Teaching Healthy Struggle Finance to Kids – Episode 630

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[00:01] Welcome to the Prosperity Podcast. Prosperity thinkers on this podcast, we’re gonna be talking about money conversations at every age. And those conversations are going to look different from being very simple and using examples to action conversations. And they all need to have action. So Kim, take it away, lead us on this one. Well, let’s start at age three and you can even do this at age two. I’ve literally done this with my grandchildren that are that young and get them involved in the concept of spending, saving, and sharing. So it looks like this, all personal financial questions when you’re dealing with children can start with, would you like more freedom and responsibility? Now, clearly for your three-year-old,

[00:55] they’re not even gonna know what that is, but that’s what’s in your head, more freedom, more responsibility. So get a bunch of quarters or dimes or nickels, pennies, it doesn’t matter, get actual physical coins, get three different jars, spend, save, and share, and start to talk with them about what that looks like. Give them a dollar’s worth of quarters or dimes, work through the spend, save, and share environments, and it can even be layered into your discipline because if they’re acting up, they have to go get a quarter or a dime out of their jar and give it to you, and it has to come from the spend jar, right? So that’s about ages three to five or so. Now, at five to seven or so, you can start to add in what we call the three E’s,

[01:49] which are expectations, expenses, and expectations. Extra pay, so we don’t use the word chores and we don’t use the word allowances. So expectations are things that each child, age appropriate, does in the home because they live in the home. That is what they are supposed to do because they’re a part of that family. So it might be brushing teeth, making bed, reading a Bible quote in the morning, whatever it is that you want for that child to have as part of their expectations. Then the next, and it doesn’t really matter the order, is extra pay. So they do not get paid for expectations. They get paid for doing things extra. So for example, let’s say that an expectation is emptying the dishwasher,

[02:41] but extra pay is doing the hand dishes that sit on the sink that never can go in the dishwasher, right? The big pots or pans or whatever. So that’s an example in that five to seven range of extra pay. Well then the expenses for the five to seven-year-old are toys and trinkets, right? When you go to the grocery store and they wanna buy a toy or a trinket or a drink or what have you, do they have some of their extra pay money? And if so, then they have an expense and they can buy it with their extra pay money. I’ll tell you a quick story. There was a family that used to end up with half drunk Coke cans sitting around. So it comes out of the fridge, it gets three, four sips taken out of it, and then it sits.

[03:27] And that absolutely stopped when extra pay was required to have an expense of a Coke can. I loved hearing about it. So then you’ve got such a great family environment and really this expectations, extra pay and expenses space can be developed throughout all of the ages. So let me just skip forward to, for example, that maybe 13 to 15 or 16-year-old. Uber can be an expense. Maybe mowing the lawn is an expectation, but edging the lawn earns extra pay. Or maybe in the house, maybe doing their own laundry is an expectation, but doing the other family members’ laundry, moms, dads, maybe a younger siblings, is for extra pay. And then keep allowing them to tackle their own expenses. Is it lunch at school?

[04:35] Is it special sports shoes? Maybe an expectation is that you’ll pay the first $50 for their special sports shoes, but anything fancier that they want, that’s something that they can earn extra pay for and have as part of their expense. So this space of these three E’s, again, expectations, extra pay and expenses can be leveled up and leveled up and it will start to include all of the things around transportation. In fact, you could even charge them. I mean, this is gonna sound a little funny, but we have got to get our children to learn what it takes to live an adult life. And again, that question, would you like more responsibility and freedom? Well, to live an adult life, if you’re not gonna pay for Uber,

[05:22] then you’re paying mom and dad to drive the car or maybe an older sibling to get you to the sports practice or the party or whatever it is that you want to do. And so just continual leveling up so that by the time that the child turns 18 and can either literally move out of the home or maybe they’re going away to school or something like that, they have a very clear picture of the amount of money that it costs to live a life. They know what food costs are. They know what transportation costs are. They know what renting a home is. And I’m not suggesting that you have your children under 18 rent from you, but over 18, absolutely. And even if all you do is put that money in the account for them for later,

