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Financial life lesson: Wanting, owing, and good financial judgment

Game ControllerAs you progress, together with your kids, through the financial life lessons we cover in Kids & Money, it’s often important to continually reinforce a key concept. In earlier lessons, we demonstrated some specific examples to explain why it’s perfectly OK— and often a very good thing indeed — to want something rather than owe someone else to acquire it. We discussed the basics of debt, that it is a “promise to pay” that brings interest along with it. Earlier still, we defined what it means to be “rich” and the concept of financial “breathing room.”

Today’s lesson will tie many of these financial concepts together, helping your kids to further reinforce the value of wanting vs. owing as well as practicing good financial judgment and decision-making skills.

Reinforcing wanting vs. owing: Elementary school age

So, if adding new promises to pay (debt) takes away breathing room, does more and more debt make us feel richer or less rich? Less rich, right! We do not look for more debt, because we know this. That’s the easy part. But debt seems to find us when we let our want for a new toy overwhelm our better judgement.

How then can we protect ourselves from… ourselves? We can do it by stopping to think for a moment. When you see something you want (and you do not have enough money for it) say this out loud: “I want is better than I owe.”

This means that it is okay to want. We all want. But we do not want to lose breathing room. When we owe, we lose breathing room. Therefore, “I want is better than I owe.”

Fun Factor: Challenge the kids to apply this sentence twice in the next week. If they meet the challenge, reward them!

Reinforcing wanting vs. owing: Middle schoolers

If adding new promises to pay (debt) takes away breathing room, does more and more debt make us feel richer or less rich? Less rich, right! So, it makes sense to avoid more debt.

How, then, can we avoid debt when we fix our sights on getting the newest version of our favorite game, one that we can’t afford on our own? We can do it by stopping to think for a moment. When you see something you want (and you do not have enough money for it) say this out loud: “I want is better than I owe.”

This means that it is okay to want. We all want. But we do not want to lose breathing room. When we owe, we lose breathing room. Therefore, “I want is better than I owe.”

Reinforcing wanting vs. owing: Teens/High schoolers

Child using SmartphoneLet’s think in terms of breathing room. I mean, we’re all trying to get “rich.” Our rich is accurately defined as having breathing room in our finances. And, if we want to prevent loss of breathing room, we need to limit our debt.

So — what do we do when we want the newest iPhone, or an accessory for our car, that we can’t yet afford? Simply stop and say out loud: “I want is better than I owe.”

This means that it is okay to want. We all want. But we do not want to lose breathing room. When we owe, we lose breathing room. Therefore, “I want is better than I owe.”

Tips and talking points for parents

How would your debt history be different if you learned to say this out loud at the point of purchase? I think we can all agree that you would have had at least a little more breathing room. Share some examples with the kids where this may have applied for you personally, and how it may have changed your decision.

Random fun

Birthday BalloonBlow up a balloon and pair off into teams of two (each team with their own balloon). With your hands behind your back, see which team can keep their balloon off the ground the longest using only their legs and head.

February 2020

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