If you think it’s hard to make the right money decision, try developing a way to teach your kids to make proper money decisions. Earlier this week, I listened to a YouTube video with Dr. Jordan Peterson and Warren Farrell about fathers’ role in children’s lives. While the video’s title has nothing to do with the conversation, it was great.
An Interesting Correlation
Dr. Peterson and Dr. Farrell pointed out the correlation between deferring gratification, i.e., having patience, and success. After sitting in hundreds of households and speaking to hundreds of families that wanted new cars and bigger houses but were unwilling to wait until they could afford these luxuries, I came to the same conclusion years ago.
Knowing what to teach is great, but how do you teach it? I’ve been trying to teach my kids patience but not succeeding. I’ve been attempting to teach Jokco’s “discipline equals freedom” mantra. Showing them that you work hard first, then play afterward. We’ve talked about it, but we have not done it well.
This video helped me learn from my mistake, and I hope it will help you too. We had the reward too far from the hard work. We’d often say, “If you get all your work done this weekend, you can play video games.” One of the comments Dr. Farrel mentioned was dads will often play with the kids and then say something to the effect of “Bedtime’s at 8; if you get your schoolwork done, we can use the rest of the evening to play until bed.”
This comment was eye-opening for me. When we delay the reward of a potential promise in the future, kids don’t always associate the desired behavior and the prize.
The dark secret here, I played a lot of poker when I was younger. Since I prefer winning, I also spent much time reading books. One of the books started by discussing how human intelligence is our ability to recognize patterns. We learn if I do A, then B happens. Some examples are:
If I smile at you, you will smile at me.
I won’t be cold in winter if I wear a coat.
If I eat, my stomach will stop hurting.
Most people do not do well at poker because the cause-and-effect relationship is delayed and spread over thousands of hands. The key to winning in poker, much like life, is making good decisions. The problem comes from the randomness of poker. You can make good decisions and lose or make bad decisions and win when looking at just a few hundred hands. It takes a long time to make good decisions and learn what to do. The reward is often separated from the action, so we do not see the pattern.
Reward Your Kids Immediately
Finance is often the say way. If you decided to start a 401k today, it might take months, maybe even a few years, before you feel like you’re building wealth. This delayed gratification makes many people quit or even not get started. They think, “What will $100 a month really do?”
If adults have a short view of the future, kids’ views of the future are even shorter. Telling a kid to do this today and you’ll get a reward next week doesn’t work. It feels like five years from now. Let’s be honest. As parents, there are many times we even forget we owe them the reward.
What we are teaching them is to avoid delaying gratification. We need to reward our kids immediately. Teach them to do the work and then get the reward.
One last note on this. The reward doesn’t have to be the final reward. You can use a sticker or IOU coupon to reward them and allow them to cash in later. Dave Ramsey talks about using a commission system where the kids have a “task list” for the week, and at the end of the week, you pay them for the tasks they complete. If you go with a system like this, “check them off” each day. Right after the kids complete the task, check it off. Let the reward be the celebration of checking the item off. This way, they will see the connection between the action and the reward. As they get older, the reward can come at a later time.
For informational purposes only. It is important to consult a professional before implementing any strategies or ideas.