The newest episode (Lucky Number 13!) of The Art of Allowance Podcast features Chuck Kalish, the Director of Science for The Society for Research in Child Development (SRCD). Chuck received his B.A. in Psychology from Swarthmore College and earned his doctorate in Developmental Psychology at the University of Michigan. Before Chuck joined the SRCD, he was a Professor in and a past Chair of the Educational Psychology Department at the University of Wisconsin-Madison. Chuck is an expert in understanding how children develop what we might consider commonsense beliefs and how kids interpret the social norms that we adults take for granted. He and I discuss toxic stress and its insidious effects, executive function and a recent study that has called into question the oft-cited Marshmallow Test. Also, as the headline suggests, Chuck explains his belief that videogames might teach financial literacy better than books. There is a lot to chew on in this particular show, as Chuck has a deep understanding of kids’ and adults’ relationships with money.
“Money is the way we interact with strangers.”
Please be patient with this somewhat wonky episode, as there are so many great points that we discuss and unwrap. The following are some of the many topics we cover:
- Research into kids and money is spotty and a fair amount of it was conducted in the 70s.
- Executive function is exactly that: the “executive” who helps exercise control and manages the ability to pause and reflect.
- Executive function’s early emergence strongly indicates the importance of introducing financial literacy sooner rather than later.
- “The way poverty gets under the skin” – We discuss what toxic stress is and how dangerous it can be to the young brain.
- “People work on habit.”
- Involving your children in the charity decision-making process
- What emporiophobia means (I told you we were getting wonky here!)
- Using ballpark sizing of expenditures to help your kids understand practical information like rent, insurance, etc.
- If money discussions are difficult, then consider making these conversations about resource management.
- Though we are predisposed to be loss averse and we may not want to discuss these painful incidents, sharing with our children that we went through the same types of issues helps them relate.
- Giving voice to those monetary (or resource management) choices that your kids don’t see
- Ways partners might want to consider dealing with money value disagreements
- A recent update on the Marshmallow Test that may call into question the validity of the original study
- Margaret Echelbarger and Chuck published a paper about money personalities. Chuck believes that although individual differences develop, perhaps birth order is as much at work as anything. We just don’t know.
- We mention a NY Times article about living beneath your means (and the FIRE movement)
- The permanent income hypothesis and “dissaving”
- Chuck’s research helped the CFPB define financial well being and provide resources for youth money smarts.
- A lot of what Chuck mentions refers indirectly to Daniel Kahneman’s System 1 (our gut reactions) and System 2 (our thoughtful considerations) from the book Thinking, Fast and Slow.
If you liked this episode, you might enjoy my interview with Elizabeth Odders-White, Chuck’s colleague during his Wisconsin days. You might like my recent discussion with Sam Renick as we also discuss the importance of habits.
Please subscribe to our show to allow me to have additional conversations with parents and discover new ideas to help us all raise money-smart, money-empowered kids. You can find out more about our movement at theartofallowance.com as well as download a sample or get a copy of my new book, The Art of Allowance. You might also want to check out The Money Mammals, our program to get your children excited about money smarts when they’re young. Until next time, I wish you and your family well as you journey forth. Thanks for listening.