Have you ever wondered why you are so exhausted after an expedition through Costco or Home Depot? If you're like me, going into one of these box stores for even one or two items zaps your energy faster than any sleeping pill on the market. If we could bottle this effect, we would have a nation of very well-rested people! For years now I've just accepted this post-shopping lethargy as a fact of life without really understanding why it happens. Until recently.
A few weeks ago I was watching an interview with a man who shadowed Barack Obama for several weeks as part of the research he was doing for a book about the President. During the interview he mentioned that Mr. Obama intentionally only wears navy or gray suits because he has so many important decisions to make each day, he wants to reduce the amount of energy he spends on less-critical choices. At this moment it dawned on me that all of us have a limited amount of decision-making energy, which is why shopping can be so exhausting -- even on a quick trip through the store, we make hundreds of small decisions both consciously and unconsciously: What part of the store am I heading toward? Should I grab a cart? Oh, light bulbs are on sale -- do I need some? How many do I have at home? Is this the right aisle? And so on, so that by the time we return to our cars, we are entirely drained!
Great! Mystery solved, right? Yes, but then I started wondering about the total number of decisions I make on a typical day, and decided to try to count them one day. So how many did I make? No idea. I was so worn out from counting after the first hour, I gave up the quest. But upon reflection I did learn one thing -- most of the decisions I was spending my energy on are really unimportant. I mean really unimportant. Should I get dressed now or after I eat breakfast? Does this box go into the garbage or recycling? Do I want strawberry or raspberry yogurt? And the learning didn't stop there, because I also realized how much worrying was involved in many of these decisions. In short, there's a whole lot of noise in my head all day about things that don't matter.
So now I've made another decision: I will minimize the number of decisions I make every day and stop worrying that some sort of calamity will occur if I don't manage every last detail of our lives during every moment of every day. These details are just the "noise" that distracts me from the "signal" (to borrow from Nate Silver's book title "The Signal and the Noise"), or what is really meaningful. I am freeing myself from small decisions and worries, which will allow me to be more present and available for the big ones. How will I do this? I'll keep you posted -- I'm still deciding...
Tuesday, November 27, 2012
Wednesday, October 24, 2012
Learning to Say "Go Ahead!"
I have a confession to make -- I don't pay my kids an allowance. I know this may sound surprising given that something like 80% of kids in this country earn allowances for doing chores. This doesn't mean that my boys are off the hook, though -- they do daily chores, too, and are experts at setting the table, loading and unloading the dishwasher, sorting laundry, taking out the trash. I just don't pay them for it. My philosophy is that we are all part of the family and, as such, have a role in taking care of our house.
Without an allowance, the logical assumption would be that my husband and I buy everything for them. Well, not so much. We certainly provide everything they need and, for birthdays and holidays, some of what they want. But otherwise, they cover most of their own expenses now. Cool new Nerf gun? Ninja t-shirt? Mats for their "warrior training" space? It's all on them. For something expensive, like a new bike or the Trackers' Earth apprenticeship program that Sam is interested in, we negotiate a cost-sharing split -- sometimes it's 50/50, sometimes it's 80/20.
So how do they come up with the money to pay for these things? They have their own business. Last year, when Sam was 10, he started asking questions about jobs and how people earn money. We explained that most people work for someone else, but that some people start their own businesses. Around that same time the opportunity came up to participate in an Entrepreneur's Fair through our homeschooling group, so we signed both boys up immediately, thinking this would give them a deeper understanding of business concepts. They each decided what they wanted to make, purchased their own materials (with a loan from their parents), made their own products (holiday decorations), and sold them at the fair. They learned first-hand about cost of goods sold, labor, marketing and sales, loan debt (yes, we charged them interest!), and profit. But surprisingly, what they really came away with, was an enthusiasm for entrepreneurship. In fact, we barely made it to the car after the fair before both boys were brainstorming other businesses they could start!
