Wednesday, March 21, 2012

Teaching the Value of Money

Many thanks to Viva Magazine for permission to reprint this article from my March column.

As parents, we teach our children about a multitude of things including about money.  One very important key in teaching children about money is the concept of value.  What we purchase is what we value.  What we charge for a service or for the products we supply is value.  It is an exchange.  Teaching our children this concept can also be an eye-opener about our own beliefs about money!

A child can gain valuable experience working with money through an allowance.  Some parents require a child to earn his allowance through chores.  With the agreement that we have in our family, our daughter receives an allowance from which she purchases her “wants.”  She has unpaid responsibilities – folding clothes, feeding the pets, taking out the trash – as well as special chores she can do to earn money, such as washing the dogs.  She also has bake sales with her friend, and from their profits they purchase the supplies for the next sale.  Their first sale was funded by us with repayment made in cookies – a high value return on our initial investment!

Jane Cabrera of Center for the Advancement of Families ( teaches a course called Money Freedom™.  Jane, the mother of two teens, notes that “many of us learned in childhood that our value was tied to our ability to make money and contribute financially.  When an individual suffers some form of financial cutback, there is often residual suffering due to a belief that their value as a human being has diminished.  This is simply not true.  In raising our children, it is important to communicate to them that as a human being, their value is immeasurable and changeless.  At the same time, it is important to share strategies on the management of money, products and services as it is an important life skill.”

Children learn from what they see.  When a child observes parents seeking and providing value through an exchange of money, practicing strategies for money management, and talking openly about money rather than making it an unspoken secret, he learns the value of money.  He also learns that his value is much more than money.  This will serve him for a life time.

Monday, March 12, 2012

Kids Making a Profit

Many thanks to Parkland Life Magazine for their kind permission to reprint this article from my Child and Parenting column.

March is the month of “the wearing of the green,” and recently one mom wrote on Facebook that she was upset that her son was wearing a little too much green – seven dollars in profit – when he came home from school!  Her son, Jack (name changed to protect the innocent!), had purchased several dog tag necklaces at Target for $13 with money he had received over the holidays as a gift.  He wore the necklaces to school the next day, and a friend promptly said that he wanted them.  Jack revealed the original retail price, and he then offered them to his friend for $20.  His friend took the offer, and Jack came home seven dollars richer.  The rest is a highly charged Facebook dialogue with remarks ranging from “have him return the money” to “keep the cash.”  Mom felt conflicted over whether she should nix the deal, simply let it go, or call the other child’s parents. 

Here are a few ideas for handling situations like this:

Make it a conversation and suspend judgment.  If your child told you about the sale, listen and make comments that encourage him to talk. Here are examples of two potential conversations:

        Conversation A
Jack: “Bill bought my dog tag necklaces at school today for $20.”
Mom: “What were you thinking?  That is taking advantage of him!”
Result: Conversation ends
Conversation B
Jack: “Bill bought my dog tag necklaces at school today for $20.”
Mom: “Oh? Tell me about it.”
Result: Conversation begins

Avoid labeling.  When telling the story of what happened, watch the tendency to label your child.  Making a profit in a sale does not mean your child is becoming a swindler or is deceitful.  The discussion can be a great learning opportunity.  Some questions you might ask are, “How do you feel about what happened?  How do you think Bill felt?  Did he feel happy with the purchase or might he have felt misled?  How is he feeling about himself, about you and about your friendship?  Is there anything to repair, and what would you like to do to repair the situation?”               

Discover who owns the problem.  The big clue in discovering who owns the problem is identifying who raised the issue.  If your child brought it up by saying something like, “Wow, Bill bought my necklaces at school for $20 and I’m not sure that was the right thing to do” then it is his problem.  As a parent you then provide support and guidance in assisting him to find a solution.  He may decide to ask Bill to return the necklaces for a refund, have a conversation with him to see how he feels, or give part of his money back to make it more equitable.  He may even find that it was an OK deal after all.  Your job is to help him explore his feelings and restore the balance in his friendship with Bill.   

If you bring it up, it is your problem.  Examine the specifics about the situation that are a problem for you.  Do you think your child was unfair?  Are you afraid that he might be judged negatively by others?  Do you disagree with selling his belongings or with selling things at school?  Once you determine the specifics of your problem and how it impacts you, it becomes easier to talk about and resolve.  Use an “I statement” to express how you feel.  For example, you can say, “I feel uncomfortable about selling things to people at what seems to be an unfairly high price.  I would like you to give part of the money back to Bill.”

If the other child or his parents bring it up, it is their problem.  They may ask for a meeting with you, request the money back or some other solution.

Children learn about money and their influence in the world from events like this in their lives.  Keeping it a conversation – while avoiding judgment and labeling – and discovering who owns the problem can keep things conscious, encouraging and positive.