The Science of Parenting

What Influences Our Finances? | S.11 Ep.2

April 27, 2023 Iowa State University Extension and Outreach Season 11 Episode 2
The Science of Parenting
What Influences Our Finances? | S.11 Ep.2
Show Notes Transcript

A lot of different factors influence our financial well-being – from individual traits, to how a decision is presented to you, and even society! Listen in as the cohosts share a model for understanding these influences and even talk about some things that influence their financial practices and money habits.

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Mackenzie Johnson:

Hey, Mackenzie Johnson here, coming to you with a special opportunity that the Science of Parenting team has going on right now. We are collecting feedback from you, our listeners and viewers, all about last season where we were talking about kids and food. We have a short 10 minute survey that we are going to ask about what you thought about last season, what you learned the last season. You have a chance to kind of give us your thoughts on the overall podcast, as well as even an opportunity to submit a topic for us to consider in the future. So your feedback is going to help us make decisions about our podcasts and future content. If you are over the age of 18, if you are a parent or caregiver of a child, and if you've listened to any of the episodes from last season, that's right, even just one one of those episodes we are where we are talking about kids and food. You can find the survey link in today's episode description. Or you can also find it on our social media on Facebook or Twitter at the Science of Parenting. Thanks for listening. We hope you'll participate and enjoy today's episode. Welcome to the Science of Parenting podcast where we connect you with research based information that fits your family. We'll talk about the realities of raising kids and how research can help guide our parenting decisions. I'm Mackenzie Johnson, parent of two littles with their own quirks and I'm a parenting educator.

Suzanne Bartholomae:

Hi, I'm Suzanne Bartholomae. I'm an associate professor who strives to help people increase their financial security, and I'm a parent of a high schooler.

Mackenzie Johnson:

Yes, Suzanne's back, we did not scare her off, love that for us. Let's say first episode down. How do you feel about podcasting? How are we doing?

Suzanne Bartholomae:

Well, you know, I'm having a lot of fun. I don't think I should be getting paid for it. It's that work, that work ethic guilt I'm experiencing right now. But no, this is fun.

Mackenzie Johnson:

It's not hard enough. Oh, great. I love that.

Suzanne Bartholomae:

Yeah, I don't know. I'm not suffering enough. You know, that's what I was taught. I guess I need to suffer while I'm working.

Mackenzie Johnson:

Oh, that's funny. Yeah, we really like we're just here. We're all hanging out. Just talking about interesting things like things that fascinate us.

Suzanne Bartholomae:

Yeah, I love it. So fortunate. I'm so glad you focused on money this season.

Mackenzie Johnson:

Well, we're really glad to have you helping us focus on it. And I was even sharing a story with our team earlier about like, this is what happens. We do a podcast season on a topic and then it like infiltrates my relationships with my children. So then I have content for upcoming episodes, because I'm always thinking about whatever we're doing on the podcast. That really like that works out, that works out for me.

Suzanne Bartholomae:

It does, man. You're great financial parent right now.

Mackenzie Johnson:

Oh, look at me. Oh my gosh, look at my growth. All this growth, Suzanne. I'm doing all the screw ups.

Suzanne Bartholomae:

And the healthy eating, I hope that's still happening. I hope that lesson stuck.

Mackenzie Johnson:

We're making some healthful choices from the previous podcast season on kids and food. And yeah, the conversations we have because like, yes, I didn't think about that before. Oh, yeah. So it just infiltrates, it infiltrates, which is great. That's the goal, right? Hopefully, it's infiltrating you listeners as well. Oh, well. For today we are going to dig in. You may have noticed this pattern and last season with Lyndi, and I mean even like our discipline season or regulation, this is like a pattern we're establishing is often after we introduce this kind of whatever topic we have for the season, our second episode has been on this kind of theme of reflection on what influences, right, what goes into all this stuff. And so we're following that pattern again this season. And we're gonna talk about what influences our money decisions and our finances. So I do think it's important. You know, I don't really know if we talked about it in the first episode, that money can be tricky, right? Like we, and I mean you, have talked about some of that with me even about some of the literature behind it of like, how much we talk about it, why we do, why we don't. But I do think like, let's acknowledge as we are going to be reflecting this episode, for some of us money feels taboo.