Now, I should pause here for a moment because, if you know anything about our family, you're probably guessing that my husband and I had a significant role in encouraging this idea of starting a business, given that we've both have a history of starting our own businesses. You'll just have to take my word for it -- the idea never crossed my mind. Yes, I wanted them to learn about business, and apply some math concepts in the process, and Dave wanted them to see what it's like to really work. But neither of us had any ideas about an ongoing venture.
So, we followed their lead, and helped them brainstorm ideas for a couple of weeks, until we finally landed on the idea that is now the company called "The Can Men". Every Tuesday night the boys take their clients' trash and recycling cans to the curb, and then return them to their original places the next day after the trash trucks have come through the neighborhood. To start, they had to figure out their own pricing, develop their own flyer, and then knock on doors to find clients. Most of the people in our neighborhood signed on, and now the boys make a nice monthly income. Sam is technically the business owner, which means he took the lead on the sales, does the monthly invoicing, and earns 60% of the revenue. Tips (which they get regularly) are split 50/50. And best of all, there were no start-up costs!
Now that "The Can Men" has been in business for about six months, I know that what they're learning is immeasurable -- there's absolutely nothing I could teach them, or that a teacher in a classroom could teach them, that would compare. And whatever they choose to do professionally in their lives, whether they work for someone else or not, there's no doubt that they're forming the foundation for their choices now. If your kids have entrepreneurial leanings, or even if you're not sure, I highly encourage you to consider and explore the possibilities with them. There's no doubt that you'll be opening new doors into their future. Still not sure? Take five minutes to check out this video of young entrepreneurs talking about their families: Entrepreneurs Love Their Parents
Getting started may be as simple as just learning to say "Go ahead!"
Without an allowance, the logical assumption would be that my husband and I buy everything for them. Well, not so much. We certainly provide everything they need and, for birthdays and holidays, some of what they want. But otherwise, they cover most of their own expenses now. Cool new Nerf gun? Ninja t-shirt? Mats for their "warrior training" space? It's all on them. For something expensive, like a new bike or the Trackers' Earth apprenticeship program that Sam is interested in, we negotiate a cost-sharing split -- sometimes it's 50/50, sometimes it's 80/20.
So how do they come up with the money to pay for these things? They have their own business. Last year, when Sam was 10, he started asking questions about jobs and how people earn money. We explained that most people work for someone else, but that some people start their own businesses. Around that same time the opportunity came up to participate in an Entrepreneur's Fair through our homeschooling group, so we signed both boys up immediately, thinking this would give them a deeper understanding of business concepts. They each decided what they wanted to make, purchased their own materials (with a loan from their parents), made their own products (holiday decorations), and sold them at the fair. They learned first-hand about cost of goods sold, labor, marketing and sales, loan debt (yes, we charged them interest!), and profit. But surprisingly, what they really came away with, was an enthusiasm for entrepreneurship. In fact, we barely made it to the car after the fair before both boys were brainstorming other businesses they could start!
Now, I should pause here for a moment because, if you know anything about our family, you're probably guessing that my husband and I had a significant role in encouraging this idea of starting a business, given that we've both have a history of starting our own businesses. You'll just have to take my word for it -- the idea never crossed my mind. Yes, I wanted them to learn about business, and apply some math concepts in the process, and Dave wanted them to see what it's like to really work. But neither of us had any ideas about an ongoing venture.
So, we followed their lead, and helped them brainstorm ideas for a couple of weeks, until we finally landed on the idea that is now the company called "The Can Men". Every Tuesday night the boys take their clients' trash and recycling cans to the curb, and then return them to their original places the next day after the trash trucks have come through the neighborhood. To start, they had to figure out their own pricing, develop their own flyer, and then knock on doors to find clients. Most of the people in our neighborhood signed on, and now the boys make a nice monthly income. Sam is technically the business owner, which means he took the lead on the sales, does the monthly invoicing, and earns 60% of the revenue. Tips (which they get regularly) are split 50/50. And best of all, there were no start-up costs!
