“Working to help parents raise money-smart kids.”
Hello, friends!
Since the end of summer is here, there’s no time to waste.
Let’s jump right in to this week’s “3 Ideas to Share & Save.”
— 1 —
The “Envelope Surprise”: My editors for the message that I sent you last Thursday were incredulous as they read it.
Could the story I shared really have happened?
How did Sarah, who had just completed her Physical Therapy degree, not know she was $175,000 in debt? Unimaginably, she found out on her graduation day, when her school handed her an envelope with the numbers 1-7-5-0-0-0 written in it.
Curiosity piqued? Here’s the full post in case you missed it.
As unbelievable as Sarah’s story sounds, it’s true. You can listen to Ramit Sethi’s podcast about it here.
I relayed this humbling experience to underscore the importance of opening up a money conversation with our kids.
Of course, we’ll never know whether earlier financial discussions initiated by Sarah’s parents would have saved her from the “envelope surprise.”
However, such conversations almost certainly couldn’t have led to a worse outcome.
The more we can break down the taboos in our families around talking about money, the more we are likely to help our kids avoid anything like the “envelope surprise.”
We want to teach our kids to regard money as a tool they can use to craft lives of meaning and fulfillment. There need not be anything mystical about it.
When we communicate this message, we begin to set aside money taboos as well as help our kids become money-smart and, eventually, money-empowered.
Which begs the question…
— 2 —
What is money empowerment?: I ask all of my podcast guests what the term “money empowerment” means to them. Here are two answers that I thought were some of the best responses to this question.
“A money empowered person is an individual who uses his or her own money to enact their own values as opposed to doing with their money what somebody else wants you to do with your money.”
– Tim Kasser
Tim is getting at something I talked about in a recent newsletter — mimetic desire.
Mimentic desire is a concept the philosopher René Girard created to explain the way we’re often unwittingly drawn to ideas and stuff. We see what others want, and we assume their desires instead of developing or discovering our own. This process often happens unconsciously.
I think Kasser’s point is profound because it suggests that empowerment comes when we follow our own paths to uncover our own desires. We must filter out mimetic concepts and pursue what we find intrinsically fulfilling.
“Having that combination of financial literacy and curiosity. That you’re willing to, you know, figure out what it is that you don’t know and not be embarrassed about the fact that you don’t know or you might have made a mistake about it before and do the legwork to make a better decision the next time around.”
– Kelli Grant
Kelli’s definition reminds me of author Malcolm Gladwell‘s father. (Is he called Malcolm “Dadwell”? 😬)
Gladwell said his dad was always asking “Why?” to anything that didn’t make sense to him. If you’re curious and brave enough to follow “Dadwell,” then this approach has the effect of smoking out the depth of any point.
Gladwell’s dad was drawn to understanding by his insatiable curiosity. I think about him often. For although I have a ways to go, I’m getting bolder with my “Why?” queries. Admittedly, though, you run the risk of upsetting people whose opinions are formed with little forethought. 🤷🏻♂️
For even more money empowerment definitions, listen in to this Small Change episode of my Art of Allowance Podcast.
— 3 —
Our Five Pillars: To close, I want to share the five pillars that unify everything we do here at The Art of Allowance Project:
- Behavior change is key. The financial literacy deficit is not due to an absence of information. However, it is due to a lack of money-smart behaviors.
- Money smarts start young. We want our kids to build good money habits early so we don’t have to break bad money habits later. And though the best time to begin a money-smart journey is when our kids are young, the second-best time to start is now.
- Money-smart learning begins at home. While we support classroom-based efforts, we can’t count on schools to teach our kids money smarts. Financial literacy can and should begin with families, as direct experience with money is the foundation of money smarts and, eventually, money empowerment.
- An allowance is a great tool. An intentional allowance is not a handout. Rather, a purposeful allowance helps foster taboo-breaking money conversations and teaches kids about money through direct experience.
- Parents can confidently guide their kids to money empowerment. Despite past money mistakes, parents willing to journey with their kids on the path to money empowerment can learn along the way. In fact, we teach what we most need to learn.
I’ve enjoyed my own journey, which started with The Money Mammals for young kids, expanded to include The Art of Allowance for parents and now features Adolescent$ for tweens and teens. I also love working with credit unions, like our newest partners Garden City Teachers Federal Credit Union, Great Lakes Credit Union and Hockley County School Employees Credit Union, to bring our money-smart message to even more families.
And if you’d like to join me to begin a money-smart journey with your kids, then my new course starts on October 3rd.
Until next time, please enjoy the journey you are on.
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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