way their family interacts around money.
00:24:41,227 — John Lanza
Yeah.
00:24:41,808 — Chuck Kalish
And, and, and, and there’s a s- there’s a real… So, while it is absolutely true, and I totally agree with you that you want to explain why, we also know that there’s a huge virtue in just participating in activities you don’t really understand.
00:24:56,508 — John Lanza
Yeah.
00:24:57,048 — Chuck Kalish
Um, uh, even watching a parent do something like, I know people don’t balance checkbooks anymore, um-
00:25:02,967 — John Lanza
[laughs]
00:25:03,477 — Chuck Kalish
… a parent, you know, what, uh, des- uh, uh, uh, uh, comparison shopping at the supermarket.
00:25:10,487 — John Lanza
Yeah.
00:25:10,987 — Chuck Kalish
Right? You know, a, a f- a four-year-old, a young kid, isn’t really gonna understand what’s going on there, but they can actually start to get a lot out of just realizing that that’s a task, that’s wha- something that people do when they go to the grocery store. That’s the way you go to the grocery store, is you engage in this thing where my mom is comparing these two sizes and she’s trying to figure out which one to buy. Don’t know, have to understand at all, to really start to benefit from it.
00:25:39,848 — John Lanza
Well, you just… I’m so glad you brought this up because I wanted to ask you about the term emergent literacy. Speaking of things that… you know, participating in things that you don’t understand, that they don’t do understand. So, and, and I’ll just… My simplistic explanation about emergent literacy is that it’s just the, it’s the reason we read to our kids, knowing about this, it’s the reason we read to their kids, uh, to our kids when they’re younger, because we know that exposure to language provides the building blocks to later literacy. Reading and writing, right?
00:26:09,008 — Chuck Kalish
Mm-hmm. Mm-hmm.
00:26:09,608 — John Lanza
And I’m sure you know, there’s a similar term, emergent financial literacy.
00:26:13,178 — Chuck Kalish
Absolutely. Yeah.
00:26:14,158 — John Lanza
Yeah. So I want you to elaborate a little bit on-
00:26:16,768 — Chuck Kalish
Sure
00:26:16,908 — John Lanza
… kind of emergent literacy and how exposure to, a- emergent financial literacy and how exposure to money, language, and concepts early can affect, uh, kids. But the other one is, I just want to understand this dilemma that comes up, and that is, many people actively resist the idea of starting early because they want their-
00:26:35,137 — Chuck Kalish
Mm
00:26:35,137 — John Lanza
… “quote” kids to be kids.
00:26:37,687 — Chuck Kalish
Interesting.
00:26:37,728 — John Lanza
And, you know, is there any validity to this resi- to this resistance? And what, what am I not understanding here? [laughs]
00:26:46,148 — Chuck Kalish
Yeah. Come back to that one.
00:26:47,558 — John Lanza
Okay.
00:26:47,588 — Chuck Kalish
Let me tell you about the… talk about the emergent literacy-
00:26:49,728 — John Lanza
Okay. Good, good, good
00:26:49,798 — Chuck Kalish
… and then I definitely want to come back to this. Uh, we just wrote a commentary on a paper about… a really interesting paper in this, in this journal called Behavioral and Brain Sciences, which, uh, has these articles and then re- people comment on them. Uh, one of the top t- terms they talk about in this paper is called emporiophobia. People’s fear of markets. Markets are bad things.
00:27:09,898 — John Lanza
[laughs]
00:27:09,908 — Chuck Kalish
We want to protect people from it. So let me… Let’s come back to that in a second.
00:27:12,687 — John Lanza
Yep. Yep.
00:27:13,228 — Chuck Kalish
Um, but in terms of emergent literacy, there’s, there’s a couple of ways of thinking about it. The, um… One way to think about it is that there are these sort of pre-reading skills, these pre-financial literacy skills you might think of, that, um, are not, uh, uh, what we tend to focus on when we think about the behavior, you know, the activity. ‘Cause almost ba- again, because we take for granted the, the, the earlier ones. And so with pre-reading, a great example… This is… I don’t usually have that many examples from my kids’ lives-
00:27:47,028 — John Lanza
[laughs]
00:27:47,038 — Chuck Kalish
… but I do have this really nice one example for, for pre-reading.
00:27:50,548 — John Lanza
Yeah.
00:27:51,338 — Chuck Kalish
Um, so the idea of pre-reading is… one of the ways of thinking about it is, how do books work? And so we were reading a book with my daughter, and it’s a, it’s a Winnie the Pooh book.
00:28:00,128 — John Lanza
Mm-hmm.
00:28:00,528 — Chuck Kalish
And we’re… you know, had the book open, on the laps, we’re doing this thing, and my daughter points to the book and says, “There are two Eeyores.” “What do you mean? There’s-“
00:28:09,498 — John Lanza
[laughs]
00:28:09,498 — Chuck Kalish
“… there’s only one Eeyore.” “No, there’s two Eeyores.” So we have the book open to a f- to a facing page.
00:28:15,528 — John Lanza
Yeah.
00:28:15,648 — Chuck Kalish
And Eeyore’s on one side of the page-
00:28:17,128 — John Lanza
[laughs]
00:28:17,137 — Chuck Kalish
… and on the other side of the page. And she looks at that and she goes, “There’s two Eeyores.”
00:28:20,768 — John Lanza
[laughs]
00:28:21,447 — Chuck Kalish
I know the way books work is each page in a picture book is a s- is often a separate scene-
00:28:27,798 — John Lanza
Right
00:28:27,798 — Chuck Kalish
… in a book, arranged chronologically.
00:28:30,207 — John Lanza
Yep.
00:28:31,348 — Chuck Kalish
No one tells you that. You don’t go to school where they sit down and say, “Look, kids, here’s how books work. The pages of a book are not necessarily all happening at the same time.”
00:28:41,088 — John Lanza
Mm-hmm.
00:28:41,848 — Chuck Kalish
That’s pre- that’s emergent literacy.
00:28:43,628 — John Lanza
Yeah.
00:28:43,707 — Chuck Kalish
Learning how books work.
00:28:44,928 — John Lanza
Yep.
00:28:45,748 — Chuck Kalish
That’s the kind of thing you get, uh, through engaging in reading with parents, through, through, through experiences with books.
00:28:53,467 — John Lanza
Yeah.
00:28:53,707 — Chuck Kalish
Same sort of things. There’s like basic financial concepts that you just get through these habits. Um, look, the idea that when you spend money, you don’t have it anymore.
00:29:03,108 — John Lanza
Mm-hmm.
00:29:03,447 — Chuck Kalish
Right? You know? Uh, like that’s common sense. But you know what? When I tell you a secret, I still know the secret.
00:29:12,187 — John Lanza
[laughs]
00:29:12,648 — Chuck Kalish
When I… You know, there’s lots of things I can share-
00:29:15,467 — John Lanza
That’s a great example
00:29:16,428 — Chuck Kalish
… that I just keep.
00:29:16,487 — John Lanza
Right. Right.
00:29:17,568 — Chuck Kalish
Like, ha- you got to, you’ve just got to practice these things. And again, it’s this, this… You know, things that we take as common sense and obvious are not common sense and obvious for kids. They, they get them largely through experience, through participation-
00:29:31,048 — John Lanza
Yeah
00:29:31,058 — Chuck Kalish
… through engagement. Um, the other kind of piece of this is this, um, uh, uh, engage… This, this sort of participation without understanding. Um, uh, uh, oftentimes this is held up… An example of this is the apprenticeship model of learning. And that really
00:29:52,128 — Chuck Kalish
most of our learning and our… What we, what we as a species are good at is learning through something like an apprenticeship. Learning by doing, learning by participating.
00:30:01,548 — John Lanza
Sure.
00:30:01,967 — Chuck Kalish
The way you learn to make shoes as an apprentice is you sit down with the shoemaker and you do a piece of it while the shoemaker does the rest of it, right?
00:30:09,717 — John Lanza
Yeah.
00:30:09,798 — Chuck Kalish
Now, you know, pound the leather. You pound the leather for a year, and then you… Now, now you cut the leather and you cu- but you’re engaged in this process of shoe making.
00:30:18,957 — John Lanza
Yeah.
00:30:18,967 — Chuck Kalish
You’re working with this guy making the shoes, and you acquire the skill of shoe making from the shoemaker without a lot of direct explicit instruction.
00:30:27,728 — John Lanza
Yeah. You’re like, uh, Mr. Miyagi.
00:30:29,696 — Chuck Kalish
… you know?
00:30:29,976 — John Lanza
Exactly. I mean, that-
00:30:30,556 — Chuck Kalish
Karate Kid, wax on, wax off. Karate Kid, yeah, that’s not… That. And, and we now know, I think it’s fair to say we know, that’s what humans are good at.
00:30:39,276 — John Lanza
Yeah.
00:30:39,446 — Chuck Kalish
That’s, that’s when we learn successfully.
00:30:41,796 — John Lanza
Hmm.
00:30:42,916 — Chuck Kalish
Uh, the trouble with that, the, the real dilemma, the, the, the nut that, that, that educate, modern education is trying to crack, is that, that learning is very specific. The, the shoemaker apprentice learns to make shoes.
00:30:58,156 — John Lanza
Yeah.
00:30:58,256 — Chuck Kalish
They learn to make a specific kind of shoe. They don’t learn the theory of shoe-making. They don’t learn the, the, the, the, the logic, the, the, the physics, the chemistry, the fashion, the, the marketing of shoes. Right? You, you don’t learn this theory, and so your knowledge is very tied to the context within which it’s learned. That is the, I think, the real problem with financial literacy, is that we raise kids in an environment, and then they go out and practice their financial literacy skills when they’re adults in a very different environment. My kids are not working for a living. Uh, your experience as a child is not gonna prepare you for that because
00:31:44,396 — Chuck Kalish
the whole reason, [laughs] you know, we prot- we protect kids from this.
