3 things I learned while teaching my kids money smarts
- There is Very Little that We Truly Need
My kids chide me about my old car — a 2002 Honda CRV. Following soccer practice, my daughter asked why I don’t get a new car (like that other soccer parent just did)? She proceeded to unwittingly undermine her case by removing her shoes and socks, revealing a fetid stench that reminded me of my days on the famed turnpike of my home state, New Jersey. I looked back at her, “You treat my car like a hamper and I certainly don’t need a new one of those.” Plus, the car still hasn’t hit 100k miles. It’ll probably run another fifteen years. I winked at her, saying, “Take care of this baby. She’ll be yours before you know it.”
Fact is, I’m not a car guy. That’s probably because my dad wasn’t a car guy either. My first car was his old beater that my friends and I affectionately referred to as “the heap.” I thank my dad, though, for not passing on the “car guy” gene. I spend my time figuring how to not drive my car. You may have heard of Los Angeles traffic? It’s all true! Any day out of a car is a better day for me.
It was actually in teaching my kids one of the core money-smart skills — distinguishing between needs vs. wants — that I began to reflect on my feelings about cars. There is so much “want” involved once you get past the basics of four wheels and a steering wheel. And really, beyond the obvious things — clothes, food and shelter — there really isn’t much else any of us need. Sure, there are certain “conditional” needs, such as a car for a long commute. But, they’re conditional because they can be remedied. For example, by changing jobs to shorten the commute, the car issue can be resolved. We convince ourselves that certain items are needs when they are not. Another good example — fancy smart phones. The same daughter who made fun of my car actually had some sage advice for me when I broke my iPhone and innocently noted that I needed to replace it. She looked at me sternly and quipped, “Dad, you don’t NEED an iPhone.” Touché, young padawan. Seems as though my kids have helped me as much as I’ve helped them.
- The Rush of Excitement You Get from Spending is Fleeting
The spigot of stuff opens quickly when you’re a parent. So much so that I even wrote a children’s picture book about it — Joe the Monkey and Friends Learn about Spending Smart — to try and teach kids to avoid stuff (Check out my CU Insight piece about reducing stuff). If you’re not careful, every nook and cranny of your house becomes filled with new items when you become a parent. You can tidy and donate as much as you want, but if you don’t address the heart of the problem — inflow — you’re destined to live a life of overwhelming plenty.tijji
When I moved to Los Angeles many years ago, I remember a new friend talking about the importance of having the “finer things.” A Movado watch. A $500 sportcoat. Corinthian leather car seats (seriously — remember when that was a thing?). I bought most of these things. Of course, you know I’m not a car guy, so I did avoid the last one. The purchasing “highs” were so fleeting. After about a week, the objects were part of my baseline existence. The thrill was gone. I certainly wasn’t any happier. In fact, I just started looking for my next hit. Talking to my kids and trying to gird them against the dangers of chasing the “retail rush” has increased my self-awareness and helped me dramatically reduce my own inventory of stuff. Thanks, kids!
- Goals are Powerful
Saving for a goal is a very important core money-smart skill your kids should learn. Teaching my kids to set and save for goals has helped them learn a powerful life skill. Doing so connects them with the growth mindset that Carol Dweck describes in her seminal book, Mindset. “Growth mindsetters” believe that achievement comes from effort. Our traits are not fixed. We can always improve.
Seeing these lessons carry over to non-monetary realms was gratifying. My younger daughter had saved money for a few goals. Then, she turned her goal-setting mindset to her chosen sport — soccer. She set a goal for her team to win the State Cup. Her team made it to the semifinals. It was an incredible run. Do you think falling just short of the cup taught her that goal-setting was a failure? Far from it. Getting that far — many rounds further than the previous year — was a massive accomplishment. Setting the early goal was key. Soccer is a team sport, so she didn’t entirely control the outcome. But, she played at the top of her game and setting the goal drove her high level of achievement. Seeing her goal written on the wall helped me recommit to my own goal setting. At the beginning of the year, I set a goal to finish a first draft of a book about helping families learn to become money comfortable. Now I’m just a few weeks from releasing that book.
Thanks again to my two wonderful daughters for teaching me as much as I hope I’ve taught them.