Suzanne Bartholomae:

Yes, yes. So we're gonna be focusing on, you know, what we learned in our experience growing up. And so for some of us, money was taboo, private, secret, versus others may have been in a really open household. So yeah, we do bring our own lived experience to the table for all these topics.

Mackenzie Johnson:

Oh, yeah. Oh, yeah. The way we were raised, right. There's all kinds of parenting literature on that, like, the way we were raised. I almost want to use that word infiltrate again. But right, but it trickles down. It trickles into our parenting consciously, right? There are some things we're like, oh my gosh, I love how my parents did that. I want to do that. And there's some things that were like, I did not like how my parents did that and it shows up in our parenting unconsciously. Right? And so it is like, all of our experiences influence how we influence our kids, for sure. And actually, you told a story about food. We're gonna add together season 10 and season 11. Like this little anecdote, I mean, parable almost, like a little story that is a great way to recognize, right, what is passed on?

Suzanne Bartholomae:

Yeah, so we're talking about how generation to generation, habits and values are passed on. So the parable of the ham, or the turkey in your case.

Mackenzie Johnson:

I heard it as turkey.

Suzanne Bartholomae:

Turkey, yeah. So the idea that, you know, a child is watching her mom or his mom prepare a ham for a holiday. And she cuts off the ends, throws the end into the garbage can and the child says, why did you throw the ham into the garbage can? Why are we wasting that ham? And so she said, well, that's because it's the way my mom did it. So the child goes to Grandpa, because Grandma's not around anymore, and says, hey, why did grandma cut the end of the ham or turkey off? And he said, oh, well, because her pan wasn't large enough to fit the full ham in. And so I think it is a great illustration of how as parents how we're imprinted by our parents, and how we imprint our children with whatever those traditions, gifts, maybe we don't see them as gifts, are passed on to us in our childhood experience.

Mackenzie Johnson:

And yes, the things that we take on, if you will, as like, yes, this is a family value. This is the way you do it. This is the way you make ham. Well, that was the way she made ham for a very specific reason.

Suzanne Bartholomae:

Yeah, exactly.

Mackenzie Johnson:

And, as we, I mean, yes, this episode as we get to dig into a model. As the listeners know, I'm excited. As we dig into a model this episode, I do think about, we want to honor that our parents were showing up, one, typically in the best way they knew how, right? They were showing up in the best way they knew how to show up for us. And that there may be really specific things that informed their decisions and their actions and their communication that we may or may not be privy to, right? There might be some things that were like, Oh, I recognize this might have been as a result of, they had some scarcity, right? There were times when they didn't always have enough, or this might be a result of this specific experience. But there's gonna be things we don't know why. So we do want to assume the positive intent of the people who cared for us, right, our caregivers from the generation before us, but we do know, it passes from generation to generation, parenting does, just like financial parenting passes from generation to generation.

Suzanne Bartholomae:

Yeah, yeah. So anybody, you know, we crossed paths with will be happy to tell us about a lesson that they've learned from their parents. You know, people have very specific examples of things that they've taken away. And yeah, I love that you're calling out that we're gonna assume best intentions about our parents and their parenting.

Mackenzie Johnson:

Yeah, so let's like, let's dig in, I mean, to your comfort level, of course. Let's reflect, let's take this moment to say, Okay, what was the money context, this financial context that we were raised in, that imprinted on us? Yeah. So if you're willing to share, Suzanne, what are a few things that come to mind for you about money and the way you were raised? All right.