[06:08] helping them know what it costs to live a life on a daily and monthly basis is literally the best thing that you can do for them as a parent as you help them become financially competent. Oh, I love this. You said one thing where I started laughing and if anyone’s watching the video, if it pulls up, they’re gonna be like, why is he laughing about this? So I have to tell you a quick story. Michael is my middle son. He just turned 17 and he has a service business. It’s a junk removal business and he loves it. So two days ago, we were talking and he goes, I feel like a middle-aged dad now. I go, why? He goes, because I was dreaming all night about doing this and all the things that I had to do and I was planning out my day of what has to happen.

[07:05] He goes, and then I slept in until like 7.15 and I thought, oh no, I’m already behind and I just, I laughed because he’s getting a taste of it at a teenage years and it’s so critical that is the things you mentioned. When we start them young, they learn discipline and they learn all these pieces and what’s really strange and we didn’t talk about this but it’s with more responsibility and constraints the guardrails, that actually breeds more creativity. When you leave them with too much freedom and you give them everything, you actually take away their freedom. You’ve probably seen that happen. I just talked to a business owner the other day that has a very large company and she was tasking her accountant

[08:01] or in-house accountant to find the money for a particular project that they wanted to do. Well, as a teenager, it’s no different, right? If you wanna go to this concert, if you wanna go on this trip, if you wanna do this, whatever it is that you wanna do, find the resources to make it happen. Whereas adults, if we just write those checks, what are they learning? Nothing. What is their creativity being in any form of development? Nothing, because we’re making it too easy. Exactly, we don’t wanna make it too easy. I was talking with the teacher and she used a really, remember the technical term, but I think she used the term orchestrated frustration. And essentially what it means is she knows with each class where the ceiling is

[08:50] of where if they hit that ceiling, they have to have their brain sweat and work through it. Like it’s hard. And if you have frustration too long, the kid gives up. But if you don’t give them any frustration, they won’t learn. So I heard that and I thought, this is brilliant. It’s so good. I like the term healthy struggle, right? So this can be your two-year-old that can’t get out the door because their toy’s too big and they’re trying to figure out the physics, right? Or it could be your 10-year-old that has spilled something and is having to struggle cleaning it up because maybe it’s sticky or whatever. So they’re having to get out the, something that not only a rag and water, but something that’s actually gonna get the sticky

[09:39] or the oil or whatever it is up. And so these healthy struggles are what we want to guide our children through so that when they do go out on their own, not only can they think, oh, I need something besides water to clean this up, but they’re okay mentally dealing with a struggle. So they learn how to fix the problem, but they also learn how to deal with the struggle. And it’s mental healthy struggles, it’s physical healthy struggles, it’s spiritual and emotional healthy struggles, it’s relationship healthy struggles, all aspects of life. We want our children to go through a struggle under our guidance so that we can share with them and we can love them and help them through it so that they can do it on their own the next time around.

[10:37] Oh, so good. Kim, thank you. I wrote down healthy struggle. That might even be the episode name for this podcast. That was really good. For all of you listeners, if you have experiences or principles, activities, things that you have done as a family to create the healthy struggle, send those in. Let us know about them. Send the email to hello at prosperitythinkers.com. We would love to hear your stories. If you don’t have any and you’re looking to overcome a situation, meaning you’ve got a teenager that, you know, you know the potential’s there and you’re just on the precipice or it could be a grandchild or a young child, let us know. And we would love to talk about that on one of our future episodes.

[11:25] And I’ll remind everybody that we have a community for this space and it’s called Prosperity Parents. The material in there is powered by Dinner Table that did hundreds of families of research worthy materials, ideas, PDFs, videos, samples, discussions, you name it. And it is all there and available. There’s free material, there’s paid for material and I welcome you if you have children or grandchildren under the age of 18 or in today’s world, maybe even under the age of 30, this is a helpful place, prosperityparents.com. Perfect. Thank you, Kim. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit prosperitythinkers.com.