What Does Financial Literacy Have to do With Teens (and younger)?
Someone asked me the other day about the way we have financially incentivized our kids on our road to enabling-recovery. It was in a bit of a judgmental manner, slightly appalled that we would pay our kids for making their beds – a task that I agree should need no incentive. But as I’ve said before, and will most certainly say again, we set the bar limbo-low around here.
My response was, “You bet we pay them. Why not?”
My sassy question back begged lengthy dissertations on the merits of teaching a child how to be a part of a family, helping out without incentives – all of which I’m sure I could use. But, let me tell you what has happened around here since cash entered the picture.
Rather than take their money and spend, almost every kid has been growing their stash. One 13-year-old has her eye on a car that she’s saving for. And let me say, she is well on her way. I’ve noticed that when it comes to them spending our money, they’re eager and happy to jump right in. When it comes to spending their own money… not so much.
Case in point came the other day when the kids begged for a trip to Michael’s for crafty-type diversions. One had his heart set on a tub of Crayola Model Magic – not a cheap choice, but one that promised hours/days of fun. When we arrived, the tubs were sold out. His only apparent option was smaller, more expensive single packages. How did he know they were more expensive?
He looked at the price – not something he does if I’m paying. Then, he calculated out the amount equal to a tub (3 packages), did a quick cost comparison and quickly figured that the tub was the only way to go. But the shelf was empty.
When he came to me with his problem, I do what I seem to always do these days responded with, “go ask.” He paused for a moment, weighing the scariness of finding and asking an employee for help vs spending his hard-earned cash. It didn’t take long for him to find a nice guy who quickly jumped on the problem. Together they searched the shelves. Low and behold (or should I say “high and behold”),
the guy spotted a stash in a place we would never have looked (or been able to reach)!
The kid happily made his way to the register where his nice helper completed the young shopper’s transaction. Looking beyond my blurry photos (I’m trying to be incognito), is a snapshot of a kid who has worked hard for his money cares about how he spends it will take care of his purchase because he knows how much it cost.
The kid inspected his receipt when we got into the car and proudly announced how much money he saved by buying the tub. Then he commented on the tax – in a matter of fact sort of way. It made me thankful he’s aware that items cost more than their price tag.
I thought about our Michael’s run when I read USA Today’s article, Millennials Struggle with Financial Literacy, last week. Apparently, “studies show that a majority of young people in the United States have poor financial literacy, a trend that has been consistent over the past decade and shows few signs of improving. This at a time when young adults face a difficult job market and more personal debt, and yet must take greater responsibility for their financial future.”
It’s not hopeless, though. All we have to do is teach/train our kids… Like “John Whiting, a certified financial planner and partner at Moss Adams Wealth Advisors in Santa Rosa, Calif., (who) started teaching his kids the importance of working to earn money, saving and making responsible spending choices when the two were in elementary school. His son Andrew, 23, remembers getting his first job in catering at 15 and having to buy the family car when he got his driver’s license.
“I had saved money up, and they told me there was only one car I could get; it was the one they owned, and I had to pay them for it,” says Andrew, who graduated from California Polytechnic State University last May. He recently began a job as an account executive for Yelp in San Francisco, with his financial skills in tow: He uses an Excel spreadsheet to track his spending, is looking into getting his first credit card and plans to put about 25% of his pay into savings.” (That quote is a bit more inspirational than an earlier segment saying that “the reason kids on college campuses don’t know anything about money is because they have no skin in the game because their parents are still paying.” – eek!)
If you have a minute click on the article and take the financial literacy test. While testing your own knowledge, take a minute to think about how your kids would test … and how you’re equipping them to pass.
Hey… I’m right there with you. (Although mine do know how to compare price per ounce – it’s that “mean mom” thing, making them spend their own money and all). As we say around here at the MOATblog, it isn’t about being perfect, It’s about taking steps forward.
Thanks for walking the road with me.