00:31:48,256 — John Lanza
Yeah. No, it’s a, you know, it’s a really good point, and it’s, uh, it’s a reason why I’m sure you’re familiar with these Reality Fairs.
00:31:55,956 — Chuck Kalish
Mm-hmm.
00:31:56,456 — John Lanza
Um-
00:31:56,766 — Chuck Kalish
Mm, yeah
00:31:56,766 — John Lanza
… so, you know, people-
00:31:58,446 — Chuck Kalish
Nice
00:31:58,446 — John Lanza
… yeah, those, those really… I’ve participated in some just as an adult, just to see how, what they’re like, and th- they’re, they’re very informative. And in fact, just today, I was, uh, emailing a, a friend of mine who does these Reality Fairs to say-
00:32:11,696 — Chuck Kalish
Mm-hmm
00:32:11,706 — John Lanza
… “I would love to bring that to my kids,” because I was thinking this exact thing.
00:32:14,536 — Chuck Kalish
Yeah.
00:32:14,556 — John Lanza
I was looking at my insurance bill and I’m thinking-
00:32:17,136 — Chuck Kalish
[clears throat]
00:32:17,326 — John Lanza
… you know, at some point, I really, I need to sit down and talk with my kids about this, because they’re gonna get one of these, and it’s gonna… I mean, it really is gonna be a few-
00:32:27,056 — Chuck Kalish
Yeah.
00:32:27,236 — John Lanza
I remember my first insurance bill.
00:32:28,836 — Chuck Kalish
Yeah.
00:32:28,986 — John Lanza
I’m thinking to myself, “Okay, sure.”
00:32:31,266 — Chuck Kalish
[laughs]
00:32:31,266 — John Lanza
“Yeah, I guess I have to do it.” And, and I got some, you know-
00:32:33,656 — Chuck Kalish
[laughs]
00:32:34,386 — John Lanza
… some cut-
00:32:34,716 — Chuck Kalish
That’s a lot of money. 100%
00:32:35,946 — John Lanza
Yeah. [laughs]
00:32:36,416 — Chuck Kalish
Yeah.
00:32:36,636 — John Lanza
So you go to the cut rate car insurance company-
00:32:39,256 — Chuck Kalish
Yeah. Yeah
00:32:39,916 — John Lanza
… and then, then, and then if you have an accident, you, you realize you’re really not covered.
00:32:43,896 — Chuck Kalish
Then, then it’s not.
00:32:44,316 — John Lanza
Yeah. So…
00:32:44,626 — Chuck Kalish
Well, but this is… And so this is… So now, now you have raised, what? Like, what should we tell the kid? What, what is it that we want a child to take away? And here’s what I would… Here’s one thing you could imagine, about how big is it. Right? Uh, is it, is it a $1,000 a month? Is it $10 a month? You know, like ballpark, order of magnitude, proportion of your annual income, proportion of your rent, right? Some qualitative sense about, “Well, that’s about what’s right for this.” You know, “How much should I be paying for that?” Um, and again, that’s, that’s not… I mean, you can, you can go online and find some sort of formal, you know, mo- uh, uh, theoretical analysis that tells you what proportion of your income your rent should be or something like that. But really, we have a gut sense of that.
00:33:38,836 — John Lanza
Yeah.
00:33:38,936 — Chuck Kalish
We, we have a sense, “Whoa, I can afford that.” Or, “Crap, if I’m, if I have to do that, I better cut back.”
00:33:45,056 — John Lanza
Yeah.
00:33:45,376 — Chuck Kalish
And, and I think that’s what we can give to kids through these experiences growing up.
00:33:49,956 — John Lanza
Yeah.
00:33:49,985 — Chuck Kalish
It’s just this sense about, [inhales sharply] about, about how big… Uh, you know, is this something I can ignore?
00:33:56,196 — John Lanza
Yeah.
00:33:56,696 — Chuck Kalish
Well, in fact, yeah.
00:33:58,716 — John Lanza
Well, it’s… You know, that’s, that’s just an expansion of the idea that, um, you know, the three core money smart skills that I talk a lot about-
00:34:05,956 — Chuck Kalish
Mm-hmm
00:34:06,046 — John Lanza
… on this podcast are, are, one of them is making smart money choices.
00:34:10,855 — Chuck Kalish
Mm-hmm.
00:34:11,176 — John Lanza
And I think e- this gets to your initial, one of the initial points you made, that a lot of these choices that have to do with fi- finance-
00:34:20,275 — Chuck Kalish
Mm-hmm
00:34:20,376 — John Lanza
… are not really money choices.
00:34:22,136 — Chuck Kalish
No, that’s right. That’s right.
00:34:22,616 — John Lanza
Um, they, they really can be, they’re either values choices-
00:34:25,476 — Chuck Kalish
That’s right. That’s right
00:34:25,485 — John Lanza
… I mean, one example, I live in Los Angeles, so-
00:34:28,355 — Chuck Kalish
Mm-hmm
00:34:28,545 — John Lanza
… the ballpark number that you’d be paying if you’re, if my, if my daughters decide to live here and rent, you know, that number is gonna be a, that percentage is gonna be a heck of a lot higher-
00:34:38,516 — Chuck Kalish
Yup. Yup
00:34:39,036 — John Lanza
… um, uh, than it would be if they lived, for example, in, you know, somewhere in Wisconsin, right? And so-
00:34:44,596 — Chuck Kalish
Yup.
00:34:44,705 — John Lanza
And, and, but tho- those are, that’s an important choice to make, because-
00:34:48,045 — Chuck Kalish
Mm-hmm
00:34:48,185 — John Lanza
… it may be that… I mean, especially, you know, if you’re in your 20s, like, go try it. [laughs] Go see what else is out there.
00:34:55,866 — Chuck Kalish
Right.
00:34:55,916 — John Lanza
Because you may go somewhere and realize, “Okay, it’s, that is not worth it to me.” Or you may realize, “That is worth it to me.” Yeah.
00:35:02,896 — Chuck Kalish
Oh, and, and, and how could you possibly make that choice on a, on a proper financial basis? Like-
00:35:09,636 — John Lanza
[laughs]
00:35:09,866 — Chuck Kalish
… what, what does a cost-benefit analysis-
00:35:11,516 — John Lanza
Right
00:35:11,586 — Chuck Kalish
… of that look like? It, it’s insane. It’s impossible.
00:35:13,756 — John Lanza
Yeah. Yeah.
00:35:13,916 — Chuck Kalish
Right? No, no, nobody does it. We, if, if that’s what money sm- if, if being good at financial, if being financially literate involved an explicit cost-benefit analysis, then, then we’re done. We know it’s impossible. What we, what we know from all sorts of work, and, uh, uh, unfortunately, we know this most sort of poignantly in the, in the political realm, is people tend to do what other people like them do. Right? The way I make a choice is I look around and say, “Well, what do other people like me do?” What, what, “What do my family do,” or, “What does my peer group do?” Right? What, what seems normal? And so, what I’m trying to do as a adult is kinda not think about it a s- much as I can. And so if it just seems like everyone’s doing this, it’s probably the right thing to do.
00:36:04,216 — John Lanza
Yeah.
00:36:05,256 — Chuck Kalish
Uh, if you’re in a good context, if, for example, you were brought up in a family that managed money well, that’s gonna, that’s gonna lead you in, in a good direction.
00:36:15,616 — John Lanza
Yeah.
00:36:16,056 — Chuck Kalish
If you’re in an, in a, in a less positive environment, you’re gonna have to work really hard to, to sort of rein in what, what seems natural to you.
00:36:26,236 — John Lanza
Yeah.
00:36:26,596 — Chuck Kalish
And, and, and this is, uh, an, a, another part of executive function actually, which is basically conflict detection…. so knowing when you have to stop and think, right? Again, the- the- the- the model here is that you can’t live your life as a mathematician, you know, or as a logician, kind of going through the steps. But you want to know when you need to turn on that part of your brain, when you need to- to- to exercise that kind of executive control and, and stop and say, “Well, just because this seems right, is this really right?” That there’s a some co- some problem, some conflict. And, and that’s another thing I think that, that is useful to teach kids is, like, kind of where d- where are those touch points? Where are those points where, where you’re really out of your depth, right?
00:37:15,511 — John Lanza
Yeah.
00:37:15,692 — Chuck Kalish
So, you know, applying for a mortgage. Nobody thinks, “Oh, yeah, I know how to apply for a mortgage. I’ve done this a thousand times. All my friends do it.”
00:37:22,721 — John Lanza
[laughs]
00:37:22,721 — Chuck Kalish
“I saw my parents do it a bunch of times. We did…” Every, every weekend we would go to apply for a mortgage.
00:37:26,892 — John Lanza
Right.
00:37:27,071 — Chuck Kalish
You know that applying for a mortgage is a really weird thing you do that you don’t know how to do.
00:37:31,772 — John Lanza
Yeah, yeah.
00:37:32,112 — Chuck Kalish
And that’s where you’re going to engage this last part of the, the triad that we talked about, which are these sort of financial knowledge, decision-making, kind of the, the factual know- stuff you learn in school. The, the stuff that you may have to go back, “Oh, I know, I know I looked at a website about this once. Let me go back and see if I can find that,” right? That’s-
00:37:49,612 — John Lanza
Yeah
00:37:49,812 — Chuck Kalish
… that, but knowing when you need to do that is a really important skill.
