Teaching Kids Dollars & Sense

Here’s a good read from Money Magazine: Help! Our kids are driving us broke. The Millers are concerned about how much they’re spending on their kids, not to mention on their own indulgences — and how much their kids are still demanding. If you’re a member of Active Allowance, you’ll probably remember this scenario and have some sympathy for the Millers. Now if only they knew about our service!

You just have to like someone who signs her emails with “Sweet Regards”.

New Active Allowance Member Rebecca Thomas and her husband run Fudge By Design - an online service that decorates fudge to order and ships it across the US. I can already imagine sending my young fudge-a-holics some gourmet chocolate fudge, maybe with their picture on it, as a special reward for….oh, I’ll make something up.

At Harvey’s request, Rebecca has kindly offered Active Allowance members $1.00 off any 3/4 pound gift. Just tell them Active Allowance sent you. Full disclosure - we get no financial benefit from this …. just a warm happy feeling if you like it

OK……exulting here. I know it’s a breeze for web design firms to do something like this, or maybe most 20 somethings, but ….. me?

Leslie and I wanted to create an easy to follow “Setup and Process” video for our Chores and Allowance System and put it in our Help Guide for new members, but do it without breaking the bank. Here’s the result (a small size version):

Ahhhh, tres satisfying. Yes, I know. We could undoubtedly do a better job with pro talent …. and Leslie winces whenever she sees it and wants to do a reshoot …. blah, blah, blah ….. but not bad for a first effort, huh?!

Full disclosure - I’ve become pretty good over the past year with end-user software (praised be Apple for their Macs) but I am not an HTML/CSS/Javascript writing techie. That stuff’s for our Development team. If you’re interested in what tools I used to do this, let me know. You could probably do it too.

Still exulting here

In my previous career, I learned that I could do a presentation for five people in a room and have them walk away with five different misinterpretations of what I said. A few key conclusions:

1. OK. Let’s deal with the obvious first. There’s, uhhhh, something, errrr, wrong with my, ahem, communication skills.
   
   And now on to something more useful for you.
2. Repeat with a twist: It’s very useful to repeat a concept, but do it in a different way. You never know what might achieve the “Ah-hah!”. With that in mind, here’s a terrific summary of key lessons to teach your children about money by Leo at Zenhabits. Although I don’t know Leo, he’s obviously traveled down the same road as Leslie and me. Many of the ideas he conveys are identical to what we incorporate into Active Allowance. But perhaps he says it in a different way, so you might get a new Ah-hah today. It’s sure worth a good read!
3. Just because you said it, doesn’t mean they get it: Words are often not a very effective way to communicate. But until we can do mind-melds, we need to find multiple ways to teach our kids. That’s why it’s so important to have your kids learn by doing - a far more effective instructor of life lessons.

As a minor quibble with Leo’s post, I disagree with the black and white position he takes in #8 on what’s appropriate for how your children earn money (eg types of chores). In his defence, this issue is a big one, and it’s hard to do justice to it in a paragraph.

Nevertheless, there are at least two sides to that debate. I often liken it to politics and religion. People may have strong points of view, and arguments are often heated and sanctimonious on both sides. But in my mind, neither is right or wrong - it comes down to personal preferences, beliefs, attitudes, philosophies. I have my own strong point of view, but I accept the fact that others vote for different people (ok, I call them names, but I’ll fight for their right, yada yada).

With that caveat, Leo’s post is a great read

Here’s an interesting idea from one of our members - she created a Responsibilities Checklist for herself so she can model appropriate behavior for her children. This helps her show her kids that Checklists aren’t a punishment - that they’re really a useful tool you’ll use your entire life to help you remember to do things. What a great idea! I’ll have to try it out.

There’s a Children’s Chore carnival going on today at “Don’t Try This at Home”. Many bloggers are contributing their ideas to the age-old issue of kids’ chores. Here’s some personal learning and preferences from more than 3 years using our system with our 4 kids and discussing this with a great many Active Allowance members. I’ve tried to distill a ton of stuff down to just a few core thoughts…..really!….this is the pared back version! First, some key underlying principles, then the high level mechanics of how it works.

We’re a team

I love teaching our kids that we’re a team and we each have a role to play in making the family unit successful (fill in your personal definition of “successful” here). Mum and/or Dad may be the ones whose role is to earn income externally, and the kids’ primary role is to go to school and learn. However, there are many areas where the kids can share in the family effort and therefore earn their share in the family income.

