The Simple Dollar (20 page)
Authors: Trent Hamm
The path from childhood to professional success has been repeated and nearly etched in stone for the last thirty years. You’ve got to get excellent grades in high school and load up on Advanced Placement courses and perhaps a few extracurriculars that look good on a college application. Then, you need to score a nice number
on the SAT and/or the ACT to get your foot in the door at a good school. There, you need to work your tail off earning a strong GPA so that you can earn a degree that will get your foot in the door with a great job.
This pathway was incredibly powerful in the past, when universities and workplaces had difficulty evaluating the true breadth of a student. Today, however, new skills are needed. Success in the global economy requires young people who stand out beyond the test scores and the old checklist of extracurricular activities. The world demands a more well-rounded skill set, one that goes far beyond classroom learning and branches into how they approach the world.
If you want your child to succeed in this new world, you might need to sacrifice a few sacred cows in the process.
In her book
Raising Financially Fit Kids
, Joline Godfrey identifies ten basic money skills that every child should have:
- How to save.
- How to keep track of money.
- How to get paid what you are worth.
- How to spend wisely.
- How to talk about money.
- How to live on a budget.
- How to invest.
- How to exercise the entrepreneurial spirit.
- How to handle credit.
- How to use money to change the world.
Godfrey suggests giving your child a taste of experience in each of these categories beginning as early as age four.
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What’s the best way to approach these goals? Give your child as many independent choices as you can when it comes to money decisions.
Give your child a small allowance independent of chores.
The amount of the allowance should be small enough that it will take many weeks worth of saving for your child to save up enough money to purchase a much-desired item.
Offer your child the opportunity to earn more.
Tie a financial reward to household work that goes far beyond the normal household chores the child should be expected to do—and encourage him or her to negotiate a fair price with you. Encourage your child to try out entrepreneurial endeavors, such as collecting aluminum cans, selling lemonade, or doing basic lawn care for others.
Talk about goals with your child and help him develop plans to reach those goals.
If your child wants a specific item, help your child come up with a savings plan to save for that item. It’s often useful to have a “savings jar” or a piggy bank in a place where he can visualize the savings, particularly when he’s young. As the child grows older, introduce him to other concepts—investing for the future and giving your money to a greater cause.
Give your child the tools for adult finance before he even leaves the nest.
Get your child a checking account, a checkbook, an ATM card, and, yes, even a credit card (with a low limit) at least a year before he leaves for college. Encourage him to use these items and understand how they work and how they affect daily life. Encourage your child to get a part-time job with limited hours to provide grist for this financial mill.
Don’t stop there, though. Such basic financial lessons are only the first element of a much larger toolset that you need to give your child to ensure his or her personal, financial, and professional success in life.
Joe stood there tentatively, unsure if he had the courage inside of him to reach for the gymnastics rings yet again. He had fallen twice in his attempts to grab onto the rings, and each time he had fallen to the ground as the rings slipped through his fingers. “Are you pushing him a little hard? He’s only three.” My mother looked at me inquisitively as we watched the boy from afar. My eyes never left my son as I watched him build up the fortitude to reach for the rings again. He stretched out his arms, took a brave leap, and suddenly found himself hanging in the air, a ring in each hand.
“Look, Daddy, I did it!” he shouted.
“You certainly did! Good job picking yourself up and trying again until you got it!” I shouted back at him.
June 2009
In her book
Mindset
, Dr. Carol Dweck argues that there are two basic mindsets that define how people approach the world. “Believing that your qualities are carved in stone—the
fixed mindset
—creates an urgency to prove yourself over and over. If you have only a certain amount of intelligence, a certain personality, and a certain moral character—well, then you’d better prove that you have a healthy dose of them. It simply wouldn’t do to look or feel deficient in these most basic characteristics.”
On the flip side of the coin is the growth mindset. “This
growth mindset
is based on the belief that your basic qualities are things that you can cultivate through your efforts. Although people may differ in every which way—in their initial talents and aptitudes, interests, or temperaments—everyone can change and grow through application and experience.”
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The fixed mindset is one of inadequacy, of a sense that you can never really stack up to your competition. Instead of actually attempting to grow, people with a fixed mindset simply “fake it.” Sometimes it works, sometimes it fails miserably, but in any case, individuals with a fixed mindset either get in way over their heads without the tools to dig out or are left behind.
A growth mindset is much different, as a person with a growth mindset believes that he or she
can
improve and measure up to any situation. People with growth mindsets constantly work not to create an appearance of having a certain set of skills, but to actually attain those skills, no matter what the situation.
The most valuable gift you can give your children is a growth mindset, as it will put them in a position to handle whatever challenges life throws at them. This leads directly to personal and financial independence, which is what we want most for our children—and for ourselves in our later years.
Here are three basic tactics a parent can utilize to encourage a growth mindset in their child:
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Don’t praise talent, praise effort.
“Parents think they can hand children permanent confidence—like a gift—by praising their brains and talent. It doesn’t work, and in fact has the opposite effect. It makes children doubt themselves as soon as something is hard or anything goes wrong.”
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Instead of praising a child’s talent and skill, praise his or her effort toward completing something. Instead of praising the result, praise the process he or she went through to get there. It’s more challenging, but it teaches that the real key to success isn’t in the end result, but in the journey to get there.