Now that "The Can Men" has been in business for about six months, I know that what they're learning is immeasurable -- there's absolutely nothing I could teach them, or that a teacher in a classroom could teach them, that would compare. And whatever they choose to do professionally in their lives, whether they work for someone else or not, there's no doubt that they're forming the foundation for their choices now. If your kids have entrepreneurial leanings, or even if you're not sure, I highly encourage you to consider and explore the possibilities with them. There's no doubt that you'll be opening new doors into their future. Still not sure? Take five minutes to check out this video of young entrepreneurs talking about their families: Entrepreneurs Love Their Parents
Getting started may be as simple as just learning to say "Go ahead!"
Tuesday, October 16, 2012
Finding Our Pond
Last week my husband sent me a link to a video that was not only funny, but touching as well -- I was actually crying tears of joy by the end of it. Maybe you've seen it, too? It's a video showing a group of ducks, rescued from an animal hoarder, experiencing water for the first time. At first they're not sure what to make of the pond, but then suddenly, they get it. It's as if they're thinking "Wow! My weird webbed feet and all these feathers totally make sense now!" (Click here to see it.)
I've been thinking about this video all week because I've realized it's a truly great metaphor for life. All of us need to find our pond -- the thing we're meant to do, the place we're meant to be. And our kids need to find their ponds, too.
Here's a great example. I have a nephew who most people would describe as "high energy." Or, as my husband puts it, "all thrust, no vector." He's a really sweet 8-year-old, with a genuinely bright mind, who only has two settings -- "on" and "off". This sometimes gets him into trouble, especially at school, although he never has bad intentions. He's just trying to manage all that energy in his body. He's tried out a few sports and liked them well enough, but this season my brother signed him up for football for the first time. After the first two weeks of practice I asked him if he was enjoying it, and his response was "Oooh, yesssss!" So yesterday we went and watched one of his games, and it was like watching one of those ducks in the video dipping his head and flapping his wings -- he was in his pond! For him, all of his physical energy and impulses suddenly make sense.
Unfortunately, as adults, it's up to us to find our own ponds -- nobody is coming to rescue us and take us to them. As a starting point, we need to think about some key questions: What are we really good at? When do we feel like life makes sense? Where are we at peace? The answers are different for each of us, and can be deceptively difficult to find. I don't think I even knew these questions mattered until I was well into my 20s, and even then I didn't have the first clue about the answers until I was in my 30s. The difficulty for me was that my parents both had very strong ideas about who I was and who I should be, so my true abilities and desires were buried. When I did finally start figuring things out, though --- ahhh, it was like a warm bath!
And even if we're still searching for our own ponds, how great would it be if we could help our kids answer these questions early in their lives? I don't mean the heavy "What do you want to be when you grow up?" types of questions, but the more basic questions that will help them answer the bigger ones later on. What do they enjoy doing now? When do they feel most happy and calm? For both of my boys, their answers are literally "being in the water" -- Sam loves swimming, and Ben loves diving. Also, Sam loves reading and needs some time alone every day; Ben is more social, and has a natural care-taking instinct. As they grow older, I'll need to help them continue to identify their personal strengths and loves so they can uncover their paths to fulfilling, joyful lives. The hard part of this is making sure to stay in the role of "facilitator" -- I can't find the answers for them.
So where is your pond? Is it a place, a hobby, a profession? How did you find it? And have your kids found theirs yet? Share it here -- maybe your story can help someone else find the place where they feel like flapping their wings...!
I've been thinking about this video all week because I've realized it's a truly great metaphor for life. All of us need to find our pond -- the thing we're meant to do, the place we're meant to be. And our kids need to find their ponds, too.
