When I was just a kid, I remember the adults throwing around an economic adage; “shirt sleeves to shirt sleeves in three generations.” I kept asking questions until someone finally explained what it meant. Generally speaking, personal wealth goes in cycles. The next generation, unless there is some form of intervention and transformation, will follow an increased trend of expediency and convenience rather than frugality and discipline. It takes real focus and discipline to teach the next generation about issues of money and value.
Convenience for the present generation transforms into entitlement for the next generation. It has been my observation, that you have to consciously tell your money what to do – or it will leave! And what the older folks back yonder were really saying was; that it takes about three generations to go through the wealth/poverty cycle. . . then, the money bag is empty.
I think it was Will Rogers who said, “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.”
So, how would this intervention or transformation work in order to break the trend of expediency and avarice that ends up in slothfulness and poverty? Well, the simple answer would be through some type of education – preferably, in the home and in the school. Teaching about money and value needs to be caught as well as taught.
It seems to be quite self-evident, that those filling the parental roles in today’s households, have neither the time, nor the inclination, nor the ability to teach the next generation about basic economic concepts, everyday values, or practical money matters.
Our schools appear to be even more derelict in this regard. Our own Colorado Council for Economic Education warns that, “We send our children out into the world lacking the basic skills to prosper in life; understanding personal finance, and economics.”
Recently, I reviewed a national program offered that was designed to fulfill all your kid’s needs for financial education. The parents could subscribe to a safe app where they would be notified on their cell phone of every financial transaction -- the store and the amount – of the child’s spending activities.
Each one of the kids would receive a personalized Debit Card, that is, parenthetically, connected to a parent’s cell phone. The parents would dump money into an allowance account that is set on auto pilot so you can “set it and forget it.” Another feature, is that the parents can add amounts of additional funds immediately with a few quick clicks, so that the child needs never to be embarrassed when they spend more than their entitled funds.
The educational and guidance aspect of the program is that when the child’s purchase is complete and the transaction notice is received by the parent, then the parent can either praise the child for having gone to the “right” store and having purchased the “right” product – or it can become a teachable moment where the parent can come unglued at the incompetence or improper behavior of the child. That pretty much rounds out the needed economics lesson between the child and the parent.
Perhaps one of the saddest things that has happened to our society has been the loss of the vital and realistic connection between production and consumption. The magical politicians have bamboozled us into thinking that there is a mystical source out there somewhere that makes it possible to continue to fill our debit card accounts with spendable funds to which we are irrefutably entitled.
But the truth is, there is a positive link between the fruits of our labor and the ATM machine. You work and produce something in order to trade your labor supply for the supply of some other worker! It doesn’t work any other way for very long. When the myth is gone, that money and things simply come from Mom and Dad’s magic money machine, (or the government’s illusion of endless supply) then, truth takes the bullhorn and in a deafening thunderbolt of undeniable announcement proclaims, “You work in order to trade your labor supply for the supply of some other worker – nothing happens unless and until you produce something!”
Anna Marie and I were both raised in rural Idaho. I was expected to work and even earn the money to buy my own school clothes from the time I was in 5th grade. Anna Marie’s siblings all had “4-H Projects” on the farm, where they raised their own animals that were eventually taken to the Livestock Auction. There, the animals were exchanged for money. The money received from the sale was only a landing spot until they identified what other purchase they needed to make from the supply of some other worker. But the rational connection was never severed between the pocket full of money and the product of their labor.
I say that I am the “Happiest Man in the World.” But I am also the most fortunate man in the world. For the most part of forty years I have had the opportunity as an economist to travel and work in countries all over the whole world. One of the things I enjoyed most while visiting in over 150 countries was the chance to observe the people and their economic customs and behaviors.
Many times, I would request of my hosts to take me to the market places of the cities and villages so that I could just watch and listen to the local people as they went about their business. I would learn so much about the cultures that I otherwise would have totally missed.
One day, I was just quietly observing a village mother at the market. Her children were with her. They had brought with them items to sell or exchange that were products of their own labor. She was also, quite obviously, explaining to her kids what to look for in the products they were buying. She was teaching them how to bargain for just the right price. I pointed out my observations to my host. He laughed, and then he said to me something I have never been able to get out of my mind. He said:
“IF YOU WANT TO TEACH YOUR CHILDREN ABOUT MONEY . . .
IT IS BETTER IF YOU DON’T HAVE ANY!”
Can you even imagine the welcomed effectiveness of our new family teachers two generations from now when they don’t have anything. . . and they are starting the “shirt sleeve to shirt sleeve” cycle all over again?