I’ve written in this space before about just how difficult it is to teach kids financial literacy. For every kid, that seems to have a natural ability to grasp the value of a dollar and a real determination to save as much as they can, there is another who has their money spent almost as soon as it touches their little hands.
In my family, my 9-year-old daughter, Lenina, is an example of the former, while my 12-year-old son, Matthew, falls firmly into the latter camp. As such, it was a desire of both the Honeybee and I to break Matthew of his impulsive spending habits.
A Portrait of an Impulsive Spender
Now Matthew typically scores between $50 and $100 for his birthday and during Christmas, but much to his chagrin, until recently the Honeybee and I would only let him spend half of his holiday and birthday booty; the rest was safely tucked into a (relatively) high interest savings account.
This was necessary in our opinion because our son (God love him) had absolutely no inkling about the value of a dollar. None. Or as us engineers like to say, zero point zero.
Let me give you an example.
When Matthew was around 9 years old I found out one day that he had taken ten Sacagawea golden dollars that he saved up from previous Tooth Fairy visits and simply gave them away to his friends at school. When I asked him why he gave them away, he replied that his friends thought they were cool and, besides, “it was no big deal because the Tooth Fairy would bring more of them anyway.”
The First Step to Recovery – Instill the Value of a Dollar
Fortunately, ever since I decided to teach my kids money management skills via the use of a ledger book, Matthew has become increasingly aware of the value of a dollar, especially at the lower end of the money spectrum. For instance, if he wants to treat himself to lunch at his favorite fast food restaurant, he now understands that it is going to cost him five or six dollars – and because of the ledger, he has a better grasp of what it took on his part (be it via chores or a gift) to earn that amount of money.
I’m not saying he has a complete understanding of the value of a buck. He still thinks my 1997 Honda Civic is currently worth “about $50,000.” But that is a lot better than last year when he thought it was worth as much as our house. On second thought, he might be on to something there. 😉
The Second Step to Recovery – One of the Hardest Things I’ll Ever Have to do as a Parent
“Okay, Len, so where are you going with this?”
Well, because my son has finally begun to grasp the value of a buck, the Honeybee and I decided it was time to let him spend any and all income he earned on whatever his little heart desired – and although I cannot speak for the Honeybee, it is my sincerest hope that he’ll blow a hundred dollars or two over the next couple of years.
That’s right. I hope my son fails.
It isn’t easy watching your child fail when you know you can prevent it; it is one of the hardest things we will ever do as parents.
Although Matthew is free to put any money he earns into savings, the odds are his cruelly impulsive spending habits just won’t let him. Not yet any way. But if the Honeybee and I continue vetting every purchase he wants to make from now until he reaches the age of majority, then I feel we will only be exacerbating the problem.
Therefore, over the coming months and years I sincerely hope my son decides to go against my fatherly advice and actually spends $100 on several boxes of worthless baseball cards that he’ll look at once before putting them in the closet never to be seen again, or $69.95 for that ridiculously fragile miniaturized remote control helicopter that he’ll crash into our living room wall the first day he gets it, hopelessly breaking it into a dozen tiny pieces.
And although it will deeply hurt me, every time he opens that ledger and sees the money that he has thrown away, I want him to feel the pain and buyer’s remorse associated with making those dubious purchases – and I want him to regret his hasty, impulsive, decisions.
Hopes and Dreams
For it is my hope and belief that if my son remembers the money mistakes he makes now as a kid, he will vow to try and do better next time. I hope that those mistakes will eventually rein him in and spur him to start taking a little more care with respect to his future purchases as an adult, when the implications are much more expensive and the impacts result in something more ominous than a silly stack of dusty cardboard or a harmless mishmash of miniature helicopter parts.
At least that is my dream. As a dad, I only want the best for my son.
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Len Penzo says
Thanks for the words of encouragement, MLR. Hopefully, my son is a quick learner. If he isn’t though, the Honeybee and I are determined to stay the course.
How is the progress? Got an update?
Len Penzo says
Matthew is still tossing his money away on frivolous items. I see absolutely no sign of progress yet. Still, we have no intention of interfering. It’s tough to watch, Jamie, but our resolve is steadfast.
J Roberts says
Good for you and your honey, if more parents were to do this I feel many more ‘kids’ would avoid basically starting out their adult life with a mountain (small or large) of debt. We did the same kind of thing with our kids when they were 12 and 10 (in the 80’s). Allowances based on chores and age, were to be used for ice creams movies etc., clothing up to $20 needed to be saved for. Anything over the the $20 mark, i.e winter boots, coats etc., came from the bank of Mom and Dad. It worked well for one kid, for the other, not so much. Oh well 50% is not to bad.
Len Penzo says
Thanks, J, for the vote of confidence. So far it looks like we are batting .500 too, although we’ve still got time to turn Matthew around.
I was a huge saver when I was a kid in the 70s; I just stuck birthday money in the bank. At one point, I had over $1000 in the bank, and it was more than my mother had at the time.
However, once I left the house and started college, and started working (actually, I started working at age 15) and got a credit card, forget it. I got into debt. It was like a switch of “Why Wait?” got turned on in my head, and boom!
I’m still recovering from that switch being turned on. It’s not easy. My point is, even if you’re a saver as a child, it’s not always true that you’ll stay a saver when conditions change when you’re older. Or vice versa.
J Roberts says
Julie, Hi, even if you go a little ‘off track’ at least when you had the groundwork did you find you had some of the tools to get the ship righted again. Some of the kids today get into that situation and have no idea what happened and how to start to fix it. All we can really do for our kids is give them some tools, ethically, morally and hope they turn into hardworking honest adults.
Giving your child empowerment and letting them fail teaches GREAT lessons.
I know from experience, so I think you are on to something! : ) And I have also encountered people who were kept from failure as kids who quickly fail once they get older. And they fail a lot harder and further.
The ledger is a great idea, too. Keep us updated on how all of this works out for you.
We had four, two girls and two boys. #3, the older boy, was like Matthew…allowance on Saturday, broke by Monday.
Now that he’s grown, he’s the savingest of the four, although he’s not the highest-paid. So you never can tell!
Len Penzo says
Thanks for the words of encouragement, Betty. We’re keeping our fingers crossed for Matthew.