Here's a great example. I have a nephew who most people would describe as "high energy." Or, as my husband puts it, "all thrust, no vector." He's a really sweet 8-year-old, with a genuinely bright mind, who only has two settings -- "on" and "off". This sometimes gets him into trouble, especially at school, although he never has bad intentions. He's just trying to manage all that energy in his body. He's tried out a few sports and liked them well enough, but this season my brother signed him up for football for the first time. After the first two weeks of practice I asked him if he was enjoying it, and his response was "Oooh, yesssss!" So yesterday we went and watched one of his games, and it was like watching one of those ducks in the video dipping his head and flapping his wings -- he was in his pond! For him, all of his physical energy and impulses suddenly make sense.
Unfortunately, as adults, it's up to us to find our own ponds -- nobody is coming to rescue us and take us to them. As a starting point, we need to think about some key questions: What are we really good at? When do we feel like life makes sense? Where are we at peace? The answers are different for each of us, and can be deceptively difficult to find. I don't think I even knew these questions mattered until I was well into my 20s, and even then I didn't have the first clue about the answers until I was in my 30s. The difficulty for me was that my parents both had very strong ideas about who I was and who I should be, so my true abilities and desires were buried. When I did finally start figuring things out, though --- ahhh, it was like a warm bath!
And even if we're still searching for our own ponds, how great would it be if we could help our kids answer these questions early in their lives? I don't mean the heavy "What do you want to be when you grow up?" types of questions, but the more basic questions that will help them answer the bigger ones later on. What do they enjoy doing now? When do they feel most happy and calm? For both of my boys, their answers are literally "being in the water" -- Sam loves swimming, and Ben loves diving. Also, Sam loves reading and needs some time alone every day; Ben is more social, and has a natural care-taking instinct. As they grow older, I'll need to help them continue to identify their personal strengths and loves so they can uncover their paths to fulfilling, joyful lives. The hard part of this is making sure to stay in the role of "facilitator" -- I can't find the answers for them.
So where is your pond? Is it a place, a hobby, a profession? How did you find it? And have your kids found theirs yet? Share it here -- maybe your story can help someone else find the place where they feel like flapping their wings...!
Tuesday, October 9, 2012
Warrior Training
My family and friends are looking at me with expressions of bemusement lately, and a little confusion as well, when I tell them that we are now including "warrior training" as part of our homeschooling curriculum. For the past year and a half, our approach to learning has been pretty standard -- lots of math, reading, and history at the kitchen table, with a healthy dose of "real world" application. But after a recent conversation with a psychologist friend of ours about the psychology of boys and how to help them thrive, my husband and I decided to add a new "warrior" dimension to their education. So now, in addition to their regular school work and sports (diving, swimming, and martial arts), the past two weeks have also included: bouldering, archery, laser tag, Ninjitsu "night training", and an aerial ropes course (complete with ziplines!).
I'm assuming you have the same perplexed expression on your face that I've seen so many times recently. "This is school?" you might ask, or "Why are you doing this, exactly?" The short answer is because they're boys, and boys need physical challenges that not only allow them to release energy, but that also connect to their male spirit. Adventure and risk-taking are hard-wired into them, and showing them how to channel these impulses into healthy and "manly" activities builds their competence and confidence, and feeds their soul.
The physical benefits are truly secondary to the other types of growth we've already noticed. Building strength and endurance are certainly outcomes of this type of training, but they were already getting many of those benefits through their regular sports and play. The difference in the "warrior" activities is that there's an emotional component -- the boys are facing fears, exploring limits (physical and mental), and learning what it means to manage their emotions. As our friend put it, "The goal is to help them develop a sense of strength and capability, which will have benefits in all areas of their life, including school work and relationships."
And building this sense of capability is key for boys (and girls as well). Tony Deis, the founder of Trackers Earth, a wonderful outdoor education organization where my sons have attended summer camp for the past two years, recently wrote: "We need more educational settings where the teachers believe it is about helping kids become more capable, not regurgitating transient facts, search engine results or philosophy." For me, this means letting Sam and Ben think for themselves and figure it out on their own as much as possible, whether it's doing math or climbing a wall.
