Tag Archives: Personal Finance

Are You Having Budgeting Fantasies?

A friend of mine recently confessed to me that she grew up with, wait for it …budgeting fantasies. Before you get in a kerfuffle over this, here’s  the story.

One of her parents would send her to the nearest store to pick up a box of cereal, bag of apples or extra milk. She would march 2 blocks up the hill  to the local grocery and shop for what was on the list. However, before she chose those items and walked back home, she created her own mental shopping list for playing house. When I have my own house, she mused, I will buy this and this, and this! Plus, she added the prices in her head to keep track of her spending. Eventually, she did go back home with only her family’s requested items in the bag! (She assures me that this was one of her very favorite things to do.)

You may not have experienced this in your family, but I am sure that you can see some advantages to allowing a child this independence, instead of dragging a bored, screaming child down yet another grocery aisle.

Video for 04.20.2009

Would you allow your child to assume responsibility for choosing one group of food for the family each week? Maybe milk or cereal? If you’re bolder, how about fruits or vegetables? Here are some benefits to consider:

  • it may increase their cooperation at meal-time
  • they might enjoy it
  • it will give them a practical application for arithmetic
  • it gives them a window into what their parents do with their income each month

Pick a popular food group, assign a dollar amount to it that you can live with – for better or worse, and try it out with your children.

Vegetables in a grocery store, Paris, France.

Vegetables in a grocery store, Paris, France. (Photo credit: Wikipedia)

Would your child eat more radishes if they chose them at the store?

Try it out and let me know what happens!


Filed under Learning About Finance

Delayed Gratification and the Cupcake ATM

When reading about delayed gratification, the sweet item that usually comes to mind is marshmallows. You know, the famous Stanford study on children and delayed gratification?

English: Marshmallows

I prefer the David Brooks column as a reference, but you can also insert the words in your favorite search engine for the story. Or check out this video of adorable children wrestling with the one now or two later question.

When I heard about a new 24 hour Cupcake ATM (@CupcakeATM)  this week, I was appalled, but looked nevertheless!  Here is the video.

For those of you who remember the automat, the only thing new about this is the price and the dispensed product. If you have late night cravings, this is classier than going to a convenience store.

Red Velvet 1 Red Ropes 0

But I digress. Here is a definition of delayed gratification from the Encyclopedia of Psychology:

The ability to forgo an immediate pleasure or reward in order to gain a more substantial one later.

For all of my professional life, I have worked in intangibles and the concept of delayed gratification is inherent in the practice of money management and financial planning. However, in doing some research, I learned that delayed gratification is present in other areas of study as well. David Brooks covers the link to brain research, and we also have religion. Apparently St. Augustine prayed:  Lord make me chaste — but not yet!

One may as well say, “Let’s go to the ATM!”

M Scott Peck, author of the book The Road Less Traveled, described four aspects of discipline: one of which is:

  Delaying gratification: Sacrificing present comfort for future  gains.

Peck says that these are “These are techniques of suffering”. This is not of much use on a day-to-day basis – come study with me and I will make you suffer!

Cupcake ATM 1  Study and Suffer 0

                             What really works to instill delayed gratification?

Advice     My recommendation is pretty simple but not necessarily easy.  I created this list:

  1. Awareness; then Acceptance of what you are doing right now. Some would argue against acceptance, but you must have a moment of it to move forward without internal “shaming and blaming”.
  2. Then Balance the current behavior against your desired goals. At $4 a pop, it would only take 6.25 foregone cupcakes to add $25 to your mutual fund or credit card payment each month.
  3. Then Change your behavior to meet your goals. Be Compassionate with yourself while doing this.

Awareness/Acceptance/Balance/Change = ABC

I haven’t yet resorted to taking away my client’s marshmallows [or cupcakes], however, at $4 per cupcake, gratification delayed is money in your pocket!

Wallet 4, Cupcake ATM 0


Filed under Learning About Finance

Learning about personal finance can be “informal”

“Across our lifespan, humans spend more than 80% of their 16 waking hours in “informal” learning environments outside “formal” classroom walls.”

(University of Washington College of Ed. publication Research That Matters, Volume 10)

So why are some of us stuck in our learning patterns about money?  Or School’s Out Forever?  Apparently we have ample hours after our “formal education” is over to pick up new material, concepts and even practical things like improving your financial infrastructure.

Have you ever heard a friend or colleague say things like the following:

  • Math and I don’t get along
  • My wife/husband takes care of that
  • The economy doesn’t affect me (yes, I heard that once)

My all time favorite is, “I don’t do live math”. (heard during a public radio pledge drive)

Perhaps some of this goes back to the way we all learned about math in school, whether we learned “good” or ‘bad” money lessons at home, or if our education has all come from ‘the school of bad experiences”. Granted, some of us had truly bad math instruction, and some of us just didn’t see the relevance to math, personal finance and economics at the time we first saw with the material. Some people learn about stocks at age 15, but it doesn’t mean that you can’t pick up new concepts at any age.

My reason for beginning my blog with this research is to give yourself permission to begin anew with your learning. You can also give yourself permission to approach your personal finances in a way that is different from “keeping up with the Joneses”, the way other members of your family learn, and the way you learned math from “Mrs./Mr. Smith” in high school. In other words, allow yourself to embrace new informal learning opportunities!

As you follow this blog, you will learn and even change your perceptions about personal finance for the better. I will help you understand that small, consistent, sustainable changes matter. You don’t have to hit a home run. You don’t need to have that ultimate, sexy cocktail party story about your fabulous investment that made you so rich. You do need to remember that “right-size” changes, are what are best for you.

When we learn new things, as youth or adults, remember this advice from UW Professor Walter Parker:

“We have to help [learners] develop the sense that, “If things are tough, it just means I am a novice, it doesn’t mean I don’t have the competency for this work.”

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Filed under Learning About Finance