Other people’s money

As you may recall, I said at the beginning of the summer that I was going to introduce capitalism into the house by giving my children big chores with meaningful rewards.  This plan worked fairly well.  It wasn’t quite the juggernaut I’d hoped for, with the kids taking care of all the backlog in the house, but we still got a lot done.

Part of the plan’s failure was simply the dislocation of summer:  my son went to sleep-away camp, then we went away for vacation, then the kids started long day camps, then my niece came to visit, etc., etc.  I simply could not maintain a work schedule. Even with the disruptions, though, the kids made a lot of money:  My son has amassed $175 and my daughter $165.

At the beginning of the summer, when the kids and I first agreed on this economic experiment, I promised them that they could spend the money as they wanted, subject to my veto.  My daughter wanted to spend it at Abercrombie & Fitch.  That put me in something of a bind.  Let me give you a bit of background to explain my dilemma.

One of the things I struggled with as a parent all last school year was the fact that the idea of popularity plays such a large role in 5th grade.  Because we share a school district with an extremely affluent community, the popular girls in 5th grade were the ones with money at their backs:  they live in very large homes, their parents drive very expensive cars and, most importantly from my daughter’s point of view, they wear clothes from Abercrombie & Fitch.

You may recall that A&F used to be a very staid provider of outdoors clothes.  You’re also probably aware that nowadays Abercrombie sells totally ordinary clothes, but that it makes them seem special to teens and tweens by using exceptionally salacious advertisements.

Since I disapprove deeply of A&F’s marketing plan, I refuse to spend any money there.  By the time summer began and my daughter made her request about buying clothes at A&F with any money she might earn, neither she nor I had ever set foot in Abercrombie (either the real store or the cyber store).

My first instinct was to say “no” to her request to spend her earned money at A&F.  However, I knew she would need every incentive possible to buckle down to household tasks, and this was clearly an incentive.  I also figured that we’d shop online, which would keep her out of a store festooned with what amount to soft porn pictures.  I have a little more control over what she sees if we shop online.

I needn’t have worried about any of this, though.  Now that summer’s over and she has the money in her hands, she’s decided that she doesn’t want to shop at A&F at all.  She wants to shop at Target.  Why?  Because it’s her own money.  All during the school year, when she was begging to go to A&F, she was contemplating spending my hard earned money, not her hard-earned money.  Now, however, having herself worked hard for the money, she doesn’t want to waste it.  She’s figured out that she’ll get perfectly lovely clothes at a much better price (meaning more clothes) if she shops at Target.

In other words, this summer’s experiment proved to have a double capitalism whammy.  Not only did the promise of earning real money give my children an incentive to work hard at tasks that they would otherwise not have done, the experience changed my daughter’s spending habits.  Rather than being profligate with my money, she is being wise with her own.

Her sudden wisdom about money, of course, is precisely the same argument tax foes make when they say that the government, rather than taking as much money as possible from people (the Obama model), should leave as much money as possible with people (the conservative and sort-of the McCain model).  Because the government doesn’t work for the money, it has no incentive to spend it wisely.  From the government viewpoint, every penny in the budget is “other people’s money.”  Additionally, the government knows that, with its coercive power, there’s always more where that came from.  It’s the people who work hard to make money who should be given the right to control its spending, and that’s true whether they want to spend it on a few items of high quality (or cachet) or on many items of middle quality.

I understand that there are some things that people simply can’t buy:  local and national infrastructure and national defense.  However, people should be able to decide about health care, and schools, and all sorts of things either that the government now controls in whole or in part, or that the Obamamanics want to sweep into government control.  Government, for the most part, spends money profligately; people, for the most part, spend that same money wisely.  (And even if they don’t spend it wisely, either they’re still happy with their profligacy, because it’s their choice, or they learn their lesson and don’t make that mistake again, a lesson the government never masters.)

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  • Allen

    Your son has more money, hmmm sounds like sexism to me.

    I’m kidding, I’m kidding.

    Now take back 40% for “infrastructure.” Mom, mom, what is this tax business?

    You and Mr. Bookworm are raising two fine citizens.

  • BrianE

    Your daughter’s story is a great example of the effects of coupling effort with reward. Bravo to her.
    Unfortunately, at the national level, almost everyone is spending someone elses money (the A&F syndrome).
    You didn’t say, but I’ll wager your son wants to spend his money on video games.

