“Working to help parents raise money-smart kids.”
Hello, friends!
I think I have finally fully recuperated from COVID. I caught it around June 10th, right after getting my second booster. Though I recovered from the sore throat and major congestion within a few days, the minor congestion and olfactory issues stubbornly stuck with me for several weeks.
All of this is to say that I hope you’re staying healthy this summer.
Now let’s get to this week’s “3 Ideas to Share and Save”!
— 1 —
More Than Allowance: One of our credit union partners shared an important insight that folks who haven’t read The Art of Allowance might not understand.
“Allowance” is a loaded word. Unfortunately, it is sometimes associated with a handout. Due in part to this negative connotation, I considered coining my own term to replace “allowance” as I wrote my book. However, I ultimately decided against doing so since pretty much everyone knows that an allowance is money provided to kids. And as any regular readers of this newsletter are aware, how and why an allowance is given matters.
But back to our partner. Though they love all the content we’ve created for parents, tweens and teens as part of the new Art of Allowance Project platform, they were getting hung up on the “a” word.
It’s only when you read the book or immerse yourself in the platform (or read this newsletter 😉) that you discover our mission is MUCH bigger than allowance itself.
Generally speaking, an allowance is a catalyst that kickstarts money conversations and helps our kids learn through their own financial experiences. And if we’re open to it, then an allowance can help us be better models for our kids by improving our own money behaviors. I know it’s done that for me.
Truthfully, while I filled The Art of Allowance with practical advice, I think I’m most proud of the “Memos from the Chief Mammal” that I’ve peppered throughout the book. These sections highlight the values that infuse much of what we do.
So as a treat, I’ve included one such memo below.
— 2 —
Wanting More?: The following is an excerpt from my book, The Art of Allowance: A Short, Practical Guide to Raising Money-Smart, Money-Empowered Kids.
Wanting More?
“The more we associate experience with cash value, the more we think that money is what we need to live.” – Rolf Potts
As Seth Godin pointed out on The Tim Ferriss Show podcast, you have to make a choice once you have provided the basics for your family (food, shelter, healthcare and clothing)—“How much more money [do I want] and what am I going to trade for it? Because we always trade something for it.”
What are you willing to trade for more money? And is that money what you really want?
As I previously noted in the memo “Beware of Stuff,” we should be wary of deluding ourselves into thinking we need more than the square feet in which we’re currently living—assuming we’re fortunate enough to have a home or an apartment.
Do we need a shiny new Tesla Model S because it’s good for the environment? Beautiful car in my opinion, but tough to make a case for it. Want, yes. Need, no. And are we willing to trade time away from our kids for work to pay for that luxury?
Perhaps doing so may make sense if you’re a car enthusiast. Just be sure you know what you’re giving up for that indulgence. More than just money might be sacrificed. Be sure you’re making fully informed, conscious decisions.
Remember those hidden choices we discussed earlier? What messages are you sending to your kids? What are you willing to trade for your wants?
Consider doing a stuff inventory reduction with your family. A good starting point is Marie Kondo’s KonMari method detailed in The Life-Changing Magic of Tidying Up. Or just complete a cutback for yourself, and show your child how much stuff you’ve eliminated and donated to charity. Have your child join you at Goodwill when you make the donation. Look for an opportunity to help with her own stuff inventory reduction.
Research strongly suggests that kids learn by observing their parents’ financial behavior. Accumulation of stuff is a financial behavior of which we need to be aware. It has an impact.
If you liked this excerpt, then you might like my book. It’s currently available on Amazon.
— 3 —
Stealth “Scamazon”: Flying under the radar is a crafty way for a pilot to avoid detection in enemy airspace. Recently, Clark Howard, a consumer advocate and one of my favorite humans, alerted his podcast listeners to an Amazon scam using a similar tactic.
These particular scammers capture your account information and then make numerous small-ish purchases rather than break-the-bank ones. (Pretty sneaky! 😯) In these scenarios, we’re like the radar operators who can see only the planes that are on their screens.
So to catch these stealth bombers, we need a different tactic.
Reviewing expenses regularly, a simple money-smart behavior that I offer in this essay as a good alternative to budgeting, is that strategy.
Because in our world of frictionless online purchases and ongoing subscriptions, a leaky money faucet can drain our reserves even faster than an under-the-radar aircraft.
Remember those “invisible choices” from last week’s newsletter? (I called them “hidden choices” in my above memo.) Let’s make sure to shine a light on them and guard against future “scamazons” by sharing money-smart tactics with our kids.
And, as always, 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.
Sources for Section 2:
- “How Seth Godin Manages His Life-Rules, Principles, and Obsessions.” The Tim Ferriss Show with Tim Ferriss. The Tim Ferriss Blog, February 10, 2016, https://tim.blog/2016/02/10/seth-godin/.
- Kondo, Marie. The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing. Berkeley: Ten Speed Press, 2014.
- Drever, Anita I., Elizabeth Odders-White, Charles W. Kalish, Nicole M. Else-Quest, Emily M. Hoagland, and Emory N. Nelms. “Foundations of Financial Well-Being: Insights into the Role of Executive Function, Financial Socialization, and Experience-Based Learning in Childhood and Youth.” The Journal of Consumer Affairs 49.1 (2015): 21-22. See also: Ward, Scott, Daniel Wackman, and Ellen Wartella. “The Development of Consumer Information-Processing Skills: Integrating Cognitive Development and Family Interaction Theories.” Advances in Consumer Research 4 (1977): 166-71.
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