00:37:54,071 — John Lanza
Well, that, uh, uh, yeah, definitely. And I think that point you made about when you kind of get out into the world and if you have not had the proper financial socialization-
00:38:04,172 — Chuck Kalish
Mm-hmm
00:38:04,221 — John Lanza
… I guess that might be in-
00:38:05,491 — Chuck Kalish
Yeah
00:38:05,542 — John Lanza
… within that term.
00:38:06,142 — Chuck Kalish
Absolutely, absolutely.
00:38:06,991 — John Lanza
Then, you know, th- this really gets, this really speaks to, I think, where this, where we kind of initiated this conversation was this-
00:38:14,692 — Chuck Kalish
Mm-hmm
00:38:14,702 — John Lanza
… this idea that, you know, starting early and starting early-
00:38:19,112 — Chuck Kalish
Yeah
00:38:19,122 — John Lanza
… you know-
00:38:19,281 — Chuck Kalish
Yeah
00:38:19,281 — John Lanza
… and I think one of the difficulties that parents have with the starting early is their own money issues. So those-
00:38:25,491 — Chuck Kalish
Yes
00:38:25,801 — John Lanza
… they can be their own singular money issues. They can also-
00:38:28,261 — Chuck Kalish
Yes
00:38:28,261 — John Lanza
… it can also, and you’re talking about conflict, conflict between the two partners about-
00:38:34,462 — Chuck Kalish
That’s back on this, uh, shielding kids from the market, and, you know, we want to let kids be kids. And-
00:38:39,212 — John Lanza
Yeah
00:38:39,682 — Chuck Kalish
… there’s this feeling like money… Eh, there’s a lot of feelings about money.
00:38:43,412 — John Lanza
Yeah.
00:38:43,591 — Chuck Kalish
I don’t need to tell you. Money is dirty. Money is hard. Money is evil. Money makes conflict. Money is cruel. Money is, is, is, is coarse, is, is amoral, is… You know, like, the- there’s a lot of, uh, uh, uh, uh, baggage-
00:38:59,812 — John Lanza
Yeah
00:38:59,932 — Chuck Kalish
… around money. Money is adult, right? Money is something that is really about the way adults interact with the world. Um,
00:39:09,892 — Chuck Kalish
and so all of those things, both because people feel anxious about it, for all the reasons, and they feel like it’s inappropriate for kids, makes it a bit of a taboo subject. Um-
00:39:21,991 — John Lanza
Yeah
00:39:22,712 — Chuck Kalish
… it’s kind of like, um, uh, uh… Well, there’s lots… Well, there’s lots of things going. One I imagine is we have this, this image, or many people have this image that kids are selfish, right? Kids are greedy. Kids are, are egotists. They just want what they want, and they don’t care about other people. And they’re these-
00:39:41,591 — John Lanza
Yeah
00:39:41,682 — Chuck Kalish
… little, you know, like-
00:39:43,281 — John Lanza
They’re like honey badgers
00:39:44,591 — Chuck Kalish
[laughs] Yeah, little honey badgers.
00:39:44,652 — John Lanza
Just little honey badgers. [laughs]
00:39:46,312 — Chuck Kalish
And what we need to do is teach them to be more considerate.
00:39:48,971 — John Lanza
Yeah, yeah.
00:39:49,452 — Chuck Kalish
And so we don’t want them thinking about, “Me, mine, what can I get?” You know, which is what, what money conjures up. The idea that
00:39:57,372 — Chuck Kalish
I only care how much I can get. I want my money, and I don’t want to spend it on something that’s not worth it because it’s all about me, and I don’t care about you. And, and so there’s this kind of like a, a, a, a, we associate money with greediness. We associate being greedy with being childish. We want to socialize kids out of that by not introducing them to this world of greed and money and…
00:40:22,232 — Chuck Kalish
There’s pros and cons to it, but, but, but, so we have these associations with, with money that can lead us to, um, uh, uh, keep kids away from it and, and to be anxious about our own money. So I often, I really thought, and when I was kind of… The message I most wanted to give in, in this work with the CFPB and the financial literacy was, “Let’s think about resource management instead,” because that removes a ton of the baggage. We all manage resources all the time.
00:40:52,991 — John Lanza
Yep.
00:40:53,392 — Chuck Kalish
Kids manage resources. We, we may feel we’re not good at managing money, but most of us feel like we’re good at managing certain kinds of resources, right? Uh, I can make… I can really stretch food. I know how to buy food and make healthy dinners and not waste food, right? That is as complex and valid a form of resource management as managing your money is, right?
00:41:20,531 — John Lanza
Mm-hmm.
00:41:20,801 — Chuck Kalish
It’s the exact same principles, uh, are going to apply there. And so because money has this association with the market, with, with, uh, uh… Another way to think about it is money is the way we interact with strangers. Um, if you’re my friend and I want something from you, I don’t pay you. Uh, we, we have other ways of negotiating those arrangements. It’s when I need something from a stranger that I pay them. So money, strangers. Uh, and so, so, so thinking about res- thinking… Reframing this problem as one of resource management I think will allow us to think about some of the basic common sense insights, uh, skills that, uh, we are really hoping to develop in kids.
00:42:03,991 — John Lanza
Yeah, I like that. I, uh, uh, and I, I hadn’t really thought about that and the, the, the resource management makes a lot of sense, and, uh, especially giving voice to the choices that you’re making that are outside of the, the transactions. And it also, the other thing that this reminds me of is the… In, in Daniel Kahneman’s work where he talks about, you know, the, the, you know, the main thesis of his book, Thinking Fast and Slow, s- Thinking Fast and Slow, is really talking about how we just, we feel the pain of a loss much more-
00:42:35,312 — Chuck Kalish
[clears throat] Yeah
00:42:35,322 — John Lanza
… than we feel the, the, the euphoria of a gain. And I think, I think, uh, that’s, that’s probably what is also, um…… a, it’s something that keeps parents from talking to their kids ’cause they start to have these conversations and they realize… ‘Cause I’ve had the same feeling where I feel, you feel like a fraud-
00:42:54,484 — Chuck Kalish
Yeah. Yeah
00:42:54,494 — John Lanza
… when you’re talking to them, you know, even someone who’s put a lot of thought into this.
00:42:58,834 — Chuck Kalish
Yeah.
00:42:58,844 — John Lanza
But it, but you just have to overcome that. I mean, ju- the fact that you’re talking to your kid about making money-smart choices, doesn’t matter that you lost money on some real estate deal-
00:43:07,824 — Chuck Kalish
Yeah. That’s right
00:43:07,834 — John Lanza
… or that you lost money on an investment. You feel that pain, and that’s all right.
00:43:12,024 — Chuck Kalish
Oh, and, and again, you’ve, you’ve engaged your child in, in your thinking process about what you went through with this. It’s like, “Oh, this is something that people do.”
00:43:19,984 — John Lanza
Yeah.
00:43:20,224 — Chuck Kalish
People, whatever the experience is, right, by talking about it with your kid, you’re kind of replaying it with them. Y- maybe they weren’t there, right? I mean, typically, they’re, they’re not there-
00:43:29,134 — John Lanza
Right
00:43:29,134 — Chuck Kalish
… when a lot of these fi- But, by telling, talking about it, you, you bring them in, you, you, and get, allow them to participate, and kind of, you know, step them through it. And they’re gonna get… They’re not all gonna… They’re not gonna clearly get what you get out of it, but they’re gonna get something out of it.
00:43:46,683 — John Lanza
Yeah.
00:43:46,784 — Chuck Kalish
And, and the process of being involved in that thinking, in that situation, it builds. And it really lays a foundation so that when they’re in it, they can think, “Oh, yeah, I know my, my dad was in like, something like this and, you know-“
00:44:00,894 — John Lanza
[laughs]
00:44:01,524 — Chuck Kalish
“… he was a really good guy and he did these things.” Whatever it is.
00:44:05,324 — John Lanza
Yeah.
00:44:05,704 — Chuck Kalish
So, yeah, so that, that’s, again the, uh, the instincts are very, you know, the, these kind of loss aversion, the, the losses loom larger than gain.
00:44:16,264 — John Lanza
Yeah.
00:44:16,524 — Chuck Kalish
You know, uh, uh, one idea is we wanna get rid of those things. We wanna try to overcome them, you know, erase them from our minds.
00:44:23,244 — John Lanza
[laughs]
00:44:23,484 — Chuck Kalish
Uh, another is we wanna learn to overcome them, like, uh, uh, learn when that happen. Like that, you know that happens, to recognize when you’re in a situation where maybe what you’re doing is you’re responding because of loss aversion, and maybe you should rethink it. Maybe that’s what we, you know, sort of recognize these things, see, you know, realize where they come up, right? So what you could have told your child in this money conversation is, “This is a time when I was driven by my fear of loss.”
00:44:51,924 — John Lanza
Hmm. Yeah.
00:44:52,384 — Chuck Kalish
And you kind of model this idea of loss aversion for them.
00:44:55,464 — John Lanza
Yeah.
00:44:55,673 — Chuck Kalish
So then when they s- hit another situation like that, “Oh, yeah, that’s like this time.”
00:45:00,564 — John Lanza
Yeah.
00:45:00,824 — Chuck Kalish
So… Yeah.
00:45:01,744 — John Lanza
That, that reminds me. I remember reading, um, I think it was a Wall Street Journal article, but they said, you know, you really wanna give voice to the financial decisions you’re making ’cause you’ll say, you know, uh, because you will… Say you have bought, just bought a car recently.
00:45:15,904 — Chuck Kalish
Mm-hmm.