But before you decide to embark on your own form of "warrior training", I should warn you that it's not an easy path for parents (especially moms). Why? Because parental involvement needs to be minimal. If the activity is about us wanting them to do something, or protecting them too much, it won't work. The goal is to give kids room to make their own choices, fail (maybe even get hurt), and try again. Our job is strictly to give them an age-appropriate venue, and then back away. The upside, however, makes it totally worth it -- both of my boys have been fully thriving the past few weeks, and they even cleaned their "warrior rooms" without complaint!
I'm assuming you have the same perplexed expression on your face that I've seen so many times recently. "This is school?" you might ask, or "Why are you doing this, exactly?" The short answer is because they're boys, and boys need physical challenges that not only allow them to release energy, but that also connect to their male spirit. Adventure and risk-taking are hard-wired into them, and showing them how to channel these impulses into healthy and "manly" activities builds their competence and confidence, and feeds their soul.
The physical benefits are truly secondary to the other types of growth we've already noticed. Building strength and endurance are certainly outcomes of this type of training, but they were already getting many of those benefits through their regular sports and play. The difference in the "warrior" activities is that there's an emotional component -- the boys are facing fears, exploring limits (physical and mental), and learning what it means to manage their emotions. As our friend put it, "The goal is to help them develop a sense of strength and capability, which will have benefits in all areas of their life, including school work and relationships."
And building this sense of capability is key for boys (and girls as well). Tony Deis, the founder of Trackers Earth, a wonderful outdoor education organization where my sons have attended summer camp for the past two years, recently wrote: "We need more educational settings where the teachers believe it is about helping kids become more capable, not regurgitating transient facts, search engine results or philosophy." For me, this means letting Sam and Ben think for themselves and figure it out on their own as much as possible, whether it's doing math or climbing a wall.
But before you decide to embark on your own form of "warrior training", I should warn you that it's not an easy path for parents (especially moms). Why? Because parental involvement needs to be minimal. If the activity is about us wanting them to do something, or protecting them too much, it won't work. The goal is to give kids room to make their own choices, fail (maybe even get hurt), and try again. Our job is strictly to give them an age-appropriate venue, and then back away. The upside, however, makes it totally worth it -- both of my boys have been fully thriving the past few weeks, and they even cleaned their "warrior rooms" without complaint!
"The only way to make a difference with a boy
is to give him powerful experiences that speak to his inner life,
that speak to his soul..."
("Raising Cain", Dan Kindlon and Michael Thompson)
Friday, September 28, 2012
Richer Soil
The heather bush I planted in my front yard a few months ago is not doing well. It's not dying, exactly, but it's not thriving either. So I decided this morning to replant it in another location with more sunlight and better drainage -- hopefully this will be what it needs to grow bigger and produce its wonderfully fragrant flowers in the Spring.
Strangely, transplanting has been a theme for me lately, including with the kids (okay, and maybe with a few other plants as well!).
Ben has been on a gymnastics team for the past 18 months, training 8-12 hours per week, year-round, not including weekend meets during competition season. In short, lots of hours. He has been very dedicated to the team, loves the sport, and has formed some strong bonds with the other boys on the team.
But lately, he hasn't been thriving. He's been less and less excited about going to practice, and generally more anxious as he's progressed. I talked to his coach about it, to see if he had any insights, and I understood Ben's anxiety immediately. His coach is Russian, and a very accomplished gymnast (if you follow men's gymnastics, you've probably seen him on TV). If a boy has serious aspirations in gymnastics, this is the coach to train with. However, he's very, well, Russian. He doesn't believe in "smiling, or giving high-fives every time they do something well, because the judges won't either. They need to get used to that."
He has a point -- gymnastics is a sport of concentration and discipline, one of the only sports where points are taken away from the athlete. But Ben is the kind of kid who needs to know that he's doing the right thing; he needs positive feedback. Not for every little thing, of course, but an occasional pat on the back goes a long way. Just a few minutes into this conversation I knew that Ben had gone as far as he could in this sport -- the sport, and especially the coaches involved in it, are just too intense for him.
