After an extended learning/shopping trip yesterday with kiddos, I think back to the spending (and overspending!) our eldest did yesterday. I am amused as I consider Easter weekend ahead. It may royally suck. My daughter might be miserable.
I’m like the opposite of the Easter Bunny.
Today, eldest will wake up for the first time with debt, on her beloved chocolate-filled Easter weekend, and I am readying for her misery, doing tasks around the house to earn money to pay me back.
Like any reasonable lender, I’ve given her two days to earn the $12 she spent over her means yesterday.
After learning the hard way about finances, and like the vast majority of us, rarely translating good financial advice into action or behavior change, I’m so eager to let my kids experience financial lessons, while young enough to leverage their still-forming synapses to help them build good habits, and yes, offload some housework.
Earning money for our 6 and 8 year old has been… interesting. Exhausting. We’re past the honeymoon period of, “look, small daughter! You can earn money for this! Dishwasher unloading time!” Now, it’s often more work for hubby and I than for them — tracking daily their earnings, gently reminding them to knock out tasks, figuring out what to incentivize. We even pay for tooth brushing — how often has poor dental health been expensive for you? Pay now or pay later.
My elementary-aged kids are learning to weigh financial decisions now, while the ramifications of mistakes are small, the successes are easy, and their earnings are not the only thing between them and a visit to the food pantry.
I hope that debt makes her cry real tears, and sear this painful memory into her brain, recalling it the next time she asks to go see Target’s latest footwear.
Before you judge my gleeful cackling, understand it’s part of the plan.
We’re teaching financial understanding, offering myriad opportunities to learn here, before they leave home.
Here’s some of what we lean on to set them up for success:
Work with the brain. It’s wired for success — but only if you understand how to leverage it.
Understand the role of dopamine. Example — why does your iPhone pull you in like cocaine when you’re stressed? It senses your heightened state, and knows your smooth-glassed iPhone is just a foot away… even the touch of your phone glass causes a significant dopamine surge. Up to 2,600 touches a day sound right to you?).
A few YouTube videos on the brain and dopamine, and you’ll understand more about you and your urges. Search for ‘neuroscience and spending habits’, or ‘behavioral science and stress’ to know more than your friends.
Take advantage of the brain’s deep need and desire to create habits.
Why do what you do? How can you work around your brain’s favorite donuts and overspending? Charles Duhigg writes about the glaring reality of cravings, behaviors, and how your chances of success or failure are fueled by habits.
Learning in action: allowance is not our go-to.
Our kids earn money, and can save or spend, just like they will for the rest of their lives. Why not start small and start now?
Give them real control.
I let eldest daughter wander Target, counting up prices, subtracting sales, deliberating on hats and shoes. Youngest and I trailed patiently (until hungry!) and let her have the space to figure out if she could fit her purchases into her budget.
They have skin in the game.
I avoid buying anything for them that’s not a need. But that line between need/want is tough. Did they need an Easter basket? Need new socks? Or really — is it just a want? They have socks. But not if the socks are in laundry hampers, in a backpack, in… wherever. If they want socks, they’re helping make it happen, whether laundry or a purchase.
As we planned our Costco list, youngest daughter, deliberating a purchase of new socks said, “I’ll have to see how much they cost.” I was elated.
Time will tell if they take better care of their toys if they waited to buy them after saving hard-earned cash.
Their own debit cards
Yup, these kiddos have debit cards, with their own names and even a photo on them. We currently use the Greenlight Debit Card for Kids, and can use them just like your normal debit card — online, Target, etc. The girls rocked self checkout yesterday for the first time.
So back to my original question — debt?
I haven’t let them ‘borrow’ till now. How will that affect eldest daughter? Will she feel the weight of the debt burden from those glittery new sneakers that she couldn’t really afford yesterday? Will it dim the joy of wearing them to church tonight? It might.
I hope it sucks some the joy out of her weekend.
If our efforts are successful, our kiddos will have significantly reduced their chances of divorce, obesity, and other major health challenges. They will have greater chances of mental health, and have the potential to be happier. What’s the biggest source of stress in your life? In the lives of the vast majority of Americans? Yup.
Because of little lessons on debt, she might avoid bigger mistakes. Perhaps her first business loan won’t be denied (try to get approved with your great ideas and poor credit score). Perhaps she’ll sleep better, fight with her spouse less, have hobbies instead of a second or third job in the evenings.
I hope she despises earning money she won’t ever see. I hope she regrets her shoe purchase, with every second of the chores she’ll slog through today!
Happy Easter, sweetheart. No springtime for you yet. Here’s a mop, some clean clothes to fold, and dishes to wash.
Heck, I might let you sell me your chocolate from the Easter Bunny.