EDITOR'S NOTE: The following is George Bailey's weekly report on he and his wife's efforts to teach their kids financial freedom.
If you haven't been to the Saint Louis Zoo, you need to get on the stick. It's been rated the best zoo in the the United States and lives up to all the hype. It has a polar bear, red pandas, sea lions, an armada of penguins, and a hippo exhibit that would be an amazing place for a party if I didn't know better about hippos. I wouldn't be surprised if they were hatching raptor eggs for next season.
The best thing about the place is that it is free for all ages. Yes, I know that it's paid for by taxpayer money and yada yada yada, but as unenthusiastic as I am about taxes, there's something to be said about a zoo that attracts people of all walks of life and gives children everywhere a chance to experience some of nature's greatest wonders ("I am nature's greatest wonder!" — Asclepius, the pet snake).
On a normal trip to the zoo, we don't spend a dime. It's not that there are no opportunities for dime-spending. The zoo has numerous attractions that cost money: a train, face painting, ice cream ("What?! You didn't consult me on that decision." — my growing gut), the list goes on. (There's even a Starbucks under construction so that the last bastion of Starbucks-less property will be conquered.) The reason we don't spend dimes at the zoo is because Christina and I pinch pennies.
Our children do not pinch pennies—not at the zoo, not anywhere. When you place money in our children's hands, the fundamental force of friction disappears and the money slides unnaturally from our children's grip to the paws of the nearest doodad huckster.
None of this bodes well for our newly instituted practice of giving our children an allowance. But I'm determined to let them have some say regarding where their money goes, so there was not much I could do to persuade two of them from going on the Merry-Go-Round. I tried an on-the-spot explanation on opportunity costs, but the concept was far more abstract than the mechanical tigers and zebras running laps in front of their eyes.
I would rather see our children save towards a special purchase than spend every dollar as they accumulate it. However, I anticipate that there will be a difficult learning curve up front during which my children are subject to the whims of instant gratification. They will go around the Merry-Go-Round of spending on many unfulfilling things before being inclined to step off.
All this makes me think that I need to be more clever in how I persuade my children to save towards bigger things. Next time I'm at the store with them, I should walk them past the Legos or bikes or oven units (we'll probably need a new one in the next couple of years, and I would love if our children made the purchase and not us) so they have something more concrete to think about the next time we go to the zoo. Then when they are tempted by the turnings of the Merry-Go-Round, I can teach them a lesson on opportunity costs that will be more meaningful.