Comments on: Teaching Kids About Money http://momgrind.com/2008/03/05/teaching-kids-about-money/ Mon, 06 Sep 2010 17:55:25 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: MomGrind http://momgrind.com/2008/03/05/teaching-kids-about-money/#comment-159 MomGrind Thu, 27 Mar 2008 00:38:36 +0000 http://momgrind.com/?p=100#comment-159 "In teaching children the concept of delayed gratification we are teaching them to behave as adults. " So true. Thank you for your comments. Your approach is very refreshing! “In teaching children the concept of delayed gratification we are teaching them to behave as adults. ” So true. Thank you for your comments. Your approach is very refreshing!

]]> By: Denise Chumley http://momgrind.com/2008/03/05/teaching-kids-about-money/#comment-157 Denise Chumley Wed, 26 Mar 2008 23:08:03 +0000 http://momgrind.com/?p=100#comment-157 I also followed up the link, and seeing that it was written in 2006, I wondered what James Altucher had to say in retrospect. Still have to hear from him. I have little respect for economists and money experts, because much of what they say is based on the lie that money has value. Money in itself is a tool that aids the exchange of barter. What value is ecompassed in any item that is bartered? It is the natural resources required, many of which are finite, plus the labour to transform it into something else - see the story of The Little Red Hen and the Grains of Wheat. The other thing to remember is entropy, things degrade and this applies to the value of things too. How long can you save today's work? If it's housework probably the longest lasting thing is preserving excess produce from the garden, or sewing. Why do economists expect the value of money to last forever? It's not logical. It's like the old story of an heirloom axe that has had 6 new handles and 2 new heads. In Altucher's article he says don't worry about debt, capital gains will offset it. Where do those capital gains come from? If it has come from work improving a property that has value, but if it is because of shortage, such as finite resources such as land and oil, then you have to worry. In teaching children the concept of delayed gratification we are teaching them to behave as adults. The easiest mechanism to use is saving for something since there is constant feedback on how well you are going, but there are others. Learning a skill that is not inherently fun in itself is one way. So learning to play the piano and putting in the hours of practice to become proficient at it, or sitting down each day to learn a foreigh language are good examples. The pay-off in these cases can be years away and the improvements in skill level require the child to be reflective and self-monitoring and able to develop their own sense of gratification not based on praise or reward. I also followed up the link, and seeing that it was written in 2006, I wondered what James Altucher had to say in retrospect. Still have to hear from him.
I have little respect for economists and money experts, because much of what they say is based on the lie that money has value. Money in itself is a tool that aids the exchange of barter. What value is ecompassed in any item that is bartered? It is the natural resources required, many of which are finite, plus the labour to transform it into something else – see the story of The Little Red Hen and the Grains of Wheat.
The other thing to remember is entropy, things degrade and this applies to the value of things too. How long can you save today’s work? If it’s housework probably the longest lasting thing is preserving excess produce from the garden, or sewing. Why do economists expect the value of money to last forever? It’s not logical. It’s like the old story of an heirloom axe that has had 6 new handles and 2 new heads.
In Altucher’s article he says don’t worry about debt, capital gains will offset it. Where do those capital gains come from? If it has come from work improving a property that has value, but if it is because of shortage, such as finite resources such as land and oil, then you have to worry.
In teaching children the concept of delayed gratification we are teaching them to behave as adults. The easiest mechanism to use is saving for something since there is constant feedback on how well you are going, but there are others. Learning a skill that is not inherently fun in itself is one way. So learning to play the piano and putting in the hours of practice to become proficient at it, or sitting down each day to learn a foreigh language are good examples. The pay-off in these cases can be years away and the improvements in skill level require the child to be reflective and self-monitoring and able to develop their own sense of gratification not based on praise or reward.