So, we made a change. What Ben loves about gymnastics is being in the air "flipping and spinning", which led us to diving. From the very first practice it was clear that this environment is completely different. The main coach and both of the assistant coaches are all positive and enthusiastic, while still demanding a lot from the divers. Ben is in heaven, and declares after every practice "I've found my sport!"
Ensuring that our kids are surrounded with positive and supportive teachers, coaches, and caretakers is one of the hardest, but most important, challenges of parenting. Yes, they need to learn to deal with all kinds of people, including difficult ones, but plenty of those people will show up along the way. While my kids are still young and forming, I strongly believe that settling for "good enough" in someone who will spend a significant amount of time with them is not good enough -- I need to invest the time in finding the healthiest situations and the wisest people so my kids can flourish and blossom to their fullest potential. And with Ben, I can already see the difference -- and I didn't even have to wait until Spring!
Strangely, transplanting has been a theme for me lately, including with the kids (okay, and maybe with a few other plants as well!).
Ben has been on a gymnastics team for the past 18 months, training 8-12 hours per week, year-round, not including weekend meets during competition season. In short, lots of hours. He has been very dedicated to the team, loves the sport, and has formed some strong bonds with the other boys on the team.
But lately, he hasn't been thriving. He's been less and less excited about going to practice, and generally more anxious as he's progressed. I talked to his coach about it, to see if he had any insights, and I understood Ben's anxiety immediately. His coach is Russian, and a very accomplished gymnast (if you follow men's gymnastics, you've probably seen him on TV). If a boy has serious aspirations in gymnastics, this is the coach to train with. However, he's very, well, Russian. He doesn't believe in "smiling, or giving high-fives every time they do something well, because the judges won't either. They need to get used to that."
He has a point -- gymnastics is a sport of concentration and discipline, one of the only sports where points are taken away from the athlete. But Ben is the kind of kid who needs to know that he's doing the right thing; he needs positive feedback. Not for every little thing, of course, but an occasional pat on the back goes a long way. Just a few minutes into this conversation I knew that Ben had gone as far as he could in this sport -- the sport, and especially the coaches involved in it, are just too intense for him.
So, we made a change. What Ben loves about gymnastics is being in the air "flipping and spinning", which led us to diving. From the very first practice it was clear that this environment is completely different. The main coach and both of the assistant coaches are all positive and enthusiastic, while still demanding a lot from the divers. Ben is in heaven, and declares after every practice "I've found my sport!"
Ensuring that our kids are surrounded with positive and supportive teachers, coaches, and caretakers is one of the hardest, but most important, challenges of parenting. Yes, they need to learn to deal with all kinds of people, including difficult ones, but plenty of those people will show up along the way. While my kids are still young and forming, I strongly believe that settling for "good enough" in someone who will spend a significant amount of time with them is not good enough -- I need to invest the time in finding the healthiest situations and the wisest people so my kids can flourish and blossom to their fullest potential. And with Ben, I can already see the difference -- and I didn't even have to wait until Spring!
Friday, September 21, 2012
The Most Valuable Inheritance
The next time I need a loan, I'm going to ask a kid. I read a survey this week, conducted by the American Institute of CPAs (AICPA), that most kids over 8-years-old receive an allowance at an average rate of $65 a month. What's more, almost half of school-age kids get paid for good grades, too. (What's an "A" worth? An average of $16.60!) It turns out that doing chores (89% of kids do) and getting good grades can be quite lucrative! (Note: see an earlier post on why I think paying for grades is a bad idea: Pay for Performance?)
And what do children do with this annual income of almost $800? (Not including money for good grades, or birthday and holiday money from the grandparents). Spend it! Only 1% of parents say that their kids save any of their money. This isn't surprising because most parents also reported that money is not a regular topic of conversations in their family. Other topics that are more frequently discussed: good manners, good eating habits, good grades, and staying away from drugs and alcohol.
