Mistakes Is Good

There may be no better teacher than a good, old-fashioned mistake.  For a time, my five-year-old daughter had been sinking all of her money into her Save jar after success with goal setting and managing her allowance effectively enough to buy a scooter, shoes and mini pottery wheel (long-term saving for a youngin').  Daddy was happy.  The lessons were working and it made good blog fodder.  But then, suddenly, she started plunking her allowance dollars into her Spend Smart jar.  What was this?!  Regression?  A big mistake?

Whatever it was, it was her choice and it remains to be seen whether she is making mistakes by shifting her focus from saving to spending.  What it certainly means is that Daddy has to heed his own advice to her - allow her to control her own money.  The purpose of the allowance is to teach her about money and making mistakes is part of that process.  We'll see what she does.  And after all, if she does slip up it's ok because, you know, mistakes is good.

-John

When Tough Times Affect the Kids

Read Sue Schellenbarger's article in the Wall Street Journal today. She has some terrific points about how we can talk to our kids about how the current financial crisis is affecting our families.

Here's a snippet:

"A 20-year study of 450 families with school-age children who were hit by a deep Farm Belt recession in the 1980s shows the psychological impact on kids can be signifcant and enduring. Rand Conger...at the University of California, Davis, and others, found financial woes often fueled anxiety, depression, behavior problems and poorer peer relationships in kids...The most successful families in Dr. Conger's study were those who 'managed to keep their priorities on the family itself,' remaining close and working together to solve problems, he says. To his surprise, kids didn't seem to mind that they lacked spending money."

-John