00:45:16,163 — John Lanza
And, and then, and then you tell your kid that you’re not taking them out for ice cream.
00:45:20,004 — Chuck Kalish
[laughs]
00:45:20,184 — John Lanza
Um, obviously, you wouldn’t want to say you can’t afford it, but you, you, you, you-
00:45:24,174 — Chuck Kalish
Yeah, yeah, yeah
00:45:24,374 — John Lanza
… you certainly could take them out.
00:45:26,014 — Chuck Kalish
Oh, yeah, good. Absolutely.
00:45:26,464 — John Lanza
But they’re separate things, and, and it was a, uh, it’s important for them to see, the reason I bring up the car is that it’s worth talking to them to say, “Okay, yes, I, I bought a, whatever it is, $25,000 car, but I decided not to buy a $40,000 car,” or, “I bought a $20,000 used car rather than a $35,000 new car.” Like giving voice to these invisible decisions for them.
00:45:48,524 — Chuck Kalish
Yeah.
00:45:49,024 — John Lanza
Yeah.
00:45:49,224 — Chuck Kalish
And that they can then, “Oh, I get it,” you know?
00:45:52,784 — John Lanza
Yeah.
00:45:53,163 — Chuck Kalish
When people buy expensive stuff, they kind of think about how expensive is too expensive.
00:45:58,584 — John Lanza
[laughs] Right.
00:45:59,404 — Chuck Kalish
You know? Right? That’s what you’re doing here. J- it’s not like you’re saying, “Never buy anything expensive.” That… You can’t do that.
00:46:05,544 — John Lanza
Yeah.
00:46:05,724 — Chuck Kalish
It’s not like you’re saying, “Oh, crap, it’s just going to be a ton of money, so whatever. It’s just a ton of money and it, you know, I’m j- I’m gonna just pay what I have to pay ’cause it’s expensive.”
00:46:14,203 — John Lanza
Yeah.
00:46:14,284 — Chuck Kalish
No, you’re not telling them that either. You’re like, “When you are faced with something where you have to do something expensive, try to think about how expensive is too expensive.”
00:46:24,784 — John Lanza
Yeah.
00:46:25,084 — Chuck Kalish
That… Boy, that’s a great lesson.
00:46:27,504 — John Lanza
Mm-hmm.
00:46:27,834 — Chuck Kalish
You know, that’s what you get out of it. If that’s, that’s, that’s, that’s something that a, a kid could get out of this kind of story. That’s… You know, and if you, if you kind of develop that kind of habit of thinking about this, uh, uh, sort of a heuristic, a sort of a, a rule of thumb that, “You know, I know what people do when, when they’re in this situation is they think about this.” Or they think about something like, “Well, if I do this, what, what will I have to change about my life for the next year or so to make it possible?”
00:46:55,784 — John Lanza
[laughs] Right.
00:46:55,794 — Chuck Kalish
Oh, I’ll have to, I’ll have to give up ice cream.
00:46:57,804 — John Lanza
Yeah.
00:46:57,924 — Chuck Kalish
I have to think about something that I… There’s, I have to think about… And if you, i- i- all, all we can do is try to get those things to be habits in our kids.
00:47:07,023 — John Lanza
Yeah. Uh, definitely. Um, I, I wanted to just go back to one thing, ’cause this comes up a lot when I’m talking to parents, and that is that when people have the different values, um, when it comes to money, so two partners that have different values. And, I, and, and I’ve, you know, there was a recent money conference and everybody just says, “Oh, get on the same page.”
00:47:27,163 — Chuck Kalish
[laughs]
00:47:27,494 — John Lanza
And to me, that as a cr- that just, that, that kind of co- yeah, I, that, that’s a cop out. I don’t, I don’t, I don’t think that is really going to work. So, with thinking that that kind of rings hollow, h- do you have any kind of… I mean, and I, I know, I know you’re not a money coach. You’re a money re-
00:47:42,214 — Chuck Kalish
[laughs]
00:47:42,214 — John Lanza
… you’re, you’re a child psychology researcher.
00:47:44,244 — Chuck Kalish
Far from it.
00:47:44,854 — John Lanza
But [laughs] but do you have any thoughts on how parents might practically deal with these money conflicts?
00:47:50,404 — Chuck Kalish
That’s interesting.
00:47:51,314 — John Lanza
Yeah.
00:47:51,344 — Chuck Kalish
Well, I mean, I imagine that… One thing I would imagine is, is this, is this a real, sort of universal disagreement? Like, a difference in style? Or is this about disagreement about a particular case, right? So I might think that I really like eating out. I, I enjoy going to restaurants. And, and you know what? That’s an expense that I’m happy to have. And, and also I think it’s fine to spend a lot of money on a restaurant. But, you know, clothes I don’t care about. Uh, I, you can imagine my partner being the, the other way.
00:48:30,663 — John Lanza
Yeah.
00:48:31,184 — Chuck Kalish
Uh, that’s not a dif- disagreement about the value of money or about spending. It, it’s just a disagreement about what’s worth spending money on.
00:48:40,524 — John Lanza
Yeah.
00:48:40,663 — Chuck Kalish
So, you know, there’s that. Uh, I think there’s
00:48:45,384 — Chuck Kalish
really probably…So one thing that people are quite interested in are, like, personality difference about time preferences, right? Um, you know, uh, your, “Your discount rate.” And, you know, people with diff- diff- discount rates are gonna behave very differently. And so if I’m a, you know, live for today kind of person, and my spouse is a save for a rainy day kind of person, that’s gonna per- that’s gonna pervade a lot of things that we do.
00:49:13,204 — John Lanza
Mm-hmm.
00:49:14,324 — Chuck Kalish
Now-
00:49:15,404 — John Lanza
I’m not, uh, I’m not-
00:49:16,404 — Chuck Kalish
Go ahead
00:49:16,413 — John Lanza
… understanding wha- a discount rate. What… I’m not following.
00:49:18,614 — Chuck Kalish
Oh, sorry.
00:49:19,163 — John Lanza
Yeah.
00:49:19,384 — Chuck Kalish
So this is like a… Yeah, tha- that… I’ve thrown in some jargon, man.
00:49:22,424 — John Lanza
[laughs]
00:49:22,944 — Chuck Kalish
Just to prove my cred.
00:49:24,204 — John Lanza
[laughs]
00:49:24,644 — Chuck Kalish
Uh, this is just, like, uh, how much is a dollar worth to you today versus a dollar tomorrow?
00:49:29,484 — John Lanza
Got it. Okay.
00:49:29,844 — Chuck Kalish
Right? The, the, the marshmallow task is all about your discount rate.
00:49:32,744 — John Lanza
Yep.
00:49:33,284 — Chuck Kalish
Um, and so some people say, uh, you know, “Life is uncertain. I’m gonna spend the dollar no- I want the dollar now.”
00:49:41,244 — John Lanza
Yep.
00:49:41,864 — Chuck Kalish
Other person says, “Oh, no way. You know, I can wait. I’d much rather have $2 two weeks from now because then I’ll have $2.” And so this is how much the time value of money kind of stuff.
00:49:52,683 — John Lanza
Yep, sure.
00:49:53,884 — Chuck Kalish
Um, my intuition, and again, you know, if… presumably if you’re partners you at least have some motive, some incentive to try to work it out, but-
00:50:02,874 — John Lanza
[laughs] Right
00:50:03,714 — Chuck Kalish
… is, is nobody thinks the other person’s unreasonable, they just recognize that that’s a different prefer- like, I agree that there is some value in saving, I just happen to think that I want to spend a little more than I want to save.
00:50:21,404 — John Lanza
Right. Right.
00:50:22,064 — Chuck Kalish
And you agree that you shouldn’t save everything for a rainy day, you should enjoy what you have now, it’s just the exact balance. And I think if you… you can say, “We agree on the principle.” The principle is you spend some and you save some. Where the de- you know, the devil is in the details, but, but frankly
00:50:42,864 — Chuck Kalish
the details are really complex and there’s no right answer here, and people are… it’s gonna be different for every person in every situation. And so if you convey the general moral that you kinda want to think about, you know, this, the, the, this, the, the, the three buckets, the, the… although those kind of tricks that, that, that, that the heuristics that we’ve had are really a way of giving people a framework for making those decisions, and exactly how much they put in each of those buckets is less important.
00:51:12,784 — John Lanza
Yeah, that’s a, that’s a very good point because it isn’t like the, the spender isn’t going to-
00:51:18,634 — Chuck Kalish
Mm-hmm
00:51:18,634 — John Lanza
… recognize the importance of saving, that is a very-
00:51:21,564 — Chuck Kalish
Yeah. Yeah
00:51:21,764 — John Lanza
… that’s a good point. It’s just they aren’t able to, for whatever reason, you know, make that their priority.
00:51:28,904 — Chuck Kalish
Well, they don’t… Well, again, right. And again, “be able to” is an interesting way of framing it. Y- do you know the recent work on the marshmallow test? This work that came out of Rochester. The, the classic, uh, claim in the marshmallow test it’s like, “This predicts your life.”
00:51:42,703 — John Lanza
Yeah. Right, right.
00:51:43,444 — Chuck Kalish
Like that kids who fail the marshmallow test getting out of jail, they’ll get pregnant, they’ll drop out of school. Kids who pass the marshmallow test, you know, go to, go to college, blah, blah, blah. So someone said, “Well, is this, is this really about the individual kid or is it about the context that you’re in?”
00:52:03,224 — John Lanza
Yeah.