It might be easy to think that "kids will be kids" at this point, and assume they'll learn about managing money when they get older, but this doesn't appear to be the case. According to the US Department of Education, high school students who took the National Financial Literacy Test in 2010 only answered an average of 76% of the questions correctly. In 2011 it was worse -- the average score was 69%. The Jumpstart Coalition, a group that also administers a regular financial literacy survey to high-school seniors, reports even more concerning results. On their 31-question financial literacy survey, the average score was 57% in 1997, and fell to 48% in the 2008 survey -- both failing grades.
So, maybe high school is too soon to really understand concepts like compound interest, inflation, and investing. They'll get it when they're in college, or when they get their first job, and have to pay their own living expenses, right? Not so much. In a 2010 Northwestern Mutual Life Insurance study on adults' general financial knowledge in the US, 69% of study participants failed the quiz. The SEC summed it up in their report on financial literacy, issued in September of this year: "American investors lack essential knowledge of the most rudimentary financial concepts: inflation, bond prices, interest rates, mortgages, and risk."
And the fallout of this lack of financial knowledge is actually frightening:
Clearly, we've got a problem -- a big one. And we can't just blame the economy for it. The truth is that we don't understand money, and this has a huge negative impact on our lives at every stage in every economic environment. But the good news is that we can learn, and so can our kids. Of course money and finance can be intimidating, and facing the bad news of our own situation is a difficult thing to do. I've found that breaking the process down into smaller steps helps me significantly -- I can spend 15 minutes a day doing anything. And if I focus on one thing per month (this month, for example, is "college savings" month), I don't feel so overwhelmed.
So where to begin? I started with taking the National Financial Literacy Test myself, to see where the gaps in my knowledge are (it was actually kind of fun since I didn't have to tell anyone how I did). Next, I looked around for information and programs I could use to learn more. Here are several that I like:
Why not begin right now? Take 15 minutes to check out one of these resources (or any others that you like), and choose an area to focus on this month. Next, involve your kids, too! Because whether or not we decide to leave our children an inheritance, ensuring that they can effectively manage whatever money they do have is the true gift.
And what do children do with this annual income of almost $800? (Not including money for good grades, or birthday and holiday money from the grandparents). Spend it! Only 1% of parents say that their kids save any of their money. This isn't surprising because most parents also reported that money is not a regular topic of conversations in their family. Other topics that are more frequently discussed: good manners, good eating habits, good grades, and staying away from drugs and alcohol.
It might be easy to think that "kids will be kids" at this point, and assume they'll learn about managing money when they get older, but this doesn't appear to be the case. According to the US Department of Education, high school students who took the National Financial Literacy Test in 2010 only answered an average of 76% of the questions correctly. In 2011 it was worse -- the average score was 69%. The Jumpstart Coalition, a group that also administers a regular financial literacy survey to high-school seniors, reports even more concerning results. On their 31-question financial literacy survey, the average score was 57% in 1997, and fell to 48% in the 2008 survey -- both failing grades.
So, maybe high school is too soon to really understand concepts like compound interest, inflation, and investing. They'll get it when they're in college, or when they get their first job, and have to pay their own living expenses, right? Not so much. In a 2010 Northwestern Mutual Life Insurance study on adults' general financial knowledge in the US, 69% of study participants failed the quiz. The SEC summed it up in their report on financial literacy, issued in September of this year: "American investors lack essential knowledge of the most rudimentary financial concepts: inflation, bond prices, interest rates, mortgages, and risk."
And the fallout of this lack of financial knowledge is actually frightening:
- According to the Center for Retirement Research at Boston College, of all Americans who were approaching retirement in 2010 (ages 55-64), 75% had less than $30,000 saved for retirement.
- Adults currently in their 20s already have an average of $45,000 in debt, in conjunction with an unemployment rate exceeding 12%.
- About 40% of American youth between the ages of 13 and 22 years of age report that they expect to inherit money from their parents, and therefore rank "saving for retirement" low on their list of financial priorities. However, only 16% of their parents actually plan to provide an inheritance (2012 TD Ameritrade study).
