DIMS – Does It Make Sense?® Scores Help Kids Develop Good Financial Defence
Alex Rodriguez might be a hero to some people because of his baseball career. We certainly respect his three MLB MVP Awards. But because we are relentless advocates of early financial education, we really admire how he tackled improving financial literacy in the CNBC reality series “Back in the Game.”
In four episodes, A-Rod used his business acumen and reach to help former professional athletes and celebrities recover from some of the very habits we are hoping to prevent today’s children from ever developing. Mr. Rodriguez understands that earning a lot of money (practicing strong financial offense, using a sports metaphor we employ) isn’t enough. You also have to practice what we like to call “financial defense” by spending what you earn with a plan. In fact, calculating the DIMS SCORE® for a possible purchase allows young people to do exactly that: practice spending with a plan.
Check out Back in the Game, and discover just some of the sobering reasons why it is so incredibly important to teach your kids to practice strong financial defence, to think before they buy, while they are still living under your roof.
In Gifting Sense workshops, we ask students to explain how a baseball, basketball, football, or hockey game is won. “By scoring more than the other team” is the typical response. We then dig a little deeper and ask if there is more than one way to accomplish that. Of course, the winning team has to both score and prevent the opposing team from scoring. Winning teams need to be both offensive and defensive! Kids love this sports metaphor. It makes total sense to them.
Earning a large income isn’t enough to create financial security.
As the athletes and celebrities that A-Rod helps in his show demonstrate, making even a lot of money isn’t enough to guarantee financial peace of mind. Search history to learn about sports figures and celebrities who made more money than the average family could ever hope to earn – but lost it all through poor financial defense. If someone had gifted them a thoughtful spending tool back when they were young, perhaps their financial track record would be very different today.
Kids love our description of earning money as a “financial offense” and spending the money you earn (with a plan!) as a “financial defense.”
Getting children into the habit of thinking before buying is really just getting them into the habit of practicing strong financial defense. When kids use our DIMS-DOES IT MAKE SENSE?® SCORE Calculator to see if a possible purchase might make sense for them or their family; they are merely answering 10-15 very straightforward questions on a (free and safe) digital worksheet. Those questions cover everything from how much the item costs, including sales tax and shipping, to where the item they are interested in was made to whether or not it is a replacement for an item they have recently outgrown.
A higher DIMS SCORE® can be achieved, for example, by asking for an experience that will help a young person acquire a skill (e.g. Music Camp), by asking for an item that comes from a local store (which reduces environmental impact); or by buying an item from a manufacturer with a customer-friendly warranty. The answers to the questions are distilled into a number between 1 and 10, which can also help a young person understand if a wish-list item is more of a want (DIMS SCORE® 1-6) or a need (DIMS SCORE® 7-10). This is how quickly calculating the DIMS SCORE® for a potential purchase helps kids practice good financial defense.
If financial offense is making money, then financial defense is how you spend the money you make. Quickly calculating the DIMS SCORE® for a potential purchase helps kids practice good financial defense.
The DIMS SCORE® Calculator: A spending “speed bump”!
We started out suggesting that kids only ask for wish-list items that can generate a DIMS SCORE® of 8 or higher, but families have been establishing their own guidelines. Some allow for one purchase a year that doesn’t generate a DIMS SCORE® of 8 or better. Others only allow kids to ask their grandparents for gifts that can generate a DIMS SCORE® of 9 or better. Of course, the most important part of calculating the DIMS SCORE® for possible purchases is that children learn to get and use basic financial information to become money-smarter consumers.
Technically, a DIMS SCORE® of 8 or more means that a young person likely has enough information to have a relaxed, productive conversation about spending time with their caregivers. Buyer’s remorse is a function of speed; think of the DIMS SCORE® Calculator as a speed bump!
Spoiler Alert: Thinking before buying does NOT mean you never get to do or buy anything fun. All it means is you plan your spending to avoid disappointment, reduce waste, and help protect the planet. We all buy wants! The trick is to call purchases what they are and not to get into the habit of buying too many wants before our essential needs have been met.
If any of this sounds interesting, consider asking your kids to calculate the DIMS SCORE® for a possible purchase the next time they are thinking about buying something themselves, or placing it on a wish-list. See for yourself how taking 3 minutes to answer 10-15 questions can lead to increased family harmony, financial well-being, and a lower carbon footprint – not to mention the development of good financial defence – which is a gift that can last a lifetime.
Originally published in November 2015. Updated in early 2022.
