“Working to help parents raise money-smart kids.”
Hello, friends!
I love writing this newsletter for you each week. It’s a forcing function that helps me craft new resources and share existing ones in a way that I hope is helpful to you.
During this process a theme often rises to the surface, and this week proved no exception. So let’s explore control and and how we can help our kids manage what they can and worry less about what they cannot.
I hope you enjoy these 3 Ideas to Share & Save.
— 1 —
Control What You Can Control: When I spoke with Kennedy Reynolds, the Chief Content & Education Officer at Acorns, she explained that we have more control than we think. She made the astute point that, culturally, many of us have been convinced that we’re out of control when it comes to money. There’s a perception that gaining control of our own financial futures is difficult. 😨
Our futures, though, are in our hands. For instance, we can put in place systems to automatically set aside money that will benefit us down the road. This action — looking for loose digital change to begin building a nest egg — is one of Acorns‘ primary benefits.
Doing so is also in keeping with a philosophy I’ve previously shared with you: We can “nudge” our children by opting them into behaviors, like putting a portion of their allowance in a Save jar every week. This introduces them to the concept of “paying themselves first,” a habit which will help them in the long run.
So let’s teach our kids to focus on what they can control.
— 2 —
Ignore What You Can’t Control: Of course, there are many things we cannot control, one being what other people think of us. So here are two interesting resources that I’ve shared with my own children. Perhaps they’ll prove useful for your tweens and teens too.
For all the worrying that we do, very few people are really paying attention to us. At first glance this actuality seems to go against everything Instagram, Snapchat and TikTok teach our kids. But there are very, very few folks making big splashes on these platforms.
There’s a constant retweeting of the lie that there’s a substantial new class of musicians succeeding financially through Internet publicity. Such people do exist, but only in token numbers.
Jaron Lanier, Who Owns the Future
Most content is ignored.
And that’s a good thing! 🙌
The sooner our children realize that “keeping up with the Joneses” is a fool’s errand, the better. In fact, we created this Adolescent$ “Good Money Habits” video to help get that point across.
— 3 —
Teach and Learn: I love teaching parents how to raise money-smart kids via my Art of Allowance Academy course. And a wonderful side effect of teaching is that you often learn something new.
Case in point: I invited my money-smart buddy and previous podcast guest, Tom Henske, to join last week’s session. He shared a useful idea to help kids begin to get excited about investing and understand the power of compound interest: the venerable Rule of 72.
The Rule of 72 tells us that an investment will double in X years, where X equals 72 divided by the rate of return of said investment. For example, your $1000 becomes $2000 in roughly 10 years at a 7% annual rate of return. 📈
While I was aware of the Rule of 72, I hadn’t thought about it as a compelling way to get children excited about compound interest. But thanks to Tom, I’ll be adding this topic to our upcoming Art of Allowance Academy class sponsored by Patelco Credit Union.
If you would like me to teach one of these interactive, virtual workshops to your members or to a money-smart group that you run, then please reach out.
As a reminder, control what you can and ignore what you can’t. And, as always, please 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.
Like what you just read? You can sign up for the newsletter here.