Clearly, we've got a problem -- a big one. And we can't just blame the economy for it. The truth is that we don't understand money, and this has a huge negative impact on our lives at every stage in every economic environment. But the good news is that we can learn, and so can our kids. Of course money and finance can be intimidating, and facing the bad news of our own situation is a difficult thing to do. I've found that breaking the process down into smaller steps helps me significantly -- I can spend 15 minutes a day doing anything. And if I focus on one thing per month (this month, for example, is "college savings" month), I don't feel so overwhelmed.
So where to begin? I started with taking the National Financial Literacy Test myself, to see where the gaps in my knowledge are (it was actually kind of fun since I didn't have to tell anyone how I did). Next, I looked around for information and programs I could use to learn more. Here are several that I like:
- AICPA Financial Literacy Program: The information here is very straight-forward and accessible, organized by age and topic. Great place to start!
- How To Raise a Money-Smart Child: This is a guide published by the JumpStart Coalition that all parents should read. It breaks down money topics into family-related categories, and provides ideas on how to talk to your kids about them along with related activities.
- Feed The Pig: This site is a little more "fun" with lots of multimedia, including a talking pig. I turned the pig off whenever I could, but I liked that you can take a quiz and personalize your own savings plan -- good tool for teens and younger adults.
- Tykoon: I just signed us up for this one. This is a new site for parents and kids that helps kids think about money and set goals in four basic categories: earn, save, give, spend. Each category has "cash" and "non-cash" options (like earning extra TV time).
Why not begin right now? Take 15 minutes to check out one of these resources (or any others that you like), and choose an area to focus on this month. Next, involve your kids, too! Because whether or not we decide to leave our children an inheritance, ensuring that they can effectively manage whatever money they do have is the true gift.
Saturday, September 15, 2012
Peeking at Heaven
Late yesterday morning the boys and I were getting ready to head out to do some errands, and I asked them to brush their teeth and get dressed. Sam, my 11-year-old, came into the kitchen a few minutes later declaring himself "ready to go". I immediately noticed he was wearing his favorite, very worn out pair of sweatpants, and said "You need to wear something without holes in the knees." He left, returning a couple of minutes later wearing another pair of sweatpants that clearly needed to be in the laundry. Slightly exasperated, I asked him to please find something that was also clean, to which he replied "Why do we have to get so dressed up?!" I paused, open-mouthed for a moment, as the absurdity of his question hit me, and then started laughing so hard I could barely speak. "Wearing clean clothes without holes does not constitute 'dressing up'!" I finally choked out, but I'm not sure he heard me because by then, he was laughing too.
Sharing a genuine, full-belly laugh together felt really good, and I realized I couldn't remember the last time we'd done that. Given my dual role as both mom and teacher, I tend to be the parent who focuses more on getting things done, making sure everyone gets to the right place at the right time. (My husband, who is genuinely funny, tends to be the more light-hearted one.) But yesterday reminded me how nice it is to lighten up sometimes, to just shift my perspective and see something other than the next thing on the "to do" list.
We were still giggling by the time we pulled out of the driveway in our "dressed up" clothes, and felt very close to each other the rest of the day. So now, instead of doing laundry tomorrow, I'm thinking dance party in the living room!
Sharing a genuine, full-belly laugh together felt really good, and I realized I couldn't remember the last time we'd done that. Given my dual role as both mom and teacher, I tend to be the parent who focuses more on getting things done, making sure everyone gets to the right place at the right time. (My husband, who is genuinely funny, tends to be the more light-hearted one.) But yesterday reminded me how nice it is to lighten up sometimes, to just shift my perspective and see something other than the next thing on the "to do" list.
We were still giggling by the time we pulled out of the driveway in our "dressed up" clothes, and felt very close to each other the rest of the day. So now, instead of doing laundry tomorrow, I'm thinking dance party in the living room!
"While laughing with your child
you'll take a peek at heaven."
~ Judy Ford
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