]]> By: Denise Chumley http://momgrind.com/2008/03/05/teaching-kids-about-money/#comment-61 Denise Chumley Mon, 10 Mar 2008 04:58:40 +0000 http://momgrind.com/?p=100#comment-61 I think that you need to make clear what the pocket money is for. There is no point buying basics/essentials such as bus fares, and lunches, and then giving them spending (pocket) money and then also paying for impulse purchases. The system I operated under was: + the essentials were paid for by the household budget and one took a packed lunch or walked home for lunch + one could have a list of things that would come (if possible) as presents at Christmas and birthday + anything else came out of pocket money So if a child wanted a different chap stick or special shampoo, or takeawy food, anything, they paid for it themself. Sooner or later an item comes up that they desperately want that is more expensive than their weekly budget, and then you introduce the concept of saving, not borrowing against future allowance, but saving, delaying gratification for the item. + 10% should be saved in a bank account for leaving home - running away from home account. To get pocket money each week you had to present your bank book with the 10% from last week's pocket money deposited in it. If not, then you were helped to deposit this week's and last week's savings, before getting the balance of the pocket money. This was really important, they had to do this themself, and you were not really growing up, if you could not do this without help. These savings are different in that they are long term savings, and every time a youngster threatens to leave home, you can ask the question, fine, but have you got a job, and is there enough money in your account to pay the bond on an apartment and the first 6 weeks' rent? As they grow older you keep adding things such as a quarter's utility bills, and so on, until they do leave home either going to college, or hopefully with enough savings for the deposit for an apartment or house. I think that you need to make clear what the pocket money is for. There is no point buying basics/essentials such as bus fares, and lunches, and then giving them spending (pocket) money and then also paying for impulse purchases.
The system I operated under was:
+ the essentials were paid for by the household budget and one took a packed lunch or walked home for lunch
+ one could have a list of things that would come (if possible) as presents at Christmas and birthday
+ anything else came out of pocket money
So if a child wanted a different chap stick or special shampoo, or takeawy food, anything, they paid for it themself. Sooner or later an item comes up that they desperately want that is more expensive than their weekly budget, and then you introduce the concept of saving, not borrowing against future allowance, but saving, delaying gratification for the item.
+ 10% should be saved in a bank account for leaving home – running away from home account. To get pocket money each week you had to present your bank book with the 10% from last week’s pocket money deposited in it. If not, then you were helped to deposit this week’s and last week’s savings, before getting the balance of the pocket money. This was really important, they had to do this themself, and you were not really growing up, if you could not do this without help.
These savings are different in that they are long term savings, and every time a youngster threatens to leave home, you can ask the question, fine, but have you got a job, and is there enough money in your account to pay the bond on an apartment and the first 6 weeks’ rent? As they grow older you keep adding things such as a quarter’s utility bills, and so on, until they do leave home either going to college, or hopefully with enough savings for the deposit for an apartment or house.

]]> By: MomGrind http://momgrind.com/2008/03/05/teaching-kids-about-money/#comment-62 MomGrind Mon, 10 Mar 2008 04:10:47 +0000 http://momgrind.com/?p=100#comment-62 @computer addict @Jill: Teaching the concept of delaying gratification and saving is a huge challenge. @ Denise:I like the idea of depositing 10% of the allowance into a bank account. I also heard of parents asking their kids to put 10% aside for charity. Haven't tried that yet. @computer addict @Jill: Teaching the concept of delaying gratification and saving is a huge challenge.

@ Denise:I like the idea of depositing 10% of the allowance into a bank account. I also heard of parents asking their kids to put 10% aside for charity. Haven’t tried that yet.

]]> By: Jill http://momgrind.com/2008/03/05/teaching-kids-about-money/#comment-40 Jill Thu, 06 Mar 2008 21:33:32 +0000 http://momgrind.com/?p=100#comment-40 I agree with Computer Addict: if you had offered me $5 now or $7 in a week, I would take the $5. That link is interesting: it's unclear how we can teach our kids to save if we can't manage it ourselves, although - as you pointed out - sometimes the need to teach our kids helps us make the right choices as well. I agree with Computer Addict: if you had offered me $5 now or $7 in a week, I would take the $5. That link is interesting: it’s unclear how we can teach our kids to save if we can’t manage it ourselves, although – as you pointed out – sometimes the need to teach our kids helps us make the right choices as well.

]]> By: Computer Addict http://momgrind.com/2008/03/05/teaching-kids-about-money/#comment-38 Computer Addict Thu, 06 Mar 2008 19:45:07 +0000 http://momgrind.com/?p=100#comment-38 Telling them they'll get 40% more if they just wait, in a vacuum, doesn't teach anything - it seems capricious . For something like this to work, it must be done in the context of an actual savings account. Not that I have much hope for that, either, with Americans seemingly unable to save. Read <a href="http://www.thestreet.com/p/_rms/rmoney/marketanalysis/10292988.html" rel="nofollow"> this </a> for some sobering information. Telling them they’ll get 40% more if they just wait, in a vacuum, doesn’t teach anything – it seems capricious . For something like this to work, it must be done in the context of an actual savings account. Not that I have much hope for that, either, with Americans seemingly unable to save. Read this for some sobering information.

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