00:52:04,304 — Chuck Kalish
Um, and so they did the ex- same experiment with the marshmallow task, except they
00:52:08,464 — Chuck Kalish
randomly varied the experimenter. In, in half the conditions… This is Celeste Kidswork at Rochester. Half the condit- half the kids saw an experimenter was super competent, like lab coat, notebook, knew what she was doing. You know-
00:52:22,074 — John Lanza
Mm-hmm
00:52:22,074 — Chuck Kalish
… “Here’s the deal, kid, you either eat the marshmallow now or I’ll be back in 15 minutes. Look, here’s the clock, 15 minutes, I’ll be back.” And other half of the kids saw a really sloppy experimenter. Someone who didn’t know what they were doing, someone who dropped things, someone who seemed unclear of how this… how the task worked. Right? And what do you think happened?
00:52:41,364 — John Lanza
Changed the outcome.
00:52:43,144 — Chuck Kalish
Yeah. The, the kids who, who saw the incompetent experimenter didn’t wait.
00:52:47,084 — John Lanza
Yeah. Yeah. Yep.
00:52:47,434 — Chuck Kalish
If the future’s uncertain, you don’t wait for that second marshmallow.
00:52:50,764 — John Lanza
Yeah.
00:52:51,184 — Chuck Kalish
Right?
00:52:51,344 — John Lanza
Wow.
00:52:51,744 — Chuck Kalish
So now it’s not about the kid-
00:52:54,703 — John Lanza
Yeah
00:52:54,904 — Chuck Kalish
… and are they able to wait, it’s about the kid’s perception of their environment. Are they in an environment where it pays to wait, where, where the, the, the, the, the… where, where, where my, where my investment will be returned, where I’m in an investment mode of my life, where I’m… or where I’m in an exploitation mode of life, where I’m in a situation where I have to grab all the goodies I can now because the future is uncertain, right?
00:53:18,144 — John Lanza
That really… Yeah. That’s, that, that is, uh, really interesting because-
00:53:22,604 — Chuck Kalish
Isn’t that cool?
00:53:23,374 — John Lanza
[laughs] Yeah. Um, because I, I know that, um, one of the, um, the… I think it was Michelle who did the… I know he did follow-up, follow-up experiments with people ap- you know-
00:53:34,404 — Chuck Kalish
Yes, yes.
00:53:35,184 — John Lanza
When they were-
00:53:35,394 — Chuck Kalish
Walter Mischel, yes, exactly
00:53:35,913 — John Lanza
… when they were older, but I think he also-
00:53:38,404 — Chuck Kalish
Yeah
00:53:38,413 — John Lanza
… became… was really, was really passionate or obsessed or whatever you want to use, about identifying that interventions could make a difference.
00:53:48,163 — Chuck Kalish
Yeah.
00:53:48,184 — John Lanza
So that it wasn’t something that… like you’re-
00:53:50,944 — Chuck Kalish
Yes.
00:53:51,104 — John Lanza
It wasn’t that, “Oh, that kid failed the marshmallow test.”
00:53:53,744 — Chuck Kalish
Yeah.
00:53:53,784 — John Lanza
Move on. [laughs]
00:53:55,304 — Chuck Kalish
Yeah.
00:53:55,524 — John Lanza
You know, it was-
00:53:56,304 — Chuck Kalish
Yeah.
00:53:56,484 — John Lanza
That, that there are things-
00:53:57,203 — Chuck Kalish
Yeah
00:53:57,284 — John Lanza
… interventions that could be done.
00:53:58,654 — Chuck Kalish
Yeah.
00:53:58,654 — John Lanza
And I know that you guys talked about interventions in your paper, um, so that might, that might be helpful-
00:54:03,384 — Chuck Kalish
Oh, yeah
00:54:03,394 — John Lanza
… if you have any more to add on that.
00:54:05,184 — Chuck Kalish
Yeah, yeah, sure. And, and in fact that, that’s really an in- interesting feature of Mischel’s work is that he sort of became a real critic of these trait theories of personality.
00:54:16,214 — John Lanza
Mm-hmm.
00:54:16,334 — Chuck Kalish
That you’re sort of born with a certain amount of a particular trait, and, uh, uh, very much, uh, uh, in line with this sort of contextual based model of, of personality. So he would have loved, I think, the, the, the, uh, sloppy experimenter marshmallow task version.
00:54:32,144 — John Lanza
Yeah. Now, I’m, I’m curi- that’s… I, I have to go back to this because first of all, it’s a super creative idea for an experiment, so I l- I think that’s fantastic. But what, what does it tell us then about the, the, the usefulness of the test?
00:54:47,544 — Chuck Kalish
[laughs] It is. I mean, it frankly is designed to undercut a certain-
00:54:53,124 — John Lanza
Yeah
00:54:53,304 — Chuck Kalish
… kind of interpretation, right?
00:54:54,594 — John Lanza
Yeah.
00:54:54,724 — Chuck Kalish
I mean,… you know what we mind, what we might want to say now about those kids who failed the marshmallow test at age three and are ending up in jail at age, you know-
00:55:05,916 — John Lanza
Yeah
00:55:06,076 — Chuck Kalish
… 19. Or maybe they were in a bad environment at age three, an environment that didn’t reward investment, an environment where the future was uncertain, and an environment where they had to grab as many resources as they could now because they couldn’t trust their parents or their environment to, to give them the resources they need. Oh, you tell me that those kids end up in jail more at age 19? That’s not really that surprising.
00:55:29,696 — John Lanza
Yeah.
00:55:30,016 — Chuck Kalish
Um, yeah, so that’s exactly what it’s for.
00:55:32,416 — John Lanza
But, but, but let me, let me just understand something from… But experimentally though, like if Mischel is using, you know, I mean, theoretically if he used the same experimenter in every experiment-
00:55:43,666 — Chuck Kalish
Yeah. Yeah
00:55:43,686 — John Lanza
… then that would, that would-
00:55:45,046 — Chuck Kalish
Yeah. Well, here’s the-
00:55:45,616 — John Lanza
Yeah
00:55:45,756 — Chuck Kalish
… here’s the idea is though that, that I come into that experience with my own expectations about people.
00:55:51,516 — John Lanza
Yep.
00:55:52,216 — Chuck Kalish
If I’m distrustful of people, if most of the people in my life have lied to me,
00:55:57,656 — Chuck Kalish
I’m not really gonna believe this, this experimenter is coming back with that marshmallow.
00:56:01,936 — John Lanza
[laughs] Yeah.
00:56:02,996 — Chuck Kalish
That’s, that’s the-
00:56:03,716 — John Lanza
Yeah, I get it. Yeah, yeah, that’s-
00:56:05,356 — Chuck Kalish
Yeah.
00:56:05,636 — John Lanza
So it really does make you have to… That, that’s, that, that is fascinating. I don’t know, I don’t-
00:56:10,656 — Chuck Kalish
It’s complicated.
00:56:11,296 — John Lanza
Yeah, it’s very complicated. Now I wanna go back and look at any, uh, blog posts that I’ve done about Walter Mischel and the, uh… [laughs]
00:56:17,726 — Chuck Kalish
[laughs] Well, I’ll, I’ll send you the link to this, this paper. It’s a great, it’s a great paper.
00:56:21,716 — John Lanza
Yeah, we’ll post that in the show notes ’cause that-
00:56:23,456 — Chuck Kalish
Okay, good
00:56:23,706 — John Lanza
… is, uh, that’ll be hugely helpful, that’s true. ‘Cause I mean that’s, it’s always the, the study that is cited, um, as a-
00:56:30,036 — Chuck Kalish
Oh, yeah
00:56:30,636 — John Lanza
… I, I mentioned to Elizabeth when we, uh, did our podcast, [laughs] your colleague. Um, I-
00:56:34,996 — Chuck Kalish
Yeah
00:56:35,076 — John Lanza
… said that we would do the Kit Kat test if it were in my house.
00:56:38,156 — Chuck Kalish
[laughs]
00:56:38,556 — John Lanza
So, so the… I would have failed the marshmallow… Actually, no, I would have, I would have passed the marshmallow test ’cause I don’t even like marshmallows.
00:56:43,526 — Chuck Kalish
You don’t like marshmallows?
00:56:43,576 — John Lanza
I’d be like, “I don’t care.”
00:56:44,476 — Chuck Kalish
That’s the other problem.
00:56:44,506 — John Lanza
You can give me three of them, I’ll just sit here and… [laughs]
00:56:46,426 — Chuck Kalish
That, that’s the problem. Well, but, but that, but, but to be fair, I mean, okay, so, so
00:56:51,716 — Chuck Kalish
the, the, the, the, the moral of the story is don’t think you can predict the course of a person’s life based on their behavior in this one little task. But the other… You, you don’t want to overshadow the moral that, yes, there are individual differences in executive function, and that it does seem like some kids are, we think… And this is the real question of how general is it, but, but some kids do seem better able to get a handle on themselves, to, to, to meet social expectations, to kind of, uh, inhibit these desi- these, these desires, these urges, the, to, to reco- to step back and reflect on their thinking. And, and those are… Man, you know, we, we like that. Now, there’s now a current pushback to think we like that too much, but
00:57:42,756 — Chuck Kalish
you don’t wanna go overboard and say, “Oh, there’s no such thing as executive function, it’s all just your experience.” No, I mean,
00:57:49,736 — Chuck Kalish
we, we, these are… To the extent we can help kids
00:57:55,716 — Chuck Kalish
with this kind of self-control, we definitely wanna do that.
00:57:59,316 — John Lanza
Yeah. Well, you know, so much of… It’s, it’s, this is… It’s like so many movies are, celebrate the prodigy and, you know, and that’s, that’s part of the problem, is like there, there’s the, the… Just, I mean, why are we celebrating the prodigy? [laughs]
00:58:14,766 — Chuck Kalish
Yeah. [laughs] Well, and-
00:58:14,916 — John Lanza
If they’re-
00:58:16,136 — Chuck Kalish
Yeah.
