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August 19, 2009 • Posted by Jon Gaskell

Am I Creating a Monster?

SmartyPig Boy with Money

Neale S. Godfrey, author of the book Money Doesn't Grow On Trees, writes: "Kids don't get it if you don't talk about." Mr. Godfrey is talking to people like me, and if I don't start listening, I'm going to have a big problem on my hands. My four year old daughter is a born shopper. And, as the Co-Founder of a company fighting everyday to bring sensible saving back into the public consciousness after decades of absence, I often worry that I enable her in the very habits I'm encouraging SmartyPig customers to break.

Like most couples these days, my wife, Sara, and I have been engaging in serious discussions regarding money. How we spend money. How we save money. How we use credit. We are pretty normal in that these conversations, while productive, aren't all that much fun. That said, we force ourselves to sit down and talk about money and we are pretty diligent about maintaining healthy attitudes about spending and saving. But when it comes to how we use money with regard to our daughter, all common sense flies out the window.

Our daughter has a piggy bank. And while it's our pocket change that goes into it, she understands the value of what we put in it and that she is rewarded when it fills up. We also require that she perform simple tasks around the house for which, when a series of days are filled in as "complete," she gets a reward. If she plays her cards right, does as she's told, and is patient, she usually ends up with a "treat" every few weeks or so. Problem is she never stops wanting or asking for the most trivial things, and we end up like this episode of Dr. Phil - indulging her whims, rather than being responsible parents who model fiscal fitness.

I tell my wife, "It has to stop." Then I tell her again the next time and the next. But I'm just as guilty as she is. From my perspective, these little treats are almost immediately disregarded and considered "junk." If I sound frustrated, it's because I am. Our unplanned spending on small gifts for our daughter has gotten totally out of control. But it's easier to just go with it than to say no. Who doesn't want a smile and the baby blues? But what are we doing to her as a result? What kind of habits are we teaching her? Every other aspect of her life is meticulously dissected. We are completely focused on turning this healthy, intelligent, productive kid into a healthy, intelligent, productive adult. Why can't we be the same when it comes to teaching her about money?

A recent issue of Better Homes & Gardens offered us three easy tips to begin the process of taking control:

Don't Forget Who's In Charge - Marketing machine or not - and good God if there isn't a Disney princess on everything! - You can say "no."
Talk About Spending Decisions - Don't lie and say, "I can't afford it." Explain priorities - even to four-year-olds.
Hand Some Over - Give your kids the power. Let them make the transaction. Let them see the difference between need and want.

So, can Sara and I do this? Do we need a chart that we make an "X" on every day we don't wimp out and take the easy road? From time to time, I'm going to let you know how it's going. And, of course, time will tell. We at SmartyPig are spending a lot of time these days discussing money and children and families. And while I pride myself on being a good listener, this is one conversation I'd really like to begin truly contributing to.

And I'd like you all to contribute as well. I'd love any tips you might have or anecdotes about your successes or failures in teaching your kids smart savings habits, just send them here jgaskell(at)smartypig(dot)com. We may even feature your ideas or stories on our blog. Thanks!

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