“Working to help parents raise money-smart kids.”
Hello, friends!
We just released six videos from my recent podcast. In this special episode, my sister Kelly Mindell peppers co-host Robin Taub and me with questions about raising her precocious six-year-old, Arlo, to be money-smart.
So this week’s share-able, save-able ideas feature lessons from three of these new shorts.
— 1 —
You Can Buy Happiness: During the podcast, Kelly, Robin and I discuss how a child’s interest in an allowance will ebb and flow. So while we want to stay consistent with our weekly distribution, we need not push the use of the green stuff that may be accumulating in our kids’ Share, Save and Spend Smart jars.
Our role as our children’s guides is to keep our eyes and ears open for opportunities for them to use their money more productively. At times, these moments will be obvious: “I want to save for a new LEGO set.” Other times, our kids might need a little encouragement: “I see you have twenty dollars in your Share jar. Isn’t your school collecting money for a local shelter right now?”
In this video, Kelly outlines how she helped Arlo shift from just saving for toys to also saving for experiences. And research is on her side, as Elizabeth Dunn and Michael Norton share in their book, Happy Money: The Science of Happier Spending:
“Shifting from buying stuff to buying experiences, and from spending on yourself to spending on others, can have a dramatic impact on happiness.”
“Research shows that experiences provide more happiness than material goods in part because experiences are more likely to make us feel connected to others.”
I’m happy to report that Arlo has saved up enough money for another experience — a trip to Super Nintendo World at Universal Studios — that he will be enjoying soon. 🎉
In the above short, Kelly relates that buying experiences is helping her family deal with the scourge of stuff. Also, you might recall the Get One. Give One. strategy from last week’s newsletter.
— 2 —
To Nudge or Not to Nudge: The First National Bank of Dad author, David Owen, told me in our podcast conversation that he did not require his kids to put money into any particular jar.
But as you may know, in The Art of Allowance, I write that our kids should save and share a portion of each allowance. I call these actions “nudges,” behaviors we require of our kids that align with our values and that we believe will help them develop beneficial long-term habits.
Still, David’s reasoning for not taking this approach is sound. Specifically, he feels that a child required to save one of his five allowance dollars simply thinks of his allowance as four dollars.
There are, of course, some potential big benefits to requiring kids to save money continuously. Kelly shared how she discovered this in our conversation below:
Ultimately, we want to align our allowance with our family’s values, and nudges can help with that. In her book, The Wisest Investment, Robin talks extensively about using a money-smart program to help communicate values:
“In families where philanthropy is a key family value, the importance of sharing is taught at an early age and carried through to young adulthood.”
In fact, nudges helped our daughter save portions of both her allowance and the money she earned from work. So last year, she was able to buy an experience — a flight to visit a friend whose father was working in London. ✈️ She was, of course, very fortunate to have a place to stay.
— 3 —
Patience with the Process: You’re in the store. Your daughter wants a toy. Really wants a toy. Fortunately, she has the money in her Spend Smart jar. Unfortunately, that jar is in her bedroom.
What’s a parent to do? 🤔
Kelly recently ran into this problem with Arlo and asked Robin and me for advice:
- Should she say no and use this challenge as an opportunity to teach him to wait?
- Or is it okay to let him pay her back when they return home?
Find out how Robin and I advised her to deal with this dilemma:
A general insight Robin and I share during our conversation with Kelly is the importance of having patience with the process. Robin and I, holding the advantage of having gone through the gauntlet with our own kids, know firsthand how difficult the journey can be moment to moment. Especially if the moment includes an in-store tantrum. 😬
This is where a little money mindfulness can help us. As we guide our kids along the money-smart journey, they’ll buy some stuff we’ll wish they hadn’t. They’ll also save successfully for some goals. And along the way, their interest in allowance will ebb and flow. We can’t expect them to be excited every week. Some weeks will go better than others. Still, if we stay the course, then we might discover that they are able to save enough money to visit a theme park, purchase a plane ticket or even buy themselves a car.
Until next week, enjoy the journey!
John, Chief Mammal
P.S. Please consult with a financial or investment professional before engaging in any decisions that might affect your own financial well-being.
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