Our fourth “Financial Writers Who Inspire Us” honoree is Carl Richards. Better known as the “Sketch Guy”, Carl is widely respected for his ability to make financial concepts easy to understand with simple sketch drawings “on the back of a napkin”. He has written two books and has a very popular column in the New York Times. This post is about what we believe are Carl’s most relevant messages for teaching kids about money: 1) Constraints are good, and 2) Simple solutions are often rejected merely because they require changes in behavior.
Constraints are good. Simple solutions only require behavior change.
In an August 2013 article called “The Beauty of Limits”, Carl explains very succinctly how “constraints can give us structure and help us make the most of what we have”. In his 2012 book The Behaviour Gap (Simple Ways to Stop Doing Dumb Things with Money), Mr. Richards does an equally concise job of explaining how even though the simplest solutions to problems are often the most effective, they are rejected because they require people to change well-exercised behavioral patterns. Read the last Chapter of The Behaviour Gap (“Simple. Not Easy.”), to better understand why we often choose complicated over simple solutions.
Changing behavior patterns when we’re young is easier.
At Gifting Sense, we’re turning shopping for typical childhood purchases into a tool for parents to teach their children how to spend wisely. So yes, we’re asking for a small but powerful behavior change: for youth to grow up thinking about how much they will use and appreciate an item or experience before they ask someone to buy it. But asking for thinking before buying to become part of how a family teaches their children about money when their money personality is still being developed feels like a smaller ask than requiring an adult to identify and then perhaps re-engineer money habits that aren’t serving them well – doesn’t it?
Tens of millions of natural opportunities a year to teach kids about money.
We live in a culture that celebrates multiple occasions a year by giving gifts. Why not turn the frequency of gift giving into a natural opportunity to learn about concepts such as cost-per-wear or the how much larger the total cost of an experience is over just the “price of admission”. (As adults know, experiences can cost many multiples of the ticket price to a concert or sporting event once the safe transportation, snack, and souvenir costs are all added up.) There are 50 million children in the United States and Canada alone between the ages of 10 and 19. If we can give as many kids as possible money-smarts with every birthday and holiday gift, it translates into tens of millions of opportunities a year to bring financial literacy to life. We can change the world!
The next time talk of birthday or holiday gifts comes up in your household, consider asking your kids to calculate the DIMS SCORE® for whatever it is they might like to receive. They can do it in a flash on any device, including a smartphone. You’ll experience increased family harmony. You’ll save time and money. You won’t be adding to landfills. And you’ll be giving your children the best gift ever: the habit of thinking before buying.
Simple, effective limits – the way forward.
We could continue to best guess what our kids might like and have our extended family members do the same. We could continue to spend time and money purchasing, returning, and discarding underappreciated gifts. We could let those millions of opportunities a year to bring financial literacy to life slip away. But baking SEL (Simple Effective Limits) into family gift-giving traditions seems the better way forward; at least, that’s what we think the “Sketch Guy” would say.
To learn more about our approach to early personal finance lessons, click on the pink or blue buttons below.
For Parents For Teachers Inspiring Financial Writers
