Luckily, there are usually second chances in life. As the leader of the Mississippi Council of Economic Education, I am often asked “what is the most important thing a parent can do as it relates to financial literacy and their children?” My standard response is that you need to teach them the habit of saving and what it means to use the economic way of thinking. While I took my oldest son, Ashton, to the bank to open a savings and checking account at a young age, we closed the savings account after several years when he was not able to keep the minimum balance required to avoid monthly charges. He worked as a soccer referee from the time he was 13 until he turned 20, which gave him the opportunity to earn income. Why he was not able to save money was my fault as I allowed him to use all his money when he wanted to, as opposed to insisting he save some of his money.
Now I am going through these same motions with my youngest son, Greyson who is 12 years old. I have a second chance so to speak. As of last weekend he is also a certified soccer referee. On his first day of work I could have filled out the W-9 for him, but insisted he fill it out on his own. My objective here was to help him increase his financial literacy. Check! While it would have been easiest for me to cash his checks for him then hand over the cash, I decided to take him to the bank to open his own savings account. We discussed the “right” amount for him to save vs. spend. While we were at the bank we asked questions about minimum balances, monthly fees and ATM cards. My objective here was to help him increase his financial literacy. Check!
We left the bank and headed to a big box store that sells technology from which I recently received a $20 reward certificate. I offered the certificate to Greyson as I thought he needed a new set of headphones. We entered the store and debated over the purchase of head phones, Xbox points or an iPhone case. “Hurry up, Greyson. I have other things to do,” I told him. We decided on Xbox points and syrup for the soda maker we already had at home. When we got back to the house, Greyson began spending his $15 Xbox card. He said, “This isn’t bad. I just got several video games for free.” At this point I thought to myself, “What? A chance to talk about the economic way of thinking? I’ll take it.” I began my speech about how it wasn’t free. There is a cost to everything and it is called “opportunity cost.” I asked him, what else we could have gotten with that $20 certificate. After I mentioned opportunity cost several times, he finally said to me, “Mom, stop using all your big words on me.” While he may have been tired of the lesson, I think he got the message. My objective in having this discussion was to increase his economic and financial literacy. Check!
While I did a pretty good job providing financial literacy education to my oldest son, I did not always practice what I preached. This second time around I pledge to do better. Thank goodness for second chances.
» Selena Swartzfager is president of the Mississippi Council for Economic Education. She can be reached at firstname.lastname@example.org.