One of the most beneficial courses I took in my educational training in college taught one of the most important strategies for effective classroom management: PAT. Preferred Activity Time. The basic principle offered by the professor was that a key to classroom management and incentivizing diligent, respectful, on-task students is to offer preferred activity time: flexible time to be used in ways that the kids preferred, within certain guidelines, of course.
And this PAT could be increased or decreased based on students’ behavior, respect, diligence, et cetera. The basic idea here was that students have a stake in their time. They have an investment, and they can make choices as to how to use that investment.
The basic idea behind this is a cornerstone of liberty. We all know that we more highly value something we own than something we are loaned, especially if there is work involved to attain it. In the educational training, there was just a little bit of PAT to begin with (say, five minutes), but that could be increased if the students made appropriate choices with their investment, and decreased if the students made poor choices with their time.
As parents raising kids grounded with the fundamental understanding of liberty, we have to do the same. We have to teach individual responsibility. We have to help our kids understand that their time, their money, their resources and their talents are investments to be used with wisdom or foolishness. We have to give them a stake, and the consequences—good and bad— that come with that.
The same is true in teaching finance to our kids.
They cannot learn the value—the investment—of money unless they have some (or something) at stake.
As a parent of a three-year-old and a nearly one-year-old, I’m not giving my kids cold, hard cash, just yet! But especially with the older, I am learning quickly that the incentive to make wise decisions with his time, his obedience, his toys, et cetera, must necessarily come from a motivation that, even at his young age, understands some basic level of responsibility and positive and negative consequence.
“You can choose between eating your peas, or being hungry.”
“You can choose between throwing a fit and going home, or being polite and getting more time to play at the playground.”
“You can choose between continuing to play with your trains, or cleaning up your trains and getting another toy.”
And of course, you can see the operational word here: choice. This does not negate my authority as parent and choice does not give my children free reign to do as they please. This is not a choice between whatever pleasurable outcome they desire, but between a positive and negative consequence.
Isn’t that the basic principle we want to teach our kids? We want them to be diligent, respectful, wise, dedicated, ethical, generous, and so forth. But we want it to be their choice. We want them to want it. And we want to teach them that life is a series of choices, and they must face the good and the bad consequences of those choices. This is what my eldest son is learning (I hope!) even at his age.
As kids grow older, the stakes get larger, the consequences more profound. Give teenagers the chance to earn cash, and then opportunities for reward or loss depending on how that cash is used.
Dave Ramsey, a well-known public financial speaker and consultant, promised each of his kids that he would match whatever funds they saved for purchasing their first car. Note that they—not dad— were responsible for that car (no savings, no car)! But there was extra incentive for being a diligent saver.
Another financial writer, speaker, and consultant I heard gave each of his daughters a set amount to be spent on their weddings. But, he told them, for each $1000 less that they spent on their wedding, he would contribute an additional $1000 match for a down payment on their first home. Sure, they could spend $10,000 on their wedding (these are not the actual numbers he offered), or they could spend $5000 and receive $10000 toward their down payment. Or they could save up on their own for their wedding and receive the full amount doubled for their home.
It was their investment, their choice, and their consequences—good or bad.
As liberty parents, it is incumbent upon us to foster this understanding and grow young men and women who know, from their earliest years, that their money, time, resources, talents, gifts, and skills are investments, and to take individual responsibility for prudence that brings blessing rather than dependency that brings ungrateful expectation.