Suzanne Bartholomae:

Well, I was raised in a traditional household with a working father and a mom that stayed at home, didn't work until maybe I was in high school. Yeah. So in reflecting upon it, I think about, last week we talked about the two types of financial socialization. So explicit socialization is where parents are going to be teaching lessons very intentionally about money. That was not my parents, you know, they were implicit financial socializers. Okay, so they modeled certain behaviors, but they never really taught me any behaviors or skills around money. So I have to really think about, okay, so they weren't really explicit about what they wanted. But so what did I carry with me as a result of them not teaching me anything? And so, when I think about that, my dad really modeled the importance of a strong work ethic and earning income. Right. So that was instilled in me like, why I said I have to suffer at work, maybe, you know, he never missed a day of work, wasn't late, you know, was a model employee. And so, but my parents never encouraged me to work. And it actually was my peers that, you know, invited me. Hey, I'm gonna go work at a birthday party with the pony rides. You want to come with? And so, okay, yeah. So that was my first, you know, paid job but it wasn't my parents saying get out there and try and get some experience. I think the importance of paying bills on time and paying bills is another lesson and and this example I'm going to use really, I think, illustrates that parenting never stops. So my 87 year old mother when in her last month of life, and she was, you know, homebound, hospital bound, you know, called me, it was during COVID because we can only talk on the phone, and said, Hey, you got to pay my Best Buy bill. I'm like, this is what you're thinking about in your last, you know, few months or last few weeks of life. And so just to the very end, but she just really was a believer, you pay your bills, you pay them on time. Yeah. Yeah. And then she also taught me comparison shopping, buying things on sale, going for a bargain. She was an antique collector and liked to go to garage sales because you can get good deals there. And as an adolescent, I would sit in the car and be totally embarrassed, but like no way. I can't believe this, but lo and behold, I'm a total resale garage sale shopper now. You know, she was right all along. Just took a little while for me to catch on. So those are just a couple of examples, I think. Generosity is the other big thing. My parents were both very generous people and shared their resources to a fault, I think, in some cases to their own detriment at times. So yeah, I think that that is what they modeled for me. Yes. And neither are around anymore. I can't ask them, you know, if it was intentional or not.

Mackenzie Johnson:

Yes, yeah, as I but here you are, right, like with some of these gifts and opportunities and challenges, and it was, it's passed on. Absolutely.

Suzanne Bartholomae:

Yes. And how about you?

Mackenzie Johnson:

Well, I can relate to the bargain shopping. Right? That like, there's a skill set, right? There's a value there. And for me, I picture it almost as like stewardship, right, like making good use of what you have as a value around money. Yeah, there's a value, but there's also like a skill set of like, I know how to, even the knowledge of things go on sale around this time, right? Even knowing in the U.S., we have Black Friday. And if you need to make a big purchase, maybe you could wait until a good sale. You know, like some of that knowledge and stuff. So yeah, sale shopping. And I would say in terms of our financial state, for most of my life, I would say we were kind of in a, we had enough, but not a lot of extra. So like I remember as a kid feeling like well, I mean, I probably won't ask for that. Like, you know, that's a lot to ask for. But we certainly had enough, I was fortunate to have a lot of opportunities and extracurriculars and things that, you know, my parent chose to make a financial priority. And so it's not like I never had any opportunities, but there wasn't a ton of extra rolling around all the time. So yeah, this idea of like stewardship, like, earn your money and then use it wisely, was one. An explicit thing, my mom always talked about the 79 cent notebook method. So basically, it was like the super cheap ruled notebook, like lined notebook. And that was kind of how my parent approached doing budgeting, and making sure all the bills were paid, and making a financial plan for the month, week, year. And so that was kind of a process of, I don't actually remember, I guess, explicitly having that conversation, like teaching, this is the how you do this. But I remember that being talked about, and yeah, I remember the 79 cent notebook. It's probably not 79 cents anymore, but that's how it's always been referred to. And then the other thing that I think is interesting is that I feel like my parent often, especially as I think about being a teenager, it was like the idea that I should like go to school, get a good job, go have more opportunity maybe than they had, was kind of a value that was passed on. So yeah, like get good scholarships, be active in things that are gonna help you get scholarships, go to a good school, get good grades, so kind of this focus on investing right now to have in the future. So it wasn't necessarily investing in whatever financially, as much as invest in yourself to go so that you have more things down the line, was kind of a value.