00:58:16,436 — John Lanza
No, go ahead.
00:58:16,816 — Chuck Kalish
Why are we making life hard for our kids?
00:58:18,456 — John Lanza
[laughs] Right. And, and-
00:58:19,876 — Chuck Kalish
You know?
00:58:20,256 — John Lanza
And I-
00:58:20,676 — Chuck Kalish
This is-
00:58:20,816 — John Lanza
Yeah. I, I’ve, I’ve, I’ve been guilty of it too, you know? It’s, uh-
00:58:23,956 — Chuck Kalish
Well, you know, you probably send your kids to a good school, right?
00:58:26,916 — John Lanza
Mm-hmm.
00:58:27,166 — Chuck Kalish
They want them to do well.
00:58:28,476 — John Lanza
I hope so.
00:58:29,796 — Chuck Kalish
Well, they, they, you know, they, they… There’s a lot of pressure, they have to work hard. They’re, they, they are… And maybe this comes back to that question I, uh, uh, about letting a kid be a kid.
00:58:40,756 — John Lanza
Yeah.
00:58:41,216 — Chuck Kalish
Right? You know, on the one other hand, I think this idea that we don’t want kids to really feel like they have to be careful, that they have to be vigilant, that they have to… They can’t trust their instincts, that they have to be successful, they have to be… Get it right.
00:58:56,056 — John Lanza
Yeah.
00:58:56,476 — Chuck Kalish
You know, that’s a lot of pressure on kids and, and, and a lot of it is coming from the academic world, right? S- uh, school is harder than it ever was in the past.
00:59:04,636 — John Lanza
Yeah.
00:59:05,876 — Chuck Kalish
If… And, and the world is more complicated and I think, you know, all of us, in fact, you know, I think there’s a direct line to a lot of our political, uh, uh, situation.
00:59:15,696 — John Lanza
Sure.
00:59:15,816 — Chuck Kalish
All of us feel like the world is a, is a more complicated, potentially scary, at least fraught place where you really need to be on your game to do well.
00:59:25,116 — John Lanza
Yeah.
00:59:25,616 — Chuck Kalish
And, uh, uh, it is, uh, not as unmixed good. Like, if what we’re trying to do is teach kids to think about the world in that way, we don’t want to do that too much.
00:59:40,416 — John Lanza
You’re right. You’re right. There was something I had, I wanted to go back to because you were talking about the kids, and it, it sparked in my head another question I wanted to ask you, which is the, how kids have different money personalities. Can you speak to how real that concept is and the research to the extent that it exists, and a little bit more about how they develop, you know, and, and, and, and how we can help as parents develop habits and norms that we’d like them to develop?
01:00:07,616 — Chuck Kalish
Well, let me call out one of my colleagues, Margaret Eshelbarger-
01:00:10,396 — John Lanza
Okay
01:00:10,816 — Chuck Kalish
… who’s at the University of Chicago now. Uh, we published a paper together recently in child development about kids thinking about money. Now, she’s been very interested in these spendthrifts and savers and when those kind of money personalities might, might emerge in kids. Uh, you know, the science of personality and of individual differences is tough. We, I don’t think we, uh, it’s not my field and so I don’t have, uh, uh, a, a lot to, to, to say about it, but I will say it’s, it’s hard to know what the dimensions are along which we see these stable individual differences in people that, that persist from childhood into adulthood. Th- there’s a lot of interest in the idea of temperament and that these are stable things. Um, you know, introversion, extroversion seems very real…. I, I just don’t know.
01:01:04,220 — John Lanza
Yeah.
01:01:04,560 — Chuck Kalish
I do know that, um,
01:01:07,860 — Chuck Kalish
kids certainly develop personalities and styles around money for all sorts of reasons.
01:01:14,180 — John Lanza
Yeah.
01:01:14,299 — Chuck Kalish
Whether it’s their innate, uh, endowment or whether it’s just their role in the family, you know. Uh, uh, my daughters are about five years apart, and the older one was always more competent, and so always better able to save her money-
01:01:28,080 — John Lanza
Mm-hmm
01:01:28,330 — Chuck Kalish
… whereas the younger one, she’s young, she’s a, she’s impulsive.
01:01:32,089 — John Lanza
[laughs]
01:01:32,100 — Chuck Kalish
She was gonna spend it.
01:01:33,660 — John Lanza
Yep.
01:01:34,060 — Chuck Kalish
And so you develop this family narrative that the older one is the saver and the younger one is the spender. And that’s as much about their birth order-
01:01:41,650 — John Lanza
Yeah
01:01:41,660 — Chuck Kalish
… as it is about them, right? And, and, and so without,
01:01:47,380 — Chuck Kalish
without answering your question in any deep way, I’d say, yes, people develop these very individual differences. Even within the same family, people come out with very different ideas about money and, and, and perspectives-
01:02:00,700 — John Lanza
Yeah
01:02:00,880 — Chuck Kalish
… on, on saving.
01:02:01,680 — John Lanza
No, that’s, that’s helpful. I, I, I think, um, the one, the one thing that I tr- we try not to do is to, uh, and, and we, we are successful sometimes and not successful at this is-
01:02:11,069 — Chuck Kalish
[laughs]
01:02:11,069 — John Lanza
… is try to not be judgmental of-
01:02:13,330 — Chuck Kalish
[exhales] Yeah
01:02:13,330 — John Lanza
… those types of different personalities ’cause your, your natural inclination is to say, “Good job saving.” And then the-
01:02:21,480 — Chuck Kalish
[laughs]
01:02:21,509 — John Lanza
… other, you know, the other ones sort of… [laughs]
01:02:22,810 — Chuck Kalish
Yeah. Yeah. Well, they… Uh, frankly, uh, uh, I think my daughter’s… My older daughter’s too cautious with money.
01:02:29,259 — John Lanza
Yeah.
01:02:29,460 — Chuck Kalish
She should enjoy it more.
01:02:30,560 — John Lanza
Yeah.
01:02:30,860 — Chuck Kalish
You know, and that’s a… Like, it’s a, uh, that’s a good problem to have. That’s the better-
01:02:35,560 — John Lanza
Yeah.
01:02:35,700 — Chuck Kalish
I mean, it’s a better problem to have, but it’s, it’s not… You know, like I am amazed that my younger daughter can go spend a ton of money on something stupid-
01:02:44,480 — John Lanza
[laughs]
01:02:45,240 — Chuck Kalish
… and it breaks, and she’s not sad. She’s like-
01:02:48,350 — John Lanza
[laughs]
01:02:48,350 — Chuck Kalish
… “Yeah, I enjoyed it. It was fun. Like I, you know, I liked that. I liked spending the money.” Whereas I get, get so anxious about making this purchase, and then if it wasn’t the exact right purchase, I would be upset, and all this regret.
01:03:00,350 — John Lanza
Right.
01:03:00,360 — Chuck Kalish
And she’s like, she, you know-
01:03:03,200 — John Lanza
What’s done is done
01:03:03,440 — Chuck Kalish
… from my perspective-
01:03:04,279 — John Lanza
Yeah
01:03:04,540 — Chuck Kalish
… it wa- done is done. She… From my perspective, she’s wasting money. From her perspective, she got a lot of pleasure out of that. And frankly, I think she’s right.
01:03:12,880 — John Lanza
Yeah. Well, I… And either, whether she’s right or wrong, it’s important for her to develop some, you know, the, her, her values around money-
01:03:19,890 — Chuck Kalish
Yeah. Y- well, that’s right.
01:03:21,100 — John Lanza
Yeah.
01:03:21,340 — Chuck Kalish
In, in, uh, in… Right. And if I just stomped on that-
01:03:24,420 — John Lanza
Yeah
01:03:24,429 — Chuck Kalish
… if I just said, “No, you can never enjoy spending money,” I, I am lost, right?
01:03:29,840 — John Lanza
Yeah. [laughs]
01:03:30,140 — Chuck Kalish
There is no way I’m gonna get through to her with that. No, it’s like, “Yeah, right, but you know what? Let’s recognize that you have that kind of attitude towards money, and let’s think about what you wanna do about it.” For example, she told me, “I don’t want a credit card.” She doesn’t have a credit card. And so, you know, she knew that about herself.
01:03:51,660 — John Lanza
Uh, it reminds me, there was a great, uh, I think Tim Ferriss talked about this in, uh, one of his, um, uh, episodes. He was saying this idea, talking to, I think he was talking to Seth Godin. They were talking about, um, compartments of extravagance, which is-
01:04:04,880 — Chuck Kalish
Hmm. Yeah, yeah, yeah
01:04:05,589 — John Lanza
… uh, something that I wrote about, ’cause I, I, I really like this idea, and it gets to, to what you’re talking about with your daughter, and it’s getting, gets to, uh, your initial point about, too, about partners. You know, your compartment of extravagance might be eating out.
01:04:19,270 — Chuck Kalish
[laughs] Different than mine, yeah.
01:04:20,100 — John Lanza
Right, and someone else’s-
01:04:20,990 — Chuck Kalish
Yeah
01:04:20,990 — John Lanza
… compartment of extravagance-
01:04:22,180 — Chuck Kalish
Yeah. No, I think that’s right
01:04:22,350 — John Lanza
… might be something else. Right. And so it’s important to recognize the value of each other’s compartment, and it’s important to be okay with having that.
01:04:31,480 — Chuck Kalish
Yeah. Yeah. Yeah. I think-
01:04:32,709 — John Lanza
And… Yeah
01:04:32,709 — Chuck Kalish
… that’s a really good point.