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Don’t attack attributes.
Your child will make mistakes and not meet your expectations quite often as he grows up. Your response should not be to criticize the child. If a child gets a poor grade,
don’t demean the child’s intelligence by calling him “stupid.” Instead, figure out what went wrong in the learning process. Go over the child’s work with him and find out where exactly the struggle is coming from. Similarly, if your child doesn’t succeed at sports, don’t call him “weak” or “uncoordinated” or “a loser” (such terms seem harsh until you witness the behavior of parents on the sidelines at a youth sporting event). Instead, encourage him to work on the fundamentals of his game. Don’t define your child—leave that up to your child.
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Never conditionalize love.
You should be the one source of unconditional love in your child’s life—your child
needs
that. You should provide comfort when they fail, but you need to allow them to fail, too. Your love is there to convince him or her to get up and take another crack at that challenge. By withdrawing that love, children will fold in on themselves and truly believe that they are unworthy of the love of the one person who should love them.
My father was never one for giving specific directions. When there were chores to be done, he would often describe them in the minimum amount of words and then wander off to do something else.
As a child, I found this incredibly frustrating. Sometimes, I would have only the vaguest idea of what needed to be done. Clean the garage? I had only the scarcest idea of where most of the stuff belonged. Prep some fishing lines? I didn’t know where the bait was or the line boxes were. Water the garden? The garden was at a twenty-degree slope, there was no hose within reach of the garden, and the different plants had different watering needs.
Later on, I found that my mischievous old man
was often vague on purpose
. “How else would you figure out how to figure out things?” he asked, channeling the spirit of Yogi Berra.
As adults, we have an enormous amount of personal latitude in our day-to-day choices. We are constantly presented with situations and problems without any sort of specific direction on how to handle them. The more opportunities we give our children to experience problems and situations without specific directions, the more training we give them on how to deal with day-to-day life.
As early as possible, start giving your child unspecific tasks to work on. Give him a blank piece of paper and tell him to draw you a picture. Ask him to put everything away in the living room. Tell him to write a story. Give him $10 when you enter the grocery store and tell him to plan tonight’s dinner (seriously).
Yes, they’ll mess things up. When that happens, compliment their effort in doing so and then walk through two or three things they might have done to accomplish it. Along the way, they’ll learn that there’s a great virtue in solving problems themselves—and this goes hand in hand with the money lessons that you’ll be teaching them.
Many people buy into the notion that the classroom is the primary source of education in a child’s life and that education ends when a degree is received. In the real world, however, people are often responsible for teaching themselves a wide variety of things, often very quickly, and the people who are best able to do this are the ones who succeed in life.
In short, your children need to master the ability to teach
themselves
things without simply asking you for answers.
Start simple. Have days where you identify items of a specific color when you’re out and about, or find items that come in sets of a specific number. Encourage your child to find these things on his own and identify aloud what they are.
As they grow, start a family reading time where everyone reads a book of their own choosing. Most books, particularly ones written for children, offer some sort of learning, but you can guide your children to better choices by talking positively about books that make you think. Fostering a love of reading encourages lifelong learning.
Go on explorative journeys. Go to a park with a tree identification guide and see how many trees you can identify—or use a rock identification guide, or a plant identification guide, or a bird identification guide. Have your child investigate the things he is interested in and encourage him to report back to you about it.
The more a person uses their faculties for learning new things, the easier learning new things becomes.
Independent learning is a lifelong skill that pays dividends over and over again throughout your personal, professional, and financial life.
Like it or not, the global economy is here to stay. Assuming that your child achieves even a small degree of professional success, he or she will be interacting with people from different cultures and assimilating cultural experiences as a fundamental part of their day-to-day lives.
Corporations, as well as universities, are waking up to this reality and actively seeking students with the tools to navigate this brave new world. To put it simply, exceptional experiences as a child grows toward adulthood are more important now than ever before.
Here are three ways you can give your children exceptional experiences that will help them grow as people while also providing them with outstanding career fodder:
•
Student exchanges.
A year-long international student exchange is a powerful way to give your child experience with other cultures in a way that will not only help him grow as a person, but provide him with a resume bolster that’s hard to beat. It provides an independent experience for your child (demonstrating that he is able to function without mom and dad’s guidance), while also immersing them deeply in another culture and in the nuances of another household.
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Large self-directed projects.
Many children join service organizations as a resume booster, but such groups are often filled with disinterested kids looking to sew up their college applications. Rather than follow that route, encourage your child to figure out an area that he or she is passionate about and then construct his or her own large-scale project to lead to completion in that area. Such a project teaches leadership, self-direction, and communication skills while also helping your child dig deep into his or her potential interests.
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A family sabbatical.
In her book
The New Global Student
, Maya Frost offers up this exceptional idea for immersing your child in another culture without disrupting their familial structure: a sabbatical in another country. “[T]he biggest reason [our family lived abroad for a time] was to experience life abroad with our kids and give them a chance to gain some global skills. If you don’t want to wait until your kids are high school or college age and you want to spend time abroad
with
them, a sabbatical can be a fantastic experience for the whole family.”
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This often works extremely well if one or both parents are self-employed or are teachers (as it’s often easy for teachers to find work abroad).