Suzanne Bartholomae:

Yeah, yeah, same in my household. It was always an expectation that I would go to school and get an advanced degree. But my father, his mom didn't want him to go to college. And he was the first person in his family to go and get a degree. And so but she thought that the value of working was more important. And so luckily, he didn't listen to that. That was poor parenting behavior. Yeah, or parenting Sure. Yeah. So there's there's six

Mackenzie Johnson:

Yeah, yes. Oh, interesting. So we do we all advice. want to just acknowledge, I mean, Suzanne and I and altogether in the model of financial action. In the model everybody listening, we're walking in here with our own, I like the imprint word that you used, Suzanne, like what their before I jump into the big three, which I will in a second, own imprint from how we were raised that influences how we interact with our kids around money. What we do and do not but the model really demonstrates that we are in want to teach them about money. And so that's kind of what we control of some of the things around us that can help us dig into. We have this model, right, and Suzanne gave me the terminology. It's a model of financial action, that model of become financially well. And then there are things that we financial action from the Consumer Finance Protection Bureau, which I think all season I'm just gonna be like, yeah, aren't in control of, and our financial decisions don't happen they're cool, CFPB, the Consumer Finance Protection Bureau. But they have this model that they put out, a model of financial in isolation, right? And so some of these things are going to action, of things that influence our financial well being. So what actually, what are these influences? Why do I do what I help us be financially healthy, others are not. So the big do with money? And so it starts out with kind of a big three, right? There's like a main three. Can you just like, give three, and we talked about them in last week's podcast, are the us a rundown really quick, what are those three and then we'll dig into them? three drivers of financial wellness, right. And so the first one is behavior. The second one is knowledge. And I feel that way sometimes. then the third one is personality. And so what the model tells us is that if the environment is set up to unlock our abilities, these three drivers are not as important because we can unleash, you know, things that may, I say things, but yeah, that if the environment is set up, if there are structures in place, financial decision making becomes easier in a way. There's not as many barriers and so we don't have to have like for personality, we don't have to have that really strong trait of say perseverance or grit, because there's not anything standing in our way. So that's the idea and a model of financial action, or the model. Our human tendencies are not to act, and I think Mike touched on this, you know, if we're overwhelmed.

Suzanne Bartholomae:

Yes. We're procrastinators. We kick things down the road. Yeah. So yeah. So should we jump into these drivers?

Mackenzie Johnson:

Yeah, I do want to, I just want to like pause. You said that to me earlier, what you just said about the environment, and it didn't lock in, like it didn't register. So I want to repeat it back because I'm like, Whoa, that's insightful. Okay. So I want to make sure I understand it correctly. When the environment is essentially set up for success, these like, quote unquote, big three aren't as big, right? Like when the environment is created to be like, conducive to helpful and healthful decisions. The big three are still important, but like, the environment is really the click. Okay. Got it. Environment. Big deal.

Suzanne Bartholomae:

Yeah, you don't need these three big things quite as much. Yeah. So the first thing, behavior, what you actually do? So are you effectively managing your money? And so there's kind of two things related to that. And it's just income and expenses. So the money that comes in, you know, are you gainfully employed? And if you become unemployed, are you going to do everything you can to get a job, no matter what the job, so that you're bringing resources into the household? And then the second piece with the routine and effective money management, is this money going out. So are you living within your means? Are you intentional about your lifestyle? Are you frugal? Are you saving money? Are you avoiding and managing your debt if you do have it? Are you using credit cards prudently? So those are kind of the things about behavior.

Mackenzie Johnson:

Absolutely. Well, and I think, I was like, okay, in the mindset of financial action, thinking about it myself and thinking about what like my children, right, of what influences my children. I think this idea of like, do I do what I mean to do is really what I thought of with behavior. Like, I would like to save for this thing. There, I'm using thing. Or, like, I would like to, right, I would like to share more of my money, or I would like to be more generous or whatever the intention is, does behavior follow the intention is kind of what I felt like. In terms of financial action, am I doing what I mean to do?

Suzanne Bartholomae:

Yeah, you hit the nail on the head. Oh, good. Oh, you did.

Mackenzie Johnson:

I got that one. What about knowledge and skills?

