Financial Lessons From a Six Year Old
August 15, 2012Today’s blog post is the last in a series of posts sharing the results of interviews I’ve conducted with my four children on the topic of money. As you may recall, my oldest, Rachel (14), is a saver, and looks at money as something to be used for necessities. David (12) is my value hunter, and prefers to buy things that have a lasting quality. Ethan (9) is more of a spender, willing to use any money he has to buy things he wants right now. Bringing up the rear is Jacob.
Jacob is six, and as the youngest of four and the son of a financial planner, he has a unique perspective on money. Whereas the first three simply answered my questions with rather short responses, Jacob had a tendency to answer my questions by asking questions of his own. Needless to say, it made for a rather interesting interview, but more importantly, it gave me a deep understanding of how he thinks and how I can use this knowledge to shape his financial behaviors in the future.
Here is my interview with Jacob:
Dad: What is money?
Jacob: I think money is money. I don’t really know.
Dad: Where does money come from?
Jacob: I don’t know.
[At least he didn’t say mommy’s purse or the money tree.]
Dad: What do we do with money?
Jacob: Spend it.
Dad: What do we spend it on?
Jacob: Food and stuff that we need.
So far it’s what you would expect from a six year old. He knows money is important because we buy things with it, and in particular, he mentions “stuff that we need.” I can only imagine what a six year old would consider a necessity, but it’s a good start.
Dad: If you found $100 on the ground, what would you do with it?
Jacob: Well, I’d bring it home and give it to you and mom to see what you guys could do with it.
Dad: What do you think mom and dad would do with it?
Jacob: Either throw it in the trash or give it to somebody or give it to one of your sons.
I guess when you’ve been told not to pick up pennies off the ground because they are “dirty” it would apply to $100 bills as well. When Jacob says “give it to somebody,” it could mean that we give it to the person it belongs to or give it to somebody in need. Susan and I have tried to teach our children the importance of honesty and charity, and it’s nice to know that our six year old sees that. Of course in Jacob’s world, someone who needs it might be “one of [my] sons.” (I wonder which one.)
Dad: Would you rather have $100 today or $200 a year from now?
Jacob: Is a year seven weeks or is a year 365 days?
Dad: It’s 365 days.
Jacob: Then I’d rather have $200 a week from now.
Did you just see that? My son pulled a bait and switch on me.
Dad: But I asked if you would rather have $100 today or $200 a year from now, not a week from now.
Jacob: Which one is shorter? Oh wait, a week would be shorter, but I pick a year. Dad, how much money do you have?
When did I become the interviewee?
Dad: I have more than $100.
Jacob: Do you have more than $200?
Dad: Yes.
Jacob [surprised]: You have more than $200?
Dad: Yes.
Jacob: Then, what’s a month?
Dad: 30 days.
Jacob: And a week is 7 days, right? And a year is 365 days.
Dad: So would you rather have $100 now or $200 a week, a month, or a year from now?
Jacob: $200 a week from now.
Dad: Why?
Jacob: Because I get more money and I have to wait less than 30 days or 365 days.
Dad: How many days would it take before you decide to take the $100 today?
Jacob: If I had to wait 350 days, I’d take the $200, but I don’t want to wait a year.
My six year old is a negotiator (which is probably the only way he can survive as the youngest in a house with four children). He has decided that 350 days is the longest he’ll wait to collect his $200, but he’ll try to get it sooner if he can. This is one of the fundamental principles of negotiating—knowing what your final offer is and attempting to get a better one. He’s tried honing this skill at dinner and bedtime but without much success. As he gets older, I’ll teach him how to use this skill in a more productive way.
Dad: If you didn’t have enough money to buy something you wanted, would you rather borrow it from a family member, a friend, or the bank, or just save for it and buy it later?
Jacob: One simple question: isn’t taking from the bank stealing? I’d wait and save up for it.
Dad: Can you put money in the bank and take it out later?
Jacob: I know you can put money in the bank, but I don’t know if you can take it out.
Dad: It’s like your piggy bank.
Jacob: I have 500 cents. That’s five dollars, right?
Obviously I need to have a future discussion with my son on the basics of banking.
Dad: How do you make money?
Jacob: By doing work, then they might give you money or not.
Dad: Would you be willing to work without getting paid?
Jacob: Yes.
Mental note: the boy works for free.
Dad: So, if you work for free, how would you buy food and stuff you need?
Jacob: I would save up for it.
Dad: How are you able to save money if you work for free?
Jacob: If I worked for someone who was old, and had a cane, I would not make them pay me, but if they were not old like you, I’d only work if I get paid.
Well, I’m glad my son doesn’t think I’m old.
Dad: What would you do with the money you are paid?
Jacob: If I were a son and I got paid, I’d get a toy if I could, but if I was a grown up working for someone else, I’d spend it on food and things you need to stay alive.
Dad: What happens if someone owes you money but can’t pay you?
Jacob: I would give them money, and if I worked for someone who was broke, I’d give them money so that they could pay the next person.
Dad: So if you knew someone was broke, would you share your money or keep your money and leave them broke?
Jacob: I’d share my money, because they might need it for medicine, or a car, or something like that.
As a parent, you can’t help but feel good when your children show such genuine compassion.
While the older children may have been inclined to give the “right” answer to their questions, Jacob gave answers straight from his heart, and it is from the heart that all our attitudes about life stem from. As parents, Susan and I have chosen to raise our family in a Christian household, and we believe the bible speaks extensively on financial stewardship. We want to help our children practice good financial behaviors so that they can be generous without compromise, but as hard as we try, if we don’t live out what we believe, our children may never learn these important financial lessons. You may never know what you are teaching your children until you take the time to ask. Maybe then you’ll see their true colors, and I pray that they’ll be as beautiful as the ones I’ve seen in my own four.