A Twelve Year Old’s Perspective on Money
August 01, 2012Last week, I wrote about how we as parents can learn about our own financial behaviors by observing our children. To demonstrate this, I asked my daughter Rachel a series of questions to help me gauge where she is and what she has learned about finances, presumably from her mother and I.
This week I pick on her 12-year old brother David. I asked him a series of similar questions to see how he would answer them and to learn more about the way he behaves with money. While some of his responses are similar, some are quite different and shed light on his personality and his attitudes about money:
Dad: Where does money come from?
David: The government.
Just like his sister: short and to the point. (So far no one has said it grows on trees so I’ve got that going for me.)
Dad: What do we do with money?
David: Spend it or save it. There are a lot of things you can do with it.
If you recall, Rachel articulated specific things like a house, a car and other things we need. David is not so precise. Rather than limiting what he uses money for, he expresses the notion that money gives us options – lots of options.
Dad: If you found $100 on the ground, what would you do with it?
David: It depends where I find it. If I found it at school, I’d give it to the principal. If I found it outside, I guess I’d spend it.
I admit I am proud of his response, and I believe him. David has a very deep sense of right and wrong, and he knows how hard someone must work to earn money. I imagine he would hesitate before he would “claim” found money as his own.
Dad: What would you spend it on?
David: Something that lasts.
Don’t you just love it when your kids get it? David is expressing his understanding of value. Many of us are willing to spend a lot of money on things that don’t last, but not David. If he spends his money on something, he wants to get his money’s worth.
Dad: Would you rather have $100 today or $200 a year from now?
David: I’d rather have $200 a year from now because it’s more money.
Dad: Okay, would you rather have $100 today or $200 five years from now?
David: $100 today, because I don’t have to wait as long to get it.
I imagine most kids would answer this question in a similar way. The idea of the time value of money is not an easy concept to grasp, but if we can find good examples of this, such as going on a short vacation this year or a big vacation to Disney World next year, it will help our children appreciate the importance of investing and delayed gratification.
Dad: If you didn’t have enough money to buy something you wanted, would you rather borrow it from a family member, a friend, the bank, or just save for it?
David: I’d rather borrow from a family member and pay them back later.
Nothing says “I love you” like an interest-free loan – I must admit I’ve had to “borrow” from the kids on occasion – but we never want money problems to get in the way of David and his relationship with his siblings (or any family member for that matter). It may seem playful now, but as they get older, nothing will split the family faster than a game of who owes who money.
Dad: What happens when someone spends more money than they make?
David: They go into debt.
Dad: Is debt good or bad?
David: It’s bad if you’re in debt, but if someone owes you that’s good.
(Who says you can’t learn anything playing Monopoly?)
Dad: Do you owe anyone right now?
David: No.
Dad: Does anyone owe you?
David: Yes, you owe me for cutting the grass.
As I said, nothing splits a family quicker than a game of who owes who. It is funny though how quickly kids can forget some things, but they never forget who owes them money.
I’ve learned a lot about David this week. I’ve learned that he gets easily annoyed when I ask him questions. I’ve also learned that he seeks value in the things he buys. That may explain why he prefers eBay to shopping at the mall. David appreciates that money comes from hard work. Oh, and in case you were wondering, yes, I did pay him for cutting the grass.