Suzanne Bartholomae:

So knowledge and skills, do you, you know, what you know, and what you know how to do. So do you know how to seek out information that's reliable and unbiased? Can you process that information? And then once you have the information, can you act on it and make a financial decision? So it's not so much what we know. We don't have to memorize facts about credit cards and credit scores or mortgages or, you know, that kind of thing. The factual knowledge, it's important, but it's really how to do things, how to get your hands on the knowledge when you need it. And most people in terms of their interest in learning about finances is usually only when it's a timely and relevant topic. I'm buying a house so I need to know this information. Well, you're gonna learn all that information and probably download all of it out of your brain when you're done with it. Right? So there's no point.

Mackenzie Johnson:

Offload that.

Suzanne Bartholomae:

Yeah, yeah, exactly. Offload it. And so yeah, I mean, you'll have a mass of knowledge but it's really the doing things, having the consumer literacy and numeracy, you know, that kind of thing definitely go with financial decisions.

Mackenzie Johnson:

But yeah, and the note that I wrote as we talked through this, that I was like, Okay, how does this click in for me? And yeah, I really thought about that process knowledge, right? So as we think about ourselves with the knowledge and skills that we have financially, yes. Do I know how to fill out, like, do I know how to get a loan if that's something I need? Do I know which places to get a loan will lead me are going to be like greater risk versus safer? Do I know about like saving for retirement? Or even I think as simple as, like, do I know how to pay this bill? Right. Do I need to drop this off? Do I pay it online? How do I log in? Do I know the login? Yeah, yeah, All knowledge and skills and so, I mean, as we think about the big three.

Suzanne Bartholomae:

Yeah. And if we think about the environment, marketers, and manufacturers, companies, they

Mackenzie Johnson:

And I even think of like, when I have make it really easy for us to buy things, and maybe not so easy to pay for things, right? That's something in our in our context. subscribed, right, for like a payment, right? Like, I would like to subscribe to this thing. How hard, I need to know how to unsubscribe? How do I cancel? How do I get out of this commitment? I mean, subscription, you know, that's like more popular in today's economy. But right here, I have a thing on layaway. I think of like that language, we don't use that language very often anymore, that concept. But there is this knowing how to get out of a financial situation that's not great for us.

Suzanne Bartholomae:

Yes. And those companies will hope like, oh, hopefully it'll take them a month or two to figure it out so we can get a couple more payments out of them before, you know, and maybe charge a little bit.

Mackenzie Johnson:

Yeah. Yeah, I get overwhelmed because I couldn't figure out how to. Or the places that will make, I'm exposing myself a little here, if I have to call to cancel, that is hard. Let me do it via email, or let me like click a button to unsubscribe. If I have to call, I don't like that.

Suzanne Bartholomae:

It seems the extrovert that you are, you don't want to make that phone call.

Mackenzie Johnson:

It's my generational age. I don't want to call. I'll talk on the phone. I don't want to call for that. I don't like that. Again, that's like the knowledge of the process. And even that familiarity can be a skill, right? Like how familiar you are with a process like that. Okay, so behavior, knowledge and skills, and what's our third one?

Suzanne Bartholomae:

All right, so the third one, personality and attitudes, so how you tend to think, feel and act. So these qualities influence financial well being. They influence your financial behavior. They also kind of influence your behavior, how your knowledge impacts your behavior. Okay, so are you a driven person? Are you a planner? Are you materialistic? Do you possess grit or perseverance? So personalities, really, in the last decade, come into the scholarship on financial literacy and capability. With, you know, thinking about the Big Five, conscientiousness being the one factor that is, you know, if you're conscientious, you follow through on things. There's sort of this executive function skills that we'll talk about later in the season.

Mackenzie Johnson:

Yes, yes. Well, yeah, I think, yeah, the Big Five personality, right, that's a really common tool for measuring personality in the research. And that's interesting to think about exploring the connection between your personality and money that that's getting a lot of attention in literature is what you're saying.