  • Brian Rude

    Your very interesting post brought to mind the “Bank of Dave”, an article which I read some years ago. He acts as a bank for his kids and gives them whimsical rates of interest, because normal rates of interest are meaningless to kids. Fortunately I was able to google his article. here’s the link. http://www.theatlantic.com/issues/98apr/kidmoney.htm

  • http://bookwormroom.com Bookworm

    Allen & Brian: My son earned more because he is much more goal oriented than my daughter. He wants to buy a very fancy skateboard, and he wanted to earn as much money as possible. My daughter, who is very acquisitive, has still be less willing to work for what she wants. She wants everything, but isn’t willing to do anything. That’s why, at the start of the summer, and with a very heavy heart, I said yes to A&F for her — I needed the biggest incentive possible.

  • BrianE

    Brian,
    That Bank of Dave story was GREAT.
    And I applaud Bookworm for some very creative ideas to overcome the typical Nagging Syndrome most parents suffer from.
    My children are grown now, and we tied an allowance to certain household chores– cleaning your room, taking out the garbage, etc. Certain tasks– mowing the lawn, doing dishes were outside the allowance and were paid.
    We never solved the disconnect between the allowance and chores (and probably didn’t pay what our kids considered a fair wage). We just nagged a lot.
    Now grown, our oldest is still a spend it before you get it kind of person (I think her husband is also in that camp).
    Our second daughter is very thrifty (just ask HER husband). She is still driving a 1997 Ford Escort we bought her when she was still in college (what was once a symbol of cheap– her friends were driving Accords, has now become a status symbol in this $4/gal gas age).
    Our son, a marine reservist and college student, can’t spend his money fast enough. When he deployed to Iraq, he left with $8,000 in credit card debt. Most of it spent on tech toys including about every X-box game that exists and a movie collection that would rival a small studio. When I asked him why he did it, he said if he was killed in Iraq, he wouldn’t have to repay it, and in the meantime his combat pay would take care of the debt– which it did, including paying off his car. Kind of made sense in a macabre sort of way.
    He returned with about $4,000 which he immediately spent on more tech toys– a stereo for his car, I-phone, etc.
    I can’t say very much, though, since he takes after me.

  • http://bookwormroom.com Bookworm

    I’m glad your son returned safe and sound, BrianE — and yes, his behavior was very logical. I understand the instant gratification of technology. Everything is so wonderful that it’s an instant pleasure when you get it. And then, not because of artificial planned obsolescence, but because of real changes in the technology area, things just keep getting better. I’m a big fan of delayed gratification, though.

    I’m also cheap. I know that the computer I crave today will be $1000 cheaper in a year. I can wait. (Of course, there’ ll be better computer out by next year, so I’m always a year behind the market. I tailor my tastes to my budget.)

    Speaking of which, a new computer should be arriving in the mail today. I’m very excited, because mine has been making suspicious chugging noises lately.

  • suek

    >>mine has been making suspicious chugging noises lately.>>

    Have you considered this:
    http://www.carbonite.com/

    My computer stuff is all “play” stuff, but I’d still hate to lose it. You seem to do a lot of stuff that’s actually important – if I did, I’d consider the $50 per year a cheap insurance…

  • http://bookwormroom.com Bookworm

    I do have it backed up, SueK. I simply need to make sure I have a functional computer for all the other stuff — the work in progress, so to speak.

  • Mike Devx

    No system is ever perfect, or implemented perfectly; to me it isn’t a surprise that your effort at home capitalism didn’t work out perfectly.

    Nor is it a surprise that it worked out fairly well! Seems to me the experiment reflected the real world!

    My favorite quote that I ran across today:
    “I’d rather vote for McCain and hope that he does what he says he’ll do, than vote for Obama and hope that he doesn’t.”

  • Ymarsakar

    Because we share a school district with an extremely affluent community, the popular girls in 5th grade were the ones with money at their backs: they live in very large homes, their parents drive very expensive cars and, most importantly from my daughter’s point of view, they wear clothes from Abercrombie & Fitch.

    I can sympathize with that.

    My first instinct was to say “no” to her request to spend her earned money at A&F. However, I knew she would need every incentive possible to buckle down to household tasks, and this was clearly an incentive.

    Well you agreed and you have to keep your word. Is it her fault you didn’t know what you were agreeing to? You’re a lawyer, I believe you know the answer to that ; )

    In other words, this summer’s experiment proved to have a double capitalism whammy.

    That is how we all fall to the Dark Side of Capitalism …

    As for debt, Book, individuals declare bankruptcy. The government just borrows more and gets more into debt.