There’s a new economic reality on the horizon and the old ways of spending and consumption are simply going to have to change. How do I prepare my kids for this new economic world when the message put out by the media continues to be one of consumption and spending? The overarching concept is that if you have to spend, do so by concentrating on value so that you truly get the most bang for the dollar. But how do I achieve that?
First, understand that some of the most effective lessons aren’t taught in a sit-down session around a table. The kids really are watching and taking things in – I was surprised several months ago to find that Middle mastered a particularly effective mimicry of one of my foibles – and to wait for the opportunity to handle things like a classroom is to lose opportunity. Because I believe that basic financial education is crucial for young people, it is something that I’m usually aware of as I spend time with the kids. The opportunities are plentiful as errands are run, trips taken or television is watched and when you see something, grab the chance to ask about it and explore it with them.
In our household, we’ve taken to watching periodic episodes of Pawn Stars and American Pickers and these provide great object lessons in finding value as well as negotiating. In the case of Pawn Stars, one of the big lessons is that value is often a subjective concept. You can read somewhere or hear that your collection of antique magazines is worth thousands, but it doesn’t mean that that’s what you’re going to get. Achieving that value depends upon multiple factors and some of those are probably beyond your control. Another significant lesson is that when a negotiation begins, the final value can be radically different from the number named at the outset – just because somebody names a number, it doesn’t mean that that’s what they will settle for. A corollary of the negotiation lesson is that in many cases, the people negotiating are influenced by factors far beyond purely monetary considerations. I know what you’re saying, but my great-grandpappy loved that item and it would be insult to his memory to take less than what I just demanded.
Second, effective teaching is repetitive and has to be revisited again and again. Teaching a middle-schooler about the mechanics of compound interest can be done in one session but teaching the real meaning of it will take multiple repeated efforts until most truly grasp the concept. Our trip doesn’t pertain to what you see and want and I don’t have the money for it. A debit or credit card in the wallet doesn’t mean that I have to use it. Since most folks don’t pay off their credit cards, does it make sense to purchase a Whopper Value Meal and continue paying for it over the course of the next three months? No, I only brought enough in the wallet for this and I don’t have extra for that. Because the kids are fairly persistent in stating when they want something, the opportunities continue to present themselves. As the older kids have aged, they’ll even speak about wanting something but immediately follow with the comment that it doesn’t make sense for one reason or another, or that they know that you won’t do so for whatever reason that you’ve taught over the years. It’s occasionally done in a way to instill guilt but I don’t usually feel guilt.
Third, don’t worry about specific details but stick to the general principles and hammer them again and again and again and again. Some of my comments have become a form of family joke but the reality is that the lesson really does sink into their bones and it’s visible on occasions when they don’t even realize that they’ve followed them. Yes, I drive an eleven year old minivan nicknamed Gladys the Rolling Dumpster but when you listen to the kids talk, some of the underlying philosophy leeches through as comments are made about it’s just a car, not a fashion statement. Bingo. The other aspect to this is that having a few hard and fast principles makes it easier to remember as well as explain. My memory’s just not good enough to recall all of LeRoy Jethro Gibbs’ forty-odd rules.
Finally, try to stay consistent and on message since kids are great at smelling out hypocrisy. There are times when I do veer from the norm financially and I try to remember to explain why I might be deviating from a usual principle. For instance, I’m not big into spending large amounts for kid’s and teen’s clothing since the kids are both growing and rough on the clothing and the kids are aware of my attitude. But when Middle and I went shopping for some clothing and waterproof hiking boots in anticipation of a winter campout, he was uncomfortable with the cost of a decent pair of boots and was surprised at my willingness to spring for them. It’s an investment, son. If you’re going to do more camping and hiking, then you need to actually take care of your feet and especially so in sub-freezing weather. This isn’t like a pair of Kmart sneakers that will get trashed sooner than later. And even though you’re almost guaranteed to outgrow these boots, I can pass them down to your younger brother since I can guarantee that he’ll be able to fit into them.
Not everything that I believe and teach is going to stick and they’re going to make some decisions that I find simply dumb. Hell, I make some decisions that some would find simply dumb. But the more that I can pass along to them to help prepare them for this new economic reality will hopefully make their life easier.