Suzanne Bartholomae:

Yeah, yeah, yeah, it is with conscientiousness, it's still mixed, but that seems to be one that is associated with healthy financial behaviors.

Mackenzie Johnson:

Interesting. That makes sense because conscientiousness is kind of that like, planning, intention, right? Am I correct?

Suzanne Bartholomae:

Yes. And that grittiness, you know, that perseverance. If you're conscientious, you're not going to not pay your bill. You're not going to be late with your bill because you're conscientious. That makes sense. A lot of science makes sense.

Mackenzie Johnson:

Hmm. Well, and it's interesting as I of course thought of myself. Maybe that's the narcissism. Is that one of those? But even like the personality trait, and this can be a temperament, right? This can be related, temperament fits in here, personality attitudes, temperament, impulsivity. So I actually, I don't know if I've shared this with listeners before, I was diagnosed with ADHD within the last year, last year. And so I do, I think of on the spectrum of like, we have personality and we have temperament and then we have diagnosis, right, is in there. And the impulsivity that can come with that and the procrastination, right? Like, that is kind of an attitude of like, oh, I won't be dealing with that yet. But yeah, the impulsivity is, I've seen, I mean, I haven't been reading so much in the literature right now. I'm like exploring it on social media. That's my starting place for learning. But following and finding some accounts that I trust, but yeah, learning about the connection between ADHD, impulsivity and money and impulsivity and food and impulsivity in parenting. Hmm, what? So yeah, there's a lot that goes into who we are, like my internal resources, who I am, what I believe, how I interact with the world, naturally, that influences some of your financial decisions.

Suzanne Bartholomae:

Yeah, absolutely. It does. And so I'm sure, can you think of an example where you see it in your spending or any of your other financial behaviors that you weren't aware of?

Mackenzie Johnson:

In my spending, but yeah, absolutely. And I can be really, before we did a lot of online shopping as a family. My partner used to tease me when we'd be at a place. He is a by the list shopper. And I'm, like, I am much more prone to like, oh, but what about, oh, look at this idea. Part of that is creativity but part of it is impulsivity. And so that versus he like, this is the mindset, this is what we do. I'm not so interested in being flexible on the list. And I'm like, oh, whatever. And so yes, I can see that in spending sometimes. Sometimes it works to my advantage, and I don't know whether I'm cheating my brain on this, but if I don't know what to choose, I just feel like I'm overwhelmed by this decision. I'm just going to choose whatever feels like is probably more responsible, right? Though that could be misinformed depending on the knowledge that I have. But yeah, the shopping in particular, especially online, right? Now that we're in an economy that is so online, which makes it easier, right? Versus if I had to physically go into a store and those things. Again, be conscientious. I don't know how high. I don't even know the measure for conscientiousness. I can be but my maybe attitude, right, that belief system versus do I do what i mean to do?

Suzanne Bartholomae:

Right. It kinda overrides it. I think if

Mackenzie Johnson:

Yeah, but I do think of that with my kids. Oh, yeah, yeah. you're aware. You know that I recognize some of the impulsivity in one of my kids in particular. And so really trying to think about what am I implicitly passing on when I model that for them? Like, oh, how about this? Oh, how about this? You know, that's not something I want to gift, right? That's not something I necessarily want to pass down. And so meaning that I need to pay more attention to what I am actively talking about related to that impulsivity, even if it's just verbalizing like, this is cool. My brain is telling me, my brain is like giving me the gimmies, right? That's a conversation we have in our It's hard. house a lot is like, oh, this is giving me the gimmies. I really

Suzanne Bartholomae:

Well, you know, your list, shopping by want to get it. And like, okay, but this isn't a thing that I need. And so right. I can have some of those explicit and implicit. list, that can be overriding some of the maybe influence that you're giving them through impulsiveness, right, talking through needs and wants. So there's a lot, I think you're already a great financial parent, Mackenzie.

Mackenzie Johnson:

Thanks, thanks. I'm hoping that I have some strengths, but also recognizing that I probably have some areas I can work on.

Suzanne Bartholomae:

We all do, right?