01:04:34,100 — John Lanza
Yeah.
01:04:34,529 — Chuck Kalish
And, uh, you know, and it, and, and if that compartment gets too big, you might wanna worry about it.
01:04:39,620 — John Lanza
Yes. Exactly.
01:04:40,549 — Chuck Kalish
But, you know what? It, it, it… There’s a lot of value in that. Like, again, the… This, I think this comes back to this idea of a sort of rational evaluation of costs and benefits is important, but it’s not the only way to make decisions.
01:04:58,910 — John Lanza
[laughs]
01:04:58,920 — Chuck Kalish
It’s not even the best way to make decisions.
01:05:01,500 — John Lanza
Right.
01:05:02,040 — Chuck Kalish
It’s just a good way to have access to when you need it.
01:05:05,299 — John Lanza
Yeah. I, I like that idea. Uh, you’re, you’re right. It, it is not, they’re not the only way. We know we work and-
01:05:11,390 — Chuck Kalish
Yeah
01:05:11,390 — John Lanza
… we have our two, two different systems, as Kahneman talks about, and, and we’re making a lot of decisions that, that, that, that would be a bad decision in one realm, but luckil- you know, we need, we need to make those decisions quickly in another realm, so I, I like that the lack, uh, uh, and, and I say this, and I, I, I know that I am very judgmental of my kids’ decisions-
01:05:31,600 — Chuck Kalish
[laughs]
01:05:31,609 — John Lanza
… on an ongoing basis. So as I say this to talk about it-
01:05:34,690 — Chuck Kalish
That’s your job. That’s your job.
01:05:34,920 — John Lanza
Right. [laughs] I know that I need to work on it myself, but I, I’m, I, I thought that that’s a very good point, that, uh, decisions are decisions, and, um-
01:05:43,220 — Chuck Kalish
Yeah
01:05:43,560 — John Lanza
… you know, they-
01:05:43,930 — Chuck Kalish
And you kind of, kinda… You know, you, you can, um,
01:05:49,240 — Chuck Kalish
uh, offer the benefit of your experience, and that’s about what you get. I mean-
01:05:55,210 — John Lanza
Yeah
01:05:55,580 — Chuck Kalish
… you have… It’s as you said, 13 or 15-year-old, you’re not… You can’t tell them anything.
01:06:00,299 — John Lanza
[laughs]
01:06:01,080 — Chuck Kalish
Just show them things.
01:06:02,220 — John Lanza
Yeah. Yeah. Definitely not the 15-year-old.
01:06:04,840 — Chuck Kalish
[laughs]
01:06:05,200 — John Lanza
13-year-old is turning, and, uh-
01:06:07,470 — Chuck Kalish
Yeah. Thank you. Okay.
01:06:08,540 — John Lanza
[laughs]
01:06:08,880 — Chuck Kalish
Well, it’s, uh, it’s more… The, the virtue is that, uh, with the younger one, you just know when to give up quicker.
01:06:14,140 — John Lanza
[laughs] That’s-
01:06:15,270 — Chuck Kalish
You can see.
01:06:15,270 — John Lanza
That’s a very good… That’s a good point. Yeah. Every day that goes by that it hasn’t been a complete turn-
01:06:20,359 — Chuck Kalish
[laughs]
01:06:20,380 — John Lanza
… you’re like, “Wow, this is incredible.”
01:06:21,770 — Chuck Kalish
Yeah, that’s right. Yeah. Your, your-
01:06:23,220 — John Lanza
[laughs]
01:06:23,350 — Chuck Kalish
… your definitions of victory have really shifted.
01:06:25,950 — John Lanza
[laughs] When’s it coming?
01:06:27,580 — Chuck Kalish
[laughs]
01:06:27,640 — John Lanza
When is the completely ignore dad period coming?
01:06:31,250 — Chuck Kalish
Yeah. Oh, no. That never happens.
01:06:32,259 — John Lanza
[laughs]
01:06:33,160 — Chuck Kalish
That ne- you know, that’s the other thing, is that… I’ll finish talking about my kids.
01:06:37,120 — John Lanza
Yeah.
01:06:37,299 — Chuck Kalish
Um,
01:06:38,580 — Chuck Kalish
now the younger one, this, the, this, the, the, the, the spendthrift, the, the one who was… She looks around her friends and goes, “Wow, I’m really financially responsible.”
01:06:47,840 — John Lanza
Yeah.
01:06:48,180 — Chuck Kalish
You know, “In the f- in the family, I was the, the spendy one.”
01:06:52,000 — John Lanza
[laughs]
01:06:52,779 — Chuck Kalish
But, but among my friends, I’m really responsible.
01:06:55,259 — John Lanza
Yeah.
01:06:55,410 — Chuck Kalish
And so, you know, you’re, you’re setting, you’re setting the standard in the family-
01:07:00,460 — John Lanza
Yeah
01:07:00,700 — Chuck Kalish
… that your kid can kind of, uh, define themselves against.
01:07:03,460 — John Lanza
Yeah.
01:07:04,040 — Chuck Kalish
But, but there’s a whole lot of other standards out there in the world.
01:07:06,959 — John Lanza
Yeah. Now, that, that’s, that is, uh, that’s, that’s a good point. And it’s something that, you know, any kid, once they get out on their own-
01:07:12,819 — Chuck Kalish
Yeah, that’s right
01:07:12,968 — John Lanza
… they just embrace, like, “Oh, I’m not… I don’t have to be the younger kid anymore.”
01:07:16,930 — Chuck Kalish
[laughs]
01:07:16,930 — John Lanza
“I don’t have to be the responsible older kid anymore. I can just be me.” [laughs]
01:07:21,140 — Chuck Kalish
Right. Or the flip side is, “Oh, my God. My family really warped me.”
01:07:24,459 — John Lanza
[laughs] Well, well, that’s, that’s inevitable.
01:07:25,830 — Chuck Kalish
Uh, even away from my family, and look at me.
01:07:27,680 — John Lanza
[laughs]
01:07:28,330 — Chuck Kalish
Yeah. Yeah.
01:07:29,089 — John Lanza
Right.
01:07:29,089 — Chuck Kalish
Yeah.
01:07:29,120 — John Lanza
And-or, “I’m turning into my dad.”
01:07:31,680 — Chuck Kalish
Yeah. Again, then, then we think we did a good job. [laughs]
01:07:34,830 — John Lanza
[laughs] Okay, so we never even got to, uh, uh, emporiofobia, which is-
01:07:39,899 — Chuck Kalish
Oh, yeah
01:07:40,700 — John Lanza
… something. So I, I do want to come back to that, but I d- I want to get to our fast and fun round questions ’cause I wanna see… Um, get your responses to those. So, um, so here we are. Are you ready, Chuck?
01:07:51,919 — Chuck Kalish
Okay.
01:07:52,399 — John Lanza
Um-
01:07:52,410 — Chuck Kalish
I’m not ready, but I’ll, I’ll give it a go.
01:07:54,720 — John Lanza
[laughs] What does the term money empowered mean to you?
01:07:59,899 — Chuck Kalish
Money empowered means to me that people feel okay about decisions they make about money, that they are comfortable making decisions about money.
01:08:09,319 — John Lanza
Hmm. That makes perfect sense. What is the best investment of time or money you ever spent on your kids?
01:08:19,460 — Chuck Kalish
Wow. The best investment of time… I mean, it’s gotta be sending ’em to fancy colleges.
01:08:24,269 — John Lanza
[laughs]
01:08:24,279 — Chuck Kalish
Because it, A, it’s, was so expensive. I have to think it was a good investment.
01:08:29,319 — John Lanza
Right.
01:08:29,340 — Chuck Kalish
Otherwise, I’d kill myself. Um, it was a great investment because it postponed their need to think about money.
01:08:38,920 — John Lanza
Yeah.
01:08:39,380 — Chuck Kalish
Right? It, it, it gave them a little free space where they’re, they’re grown up. They’re gonna get into the real world, and it’s gonna hit ’em hard and fast, but I can give them a chance to sort of ease into it. And, and, and, and I think that, that… And anyway, uh, aside from the amazing education they got and the contacts they made, but that ability to kinda ease that transition to adulthood for them is a hugely valuable investment.
01:09:03,800 — John Lanza
Hmm. I had not ever really thought about it like that.
01:09:06,859 — Chuck Kalish
Hmm.
01:09:06,979 — John Lanza
That’s, uh, that’s, that’s a helpful perspective ’cause I’m, you know, my kids have not entered-
01:09:11,059 — Chuck Kalish
[laughs]
01:09:11,090 — John Lanza
… Your kids have gone through it. My kids have not entered, so-
01:09:14,620 — Chuck Kalish
Yeah
01:09:14,778 — John Lanza
… I am now-
01:09:15,179 — Chuck Kalish
Well, but think about, think about if your, if your 15-year-old was gonna be on their own in three years.
01:09:20,019 — John Lanza
Mm-hmm. Yeah.
01:09:21,179 — Chuck Kalish
Yeah.
01:09:21,559 — John Lanza
Yeah. That’s, that is scary. That’s scary.
01:09:23,819 — Chuck Kalish
[laughs] Exactly.
01:09:25,260 — John Lanza
Um, so what advice to your kids do you most hope that they will heed?
01:09:32,059 — Chuck Kalish
Uh, live a little below your means.
01:09:33,939 — John Lanza
[laughs] That’s, that was the, uh, exact message from my grandfather. Yeah, it was, it was, “Live b- live beneath your means and understand the power of compound interest.”
