Thirty pairs of eyes are looking up at you, watching you as you enter their classroom. You are going to ask them just one question – that’s the rule! – and on the basis of their answers, you have to predict which kids will grow up to be financially healthy.
What question will you ask?
Clearly this is just a thought experiment but don’t read any further until you’ve thought about this.
In this blog, you will find out what one question I would ask and why. Later, you will learn how to make sure your kids can give a positive answer to my question.
Since I’m teaching you to teach your children about money, we will of course begin with a story. Kids love stories!
The ‘One Question’ Story
Every ten years a group of villages has a competition to see which village can grow the biggest forest over the next ten years. Each village has to pick a team to compete.
In line with the rules and traditions, those entering have to be under 18 years old at the start. Interestingly, each village leader will ask the children in the village just one question, in order to determine who will compete for their village.
As the village of Habiton has never won the competition, the leader of the village, Bobby Cormack, wanted to make sure he asked the right question to the children this time.
He really didn’t know where to start.
His initial thought was to ask, “Do your parents have a big forest?”. It seemed obvious that if the parents could grow a big forest, then their children would also be able to grow a big forest. However, that was the question that he asked the children ten years ago and it didn’t work out well. A couple of the children who were picked to compete didn’t know how to grow a forest as their parents’ forest provided them with everything they needed. They didn’t have the motivation to go out and learn how to grow their own forest.
The next question Bobby thought of was “What grades are you getting at school?”. This initially seemed like a great question as he thought that smart kids would figure out how to grow a big forest. Clearly having good grades means you will be smart, right?!
Before he asked this question to the children in the village, he went and found the smartest people (adults) in the village to see if they had grown a large forest before. When he found the smartest people, many were busy teaching at the school. Bobby asked them if they had grown a large forest.
Turns out a few of them had a large forest but the rest of them failed miserably at growing a forest. Whilst they knew a lot about so many different subjects, they’d never been taught how to grow a forest. It was never taught at school. Bobby was relieved he didn’t ask that question when picking the team.
Then Bobby thought he should ask a question to see if the children are already growing their own forests. If they are growing a forest now, then they are likely to be good at growing a forest in the future."How big is your forest now?” he thought to himself.
Whilst he liked the idea of asking a question based on whether the children were growing their forest now, he felt he needed to refine it. Some of the kids might have planted seeds ages ago and not planted any since. Essentially, he worried that how big their forest is now, might not be a good guide to how big it will be in the future. The question was also unfair to the younger kids in the village.
It was then that he came up with his question “Who has a regular habit of planting seeds?”
He went to village and gathered the children. He asked the question. As expected only a few hands were raised. To everyone’s surprise, he congratulated them and told them they would be competing in the competition on behalf of the village.
People were shocked that he hadn’t picked those from the families with the biggest forests or the smartest kids.
The competition started and the forests started to grow. Initially the village of Habiton’s forest wasn’t the biggest. The other villages worked really hard to plant as many seeds as possible in the first couple of years. As the competition went on, the other villages got a bit bored as they were ahead and stopped planting new seeds.
The children from Habiton just kept planting as they had done for most of their lives. They were not fussed about what the other villages were doing. Their consistency paid off. After 10 years, it was clear that the village of Habiton had the biggest forest.
When asked by a reporter about how he picked the kids, Bobby said “Planting seeds isn’t difficult, you just have to be consistent about it, and that seems to be where most people fall down.
If children grow up doing something as a regular habit, then that is likely to stick with them into adulthood. So, I picked the kids who already planted seeds regularly, as I knew they would continue to plant for all ten years.”
The end (and it’s a happy ending)
My question for the class about money
Like many of my money stories, when it comes to money, it’s not about being really smart or coming from a family with lots of money. The key is forming good money habits.
If a child learns to save a little bit of money each time they receive some, they will save consistently (just like the children planted their seeds consistently in the story) and will grow up to be financially healthy.
So, my question to the classroom would be:
“Who has a regular habit of saving money?”
Those kids that raise their hands would be the ones I’d predict will grow up to be financially healthy. This question would trump questions about their grades, social background or their parents' money.
‘It’s the money habits that your kids form that will determine their future financial wellbeing’
I find this really empowering for all parents. It doesn’t matter how good you are with money; you have the ability to help your kids to grow up to become financially healthy. They just need to form the habit of saving money each time they receive some money.
The issue is that forming good habits is hard. Well, not anymore!
The easy way to start a new habit
Most people who try to change their habits often struggle. Have you ever tried to stick to a new diet, go to the gym more often or spend less money? Whilst we can do these for a period of time, most of us struggle to stick with them long enough to make them a new habit.
Luckily, there is a great new way to think about forming new habits which has a much higher chance of success.
This was raised in a great blog post called ‘One push-up a day’ from the site #HashtagYourLife. A link to this blog can be found at the end.
In short, most of us fail to stick to a new habit as we make the hurdle too high. We say things like ‘I’ll do 30 push-ups every day to get fit’. Although that’s a lot for a beginner, our motivation is high, so we make it happen. Then as time goes on, the motivation to get on the floor weakens relative to the effort of the high goal, and actually doing 30 push-ups becomes harder and harder. We eventually miss one day. Then we miss two days in a row. Soon enough we have stopped as it’s too hard to motivate ourselves do 30 push-ups every day.
The trick is to commit to doing at least a small effort every day. In the case of “One push-up a day” story, it is just - literally - doing one push-up a day. That doesn’t take much energy at all so there is no reason to not do it. This means we’ll continue to do this every day and make it a new habit.
Now, you are rightly thinking ‘But one push-up a day isn’t going to make any difference?!’ You’re right, it won’t, if you judge it by the effort. However, what will happen is that once you have a sustained effort, when you go down to do one push-up, you are very likely to end up doing more than one push-up. Some days, you’ll do loads of push-ups.
But that doesn’t happen until you have a sustained effort. And you can’t create that if you have to make excessive effort in the beginning, because that makes giving up so appealing.
There will be some days that you are feeling tired and only do one push-up. That’s completely fine. You have maintained the habit of doing one push-up a day. You’ll do more the next day when you get down there. Eventually you’ll notice a difference in how easy it is to do more push-ups, or you’ll see some muscles you’ve not seen for a while. These factors then help drive you to continue to more and more push-ups.
The idea with this approach is to make the starting as simple as possible so there are no excuses.
And the story of “One push-up a day” is so relevant to teaching children the habit of saving. The small amount of money they put aside when they’re young won’t make them rich when they’re older, but it does create a life-long habit of saving. And that’s priceless.
Forming new money habits
When it comes to money, we need to get our kids in the habit of saving a little bit of money every time they receive some. It doesn’t matter how much. This means they are still able to spend most of the money they receive (which is fun!).
If they save just a little bit each time they receive some money, it will become their money habit. The amount they save doesn’t matter. The key is that they grow up with a savings habit. This savings habit is the game-changer in terms of their future financial wellbeing.
Those that grow up saving are much less likely to overspend (which is the cause of pretty much all money issues adults face today) and have some money saved away (which can be invested and grown, providing financial security).
The younger we start helping our kids form this habit, the easier it is. Remember, most kids have formed many of the adult money habits by the age of 7!
Thanks for reading!
P.S. If you thought of another question that you’d ask the class, I’d love to hear it. Please email at firstname.lastname@example.org