Childhood financial legacy doesn’t have to be destiny.
In North America, wealth management professionals are increasingly focused on helping children who grow up with abundance manage their good fortune. Why? Because we know growing up with money doesn’t automatically mean you’ll develop the life skills required to live as a money-smart adult. Well, isn’t the other side of that coin that children who grow up living with scarcity can absolutely learn how to become money-smart adults? We think so.
More ways to learn about money, fewer money-confident citizens? Why?
Despite there being more ways to learn about personal finance today than ever before, citizens are still struggling to create personal financial peace of mind. Financial institutions have educational opportunities for their customers. There are dozens of well-written books filled with good, actionable advice. There are budgeting and saving apps designed to help you “pay yourself first”. Employers are hopping on the get-financially-organized bandwagon. Fractional share ownership lets a much more significant percentage of the population participate in the financial markets. However, all these programs reach citizens when they are well into adulthood. And our money personalities are largely established by adolescence. To avoid typical financial pitfalls, you need to learn how to be “good with money” when you’re young.
How do we convince school-aged children that money-smarts are something they can successfully pursue long before they’re adult income earners, even if their family lives with scarcity? We teach them how to think before they buy. Skeptical? Hear us out.
Thinking before buying makes learning about money immediately helpful.
In a sea of ways to teach kids about money, thinking before buying is immediately helpful, fun, and accessible. It only takes minutes to ask and answer simple questions about typical youthful purchases before a young person spends their own money or anyone else’s. But those minutes help young people (and their families) avoid disappointment, reduce waste, improve family harmony, and protect the planet, all at once, at no cost. That’s a pretty big “return on investment”!
Avoid FOMO and buyer’s remorse all at once.
Does the habit of asking yourself a quick but not arbitrary set of questions when shopping really let you side-step FOMO and buyer’s remorse? Of course, our answer is “YES”. But don’t take our word for it. Test drive the DIMS- DOES IT MAKE SENSE?® SCORE Calculator yourself. It’s available without registration or crossing a paywall at GiftingSense.org. We’ve been teaching youth how to think before they buy for 9 years. We regularly observe that when young people slow down and truly look at their spending, they spend differently. We’re confident you’ll see the same thing in your classroom or home.
Children who live with scarcity need to “see it to believe it”.
What makes the experience of getting and using (at first basic) financial information to improve your life so powerful for children who live with scarcity in particular? They get to exit childhood, understanding that anyone can ask questions about money before making personal financial decisions without a member of their immediate family having a financial background, modeling, or telling them that’s the case. We agree: Kids need to “see it to believe it.”
By starting young, when the stakes are small, and the consequences of a misstep are even smaller, we get the “I can become good with money” ball rolling downhill. But the timing is critical because our money personalities (all the habits and beliefs we have about money that inform how we think and act with it for the rest of our lives) are incredibly stable and largely established by adolescence, which is why early financial education is so important.
An 11-year-old who gets comfortable with ideas like cost-per-use or the total cost of an experience (including safe transportation, snacks, and souvenirs) almost can’t help but become a teenager who asks, “What are all these deductions?” on their first summer job paystub. That teenager almost can’t help but become a young adult who shops around for the best employee benefits package, renter’s insurance, or place to live. Because once you discover that you can get and use financial information to improve your life, why…would you ever stop?
Kids aren’t the only ones who benefit from in-school personal finance lessons. Studies show even parents can experience increased personal finance confidence and knowledge from dinner-table conversations about “what happened at school today”.
In fact, we know caregivers have used the DIMS-DOES IT MAKE SENSE?® SCORE Calculator because their children test-drove thinking before buying in school.
Thinking before buying is also the easiest way to be a “planet protector”!
It’s also worth noting that forests, blue skies, and oceans will still exist if we all reduce our carbon footprint. Thinking before buying is the easiest way to do that. Two-thirds of us buy items or experiences we never fully use or appreciate. Imagine NOT using precious resources to produce or deliver those under-utilized and under-appreciated spends. Game-changer!
Have you got 5 minutes?
So, if you have 5 minutes, give the DIMS – DOES IT MAKE SENSE?® Calculator a try. Then, get your students or children to give it a try. It won’t cost you anything. No one will ever know. Except, of course, your future selves – who, with enough distance to take a backward glance, might conclude that the reason today’s school-aged children never had to dig out of financial pitfalls is because someone, somewhere, suggested they learn how to take a quick pause, before making a purchase, way back when they were 10-15 years old.
Childhood financial legacy doesn’t have to be destiny. Early, purpose-led personal finance lessons are the simplest way to ensure this.
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Post-script: We’ve asked behavioral economists to help us measure the positive impact of our thinking-before-buying workshops. Randomized control trials (the gold-standard approach to assessing program efficacy) are challenging to run with children in developed nations. It’s a tough sell, asking parents to withhold life-changing knowledge. And if you follow up a short behavior trial with a “knowledge catch-up,” you lose longitudinal insights.
