Making Lemonade

Coins shimmered and clanged on the table as they rolled from the piggy bank. The family friend who was sorting the coins as I helped Acorn count them told him he was very lucky to have all that money.

“He earned a lot of it,” I said.

She watched as he showed off with a somersault between bouts of counting. Classic four-year-old behaviour when he’s been concentrating on a single task too long. “Earned it in the entertainment industry, did he?”

When I was three years old, my grandmother took me to a shopping mall and told me I could spend two dollars. “But remember,” she said, “we’re coming back tomorrow, and I’ll give you another two dollars to spend then. You can buy something today, for two dollars; or you can wait until tomorrow and have four dollars to spend.”

You can probably guess my choice, and you can probably guess my heartbreak the next day when I wanted to buy something that cost more than the two dollars I had left. I’ve never forgotten that lesson in fiscal responsibility. The habit of delayed gratification that she instilled in me that day has served me well for decades now.

The fact is, Acorn didn’t earn that money just by being a cute kid. I’ve been trying to give Acorn the same gift my grandmother gave me: a fundamental sense of what a dollar is worth, and what is (and is not) worth your dollar — along with a working knowledge of how to handle money, and spend or save it wisely.

The fact is that — my memorable anecdote notwithstanding — these lessons cannot be taught in a single conversation. Much as a child’s ability to read begins with reciting the alphabet by rote, and progresses over a series of years to understanding the sounds the written letters make, and then eventually from reading CAT to ANTIDIESTABLISHMENTARIANISM, a financial education needs to start when a child is very young, and be tended to as long as you are raising them. You cannot expect a 16-year-old to handle the money from their first job well, or expect an 18-year-old to use the credit cards they’re suddenly eligible for wisely, if you have not laid that groundwork well in advance.

To that end, I started teaching Acorn when he was two, as soon as he could count up to three objects reliably. Step one meant teaching him what money was, and the power it holds. So I gave him permission to buy one miniature car on each of our infrequent trips to a certain discount store. No matter how I was paying for the rest of my purchase, Acorn got a dollar bill to pay cash for his car separately.

It didn’t take too long for him to figure out exactly what a dollar was worth; and when he got a little older and started asking for other things, I played with the formula a little. Sometimes, he could buy just one car, or something else the same price. Other times, he could either buy a miniature airplane, or he could buy two cars. He would consider carefully which one he wanted at those times. Did he really want that airplane enough to give up getting two cars? I could almost see the gears turning as he made the decision.

This has been money well-spent. Aside from the lessons thus imparted, Acorn seldom asks for anything else at a store; and when he does, I can explain that it costs $5, or $20, and he can see that it’s too expensive: Not worth five cars, or twenty.

The next lesson has been and continues to be in saving for a goal… but I think that will be a subject for a future post.

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If you’d like more information on a topic related to this, just leave a comment on this post. I’ll be glad to tell you what I know.

If you’d like other resources, Capital One’s new site promises “to help families learn about money management skills, including talking to kids about money.” Full disclosure: I haven’t visited this site and cannot personally vouch for its quality. However, they did work with a consumer advocacy group to develop it.

I’d been considering writing about this subject for a long time, but a contest by Parent Bloggers Network motivated me to get around to it. I usually feel a bit wrong about letting a contest dictate the content of my site for a day, but in this case I feel it’s merely a bonus.