01:09:44,899 — Chuck Kalish
Yeah. [laughs] Did you see there was a, a, a New York Times special supplement about, uh, how to be an adult? And there was a nice, uh, thing in there about avoiding lifestyle inflation, right?
01:09:58,280 — John Lanza
Yeah.
01:09:58,300 — Chuck Kalish
Just because your income goes up doesn’t mean your consumption should go up. That, I think that’s a way of saying live below your means.
01:10:04,580 — John Lanza
Yeah. I think you’re right, and I, I wish I had heeded the advice a little bit earlier.
01:10:08,340 — Chuck Kalish
[laughs]
01:10:09,130 — John Lanza
Uh, but it is great advice, and I, and I-
01:10:11,068 — Chuck Kalish
Well, all the… So the… Okay.
01:10:12,289 — John Lanza
Yeah.
01:10:12,639 — Chuck Kalish
You want another? You want the-
01:10:13,940 — John Lanza
Sure. Yeah, yeah, yeah. Yep.
01:10:14,370 — Chuck Kalish
The best advice I was ever given about money? So my, not only is my dad an, uh, uh, econ professor, my wife has a PhD in economics. My older daughter’s getting a PhD in economics.
01:10:24,480 — John Lanza
Wow. Okay.
01:10:25,130 — Chuck Kalish
So I’m surrounded by economists.
01:10:26,320 — John Lanza
Yes.
01:10:27,440 — Chuck Kalish
So the permanent income hypothesis is a hugely valuable, uh, piece of economic wisdom for young people. And the idea of the permanent income hypothesis is that what you should do is take all the income you will ever earn in your entire life and spread it evenly across every year of your life. There’s no reason to think that you’d rather have more money later than now. And so if you know you’re going to have more money later than now, you should actually borrow money now. And they don’t call it borrow it, borrowing, they call it dissaving. You’re actually smoothing your income across your entire life.
01:11:00,980 — John Lanza
Okay.
01:11:01,840 — Chuck Kalish
And so what, what that means, besides giving you this great idea of dissaving instead of borrowing, is that it gives you an excuse for seeing yourself as an in- an investment period of your life. That there are certain times in your life where your income is low, b- but you know your income is going to be higher later on. When you’re a, when you’re a struggling, f- you know, when you have your first job out of college, you know if you do things right, you should expect that your income will go up. And so you should expect to, to borrow a little bit because you’re just smoothing your income. You’re taking the money you’ll earn later and consuming it now.
01:11:39,500 — John Lanza
Thank you for that. And, um-
01:11:41,019 — Chuck Kalish
[laughs] There you go.
01:11:42,360 — John Lanza
The permanent income…
01:11:44,300 — Chuck Kalish
We’re of service.
01:11:44,389 — John Lanza
What is that called? Hypothesis, right?
01:11:45,410 — Chuck Kalish
Permanent income hypothesis.
01:11:46,200 — John Lanza
Okay. Good. You’re good.
01:11:47,070 — Chuck Kalish
Yeah.
01:11:47,120 — John Lanza
I will, we’ll definitely have to post, uh, if there’s-
01:11:49,019 — Chuck Kalish
[laughs]
01:11:49,219 — John Lanza
If there’s, we’ll, we’ll put that in the show notes.
01:11:50,800 — Chuck Kalish
We’ll see. I’m sure we’ll find it somewhere.
01:11:51,750 — John Lanza
Yeah. There’s gonna be a lot of stuff in the show notes. That’s good. If you could transmit a message that everyone would see, what would it say?
01:12:01,080 — Chuck Kalish
[laughs]
01:12:01,139 — John Lanza
So it could be a billboard, it could be up in the sky, it could be wherever it might be.
01:12:05,820 — Chuck Kalish
Um,
01:12:07,880 — Chuck Kalish
it’s not that complicated. Uh, meaning-
01:12:10,880 — John Lanza
Yeah
01:12:11,280 — Chuck Kalish
… uh, you, about money, I assume?
01:12:12,620 — John Lanza
Yeah.
01:12:13,019 — Chuck Kalish
Right.
01:12:13,139 — John Lanza
Uh, yeah, ideally about money.
01:12:14,670 — Chuck Kalish
[laughs]
01:12:14,809 — John Lanza
Yes.
01:12:15,260 — Chuck Kalish
Yeah. Uh, but it’s not that complicated. It’s, it, there’s no magic. Uh, this is not arcane. It’s not, it’s, it’s, it’s not rocket science. You’re good at this. You manage resources all the time. Money is just another s- thing that you have to decide how much of of you want and how much you wanna spend or how much you wanna consume and how much you wanna save.
01:12:38,540 — John Lanza
Yeah, I, that’s, that’s a great answer ’cause that, uh, “it’s not that complicated” is really at the heart of what we’re trying to get across, is that-
01:12:44,750 — Chuck Kalish
Yeah, that’s right.
01:12:45,380 — John Lanza
Yeah.
01:12:45,389 — Chuck Kalish
You wanna make it access-
01:12:46,420 — John Lanza
Yeah.
01:12:46,719 — Chuck Kalish
Absolutely.
01:12:46,740 — John Lanza
You make it accessible. And, and you, if you, if you think about it like that, it makes it much easier as a parent to start the conversation with your kids.
01:12:54,139 — Chuck Kalish
That’s right.
01:12:54,550 — John Lanza
Yeah.
01:12:54,580 — Chuck Kalish
Exactly. Yeah.
01:12:55,469 — John Lanza
That’s great.
01:12:55,480 — Chuck Kalish
You wanna, you wanna f- you wanna, you know, no conversation works well when it’s coming from a place of anxiety or-
01:13:01,500 — John Lanza
Yeah
01:13:01,590 — Chuck Kalish
… or discomfort, right? You wanna feel, feel good of yourself as a parent.
01:13:04,820 — John Lanza
Yeah.
01:13:05,230 — Chuck Kalish
Yeah.
01:13:05,260 — John Lanza
That’s great.
01:13:05,760 — Chuck Kalish
Absolutely.
01:13:06,280 — John Lanza
So what’s the, uh, what’s the one parenting and/or money smarts book that you go back to or that you gift?… the most often? [laughs]
01:13:15,558 — Chuck Kalish
[laughs] This is funny, I, I, I, I, uh, I’m sorry, I don’t think this is learned through books.
01:13:20,947 — John Lanza
Okay.
01:13:21,348 — Chuck Kalish
Uh, uh, but I would give them a video game.
01:13:25,367 — John Lanza
You would?
01:13:25,848 — Chuck Kalish
Almost any video game. Yeah.
01:13:27,428 — John Lanza
Really? Okay.
01:13:28,298 — Chuck Kalish
Yeah. Any, uh, yeah, think about a video game, whether it’s the sort of stupidest first person shooter or the most complicated, like, empire building Civilization game. It’s all about managing resources. Even if the resources is like, it doesn’t pay to go down that hallway, ’cause I’ll have to use really rare, really expensive ammunition to kill these bad guys, and the- and the goodies I’ll get at the end isn’t worth it.
01:13:51,848 — John Lanza
Yep.
01:13:52,067 — Chuck Kalish
Right? That’s a r- that’s a resource allocation. That’s a- that’s an investment decision. So…
01:13:57,548 — John Lanza
Now the prompt-
01:13:58,277 — Chuck Kalish
Uh, um-
01:13:58,468 — John Lanza
Now you-
01:13:58,808 — Chuck Kalish
… let your kids play video games.
01:13:59,628 — John Lanza
You, that’s a great answer, and you’ve, uh, you’ve presented a dilemma for me because now-
01:14:04,367 — Chuck Kalish
Uh-huh
01:14:04,378 — John Lanza
… I have the clickbait, um, headline for-
01:14:08,168 — Chuck Kalish
[laughs]
01:14:08,378 — John Lanza
… this podcast. And the question is, will I use it or not? [laughs]
01:14:13,128 — Chuck Kalish
I, I would not be unhappy-
01:14:16,638 — John Lanza
[laughs]
01:14:16,748 — Chuck Kalish
… if the message is, you know, “Professor says-“
01:14:21,768 — John Lanza
[laughs]
01:14:22,038 — Chuck Kalish
“… let your kids play video games.” I would be very actually quite happy with that.
01:14:25,928 — John Lanza
Now this has been terrific. I learned a ton and, uh, I really appreciate you taking the time to shed some light on this for me and for, uh, the rest of our audience.
01:14:35,308 — Chuck Kalish
Okay. It was a pleasure, I really enjoyed it and, um, and, uh, uh, good luck with the rest of your podcast. I look forward to hearing more of ’em.
01:14:41,748 — John Lanza
Great. Thanks, Chuck.
01:14:42,687 — Chuck Kalish
Okay. Talk to you later. [instrumental music]
01:14:49,947 — John Lanza
I hope you enjoyed my discussion with Chuck Kalish. If you like this podcast, I have a big favor to ask and it won’t cost you a dime. Please go to iTunes or Radio Public, Stitcher or Spotify, wherever you get your podcasts, and leave me a review. I would really appreciate it and it would go a long way to helping me have more conversations with parents and money experts like Chuck. I really want to keep this going and I need your help. So thank you in advance for making your way over to iTunes or any of the other outlets and leaving a review for my show. I appreciate it. Thanks. Of course, please consult with a financial or investment professional before engaging in any decisions that might affect your own financial wellbeing. And find out more about our movement at theartofallowance.com. You can download a sample or get a copy of my new book, The Art of Allowance, and use the checkout code “PODCAST” to spend smart and save yourself a few bucks. The book is also available on Amazon. You might want to check out The Money Mammals, our program to get your kids excited about money smarts when they’re young. And until next time, I wish you and your family well on your own journey to money empowerment. Thanks for listening.