Responsibilities, not chores

I see chores in a broader role - that’s why I instead prefer to call them Responsibilities. It’s not just about getting jobs done - it’s about the kids’ role in helping the family run better in an age appropriate manner. For younger kids, that might include lowering the family temperature in the morning by being ready for carpool with no nagging. For older kids, it might be more traditional chores like walking the dog.

Shoulds, wants and realities

We want our kids to help around the house because of their keen sense of appreciation for what we do for them…..they should do it because of their responsibility as a citizen of the home…..and because of a range of other intrinsic motivations…..but kids will be kids. Socialism is a warm, wonderful “wish” too, but it also doesn’t work in reality.

Behavior normally follows Attitude - you feel a certain way so you behave accordingly. But how do you create change? Dale Carnegie teaches something that seems counter-intuitive - that Attitude can follow Behavior. If you “Act enthusiastic (a behavior), you’ll be enthusiastic (an attitude)”. The idea is that if you want to feel a certain way, try changing your behavior - it’s a lot easier to change behavior than it is to change attitude…..and that a changed attitude will follow.

With Responsibilities linked to Allowance and perhaps other rewards, we may initially be working on the behavior part, but we can see in our children that with consistency and constant reinforcement, it’s showing up in our their attitudes as well (admittedly after several years).

Connecting Responsibilities and Allowance

This is a super-charged issue - experts and parents are hotly divided (and often sanctimonious) on whether allowance should be linked to completion of chores. Read the rest of this entry »

Wow. I know there’s a long, uncertain path to bring an invention from lab scale to production scale….but can you imagine the possibilities! Energy from salt water - I thought you might be interested. Check out this news item.

You’ve probably already heard a great many reasons for why an allowance makes sense for kids. Without going through the whole laundry list yet again, here are a couple of important ones worth emphasizing:

1. Creating many “Teaching Moments”: Unlike parental education about the birds and the bees (usually a one-time discussion; future attempts receive an “Eewwww!”), this is a subject that needs to be discussed on an ongoing basis over many years (e.g. making spending choices, saving for a goal, charity, etc). That means that parents need to create a sustainable system that will cause earning/spending/saving/sharing issues to arise and be discussed in a positive way…..the “Teaching Moments”.
2. Preaching vs Doing: It’s important to make this learning part of everyday life. I’m not sure about your kids, but mine seem to be impervious to “preaching” (especially from Dad), but they learn amazingly well by “doing”.

Just a thought for the day

OK. I’m exulting. We just had a fantastic time visiting Canada’s Wonderland, a huge amusement park near Toronto, with our 9 and 11 year olds.

You may recall Poor Boy - he’s still poor and rebelling. But his 9 year old brother is comparatively rich (he takes after our 13 year old).

When we went to the park, they understood that Mum ‘n Dad cover the cost of park entrance (includes rides) and lunch. But if they want to play arcade games, it’s on their dime and they’d have to write a check from their Active Allowance account as soon as they got home.

Well, Rich Boy chose to spend $5.00 throwing 2 basketballs….missing of course. But there wasn’t a peep nor a nay from Mum ‘n Dad. Not even when he spent another $4.00 trying to ring the bell with a sledgehammer. It was his money to spend (full disclosure - I REALLY had to bite my lip. What a colossal waste!!).

And not a peep from Poor Boy. He looked longingly at the basketballs…currently his 2nd favorite sport. But he knew he had no money, so he couldn’t play - he could only step back and watch. So sad…..but what a great teaching moment. Another step on the path to his understanding that earnings and savings might actually have some merit.

We spent over 6 hours at the park and didn’t hear one “gimme”.

As Hannibal Smith used to say on the A-Team TV show: “I love it when a plan comes together”

PS. Rich Boy was later heard to said to his brother on the way home “those games were a big waste of money”. And I don’t think he was just trying to make his brother feel better. Both kids learned something today!

Recently, we’ve seen many Quicken Kids & Money members join Active Allowance. A hearty “Welcome” to all of you!

It seems that, Intuit, the company behind Quicken, have shuttered the Quicken Kids & Money site, deciding to focus resources on their core corporate business lines.

We have to admit - we admired Quicken Kids and Money….and were also a little envious of their enormous budget. They did an outstanding job of helping parents teach children financial literacy. The world needs more of this.

And we also admired them because they espoused many similar views to our own. Quicken Kids & Money was skewed more towards advice, while Active Allowance is skewed more toward online, flexible tools…but the core philosophies are similar.

We know there’s a real need for this kind of service - our members tell us this every day. So we plan to continue to meet this need. And since our youngest is only 9 (we’re heavy users ourselves), we’ll be doing this for a very, very long time!