Mackenzie Johnson:

Right, but so I do, I think, you know, looking back at this big three, and like you said, there's six. There's other components here but these main three of behavior, and how what I'm passing on intentionally and unintentionally to my kids, the knowledge and skills, and then same thing with personality and attitudes. We know they get their temperament from us. Personality is built on top of their temperament. And so yes, all of these things roll into what we're passing on to our kids related to, I mean, everything, but related to money this season. Right?

Suzanne Bartholomae:

Right, exactly. And so those three drivers of financial well being are very individual characteristics or qualities, factors, versus the next three that we're going to talk about which are more structural, environmental, type of qualities or factors that influence financial well being.

Mackenzie Johnson:

So some of it that we influence in the first three more than we influence. In the last week a lot more that won't be within our control all the time.

Suzanne Bartholomae:

No. Yeah, exactly. So first one, social and economic environment. So what surrounds us, who our family is, our community. So that can limit or expand our opportunities, right? So family, friends, community, our upbringing, our home life, you know. Think about a child whose aunt is an entrepreneur, right? So think of the opportunities or exposure to the information that that child has versus someone who's not. Right, so society is shaping and influencing us or our children through social media, advertisements, government programs and policies. One that comes to mind for me is the child savings accounts where like in San Francisco, the entire kindergarteners in San Francisco get a child savings account. And so this is money that can be used towards training and education. And there's just really, I think it really makes me go, oh, wow, you know. It doesn't matter how, and there's a lot of different programs that have been enacted, there's child savings acts on school level basis, city, states. But it really instills in families who maybe have never aspired to go to college, it instills hope in them, no matter what the amount. So at $15, you know, there's been some studies that say that just by the symbolic act of saying, I think that you can go on to do great things, you know, training that gives the family, the parents and the children, this great feeling of like, okay, you know, this is within reach for me. Yeah, that's an opportunity that, you know, for the child that doesn't have that in their environment has a very different outcome.

Mackenzie Johnson:

Absolutely. And yeah, not that it's like the difference, but it's one of them. Yeah, like, all of these things build on to each other to create whatever is the long term wellbeing of people.

Suzanne Bartholomae:

Exactly. And then the other one, and that is, it's the economic environment. So the economy, which is an obvious one, but what's happening in the economy, whether it's a pandemic or a recession. With the pandemic, you know, economic stimulus checks were available to families, and that was not there, you know, previously, and they've actually stopped so they're no longer there. So, yeah, there's the environment, social and economic, big ones.

Mackenzie Johnson:

Oh, yes, absolutely. So, okay, social and economic environment, lots of things that go into that. And something you said earlier was, you know, we, of course, are talking about this in the context of parenting, but there's like other agents, right? Like, it's kinda what you're getting at, like a socialization agent is the term that I've been learning from you. But parents are a main one but in the social and economic environment are other things, like there other family members, organizations they're a part of, and society and media.

Suzanne Bartholomae:

Yes. Thanks for the clarification. So the parents that are listening know that there are agents that are surrounding our children. Think about concentric circles, which we like to think about in our scholarship that are influencing your child and then what we're talking about today are what influences our financial wellbeing specifically so those three drivers of financial wellbeing and the context.

Mackenzie Johnson:

And that they're getting this from us and from other places is what's in the environment.

Suzanne Bartholomae:

Yeah. Oh, yeah. Oh, yeah, I think right.

Mackenzie Johnson:

Okay, and then another tidbit of the six in the model, one of them is decision context. And this is the one that I was like, okay, I can talk about that. That one I'm familiar with, Suzanne, because I'm influenced by it.

Suzanne Bartholomae:

You go, you go.

Mackenzie Johnson:

But so there were three main things that I thought about. And this is not based on anything, this is just like, what came to my brain related to decision context. One is like how easy it is to choose, right? Like how easy or hard something is. So even think of like eating out versus eating, like making something at home. If we have food that's like very laborous to prepare, I am more likely to like, can we just go get something, right? And so the decision context of spending money on going to get like going out to eat or staying in, the context is how easy is to make, right? So I thought of that. I also thought of being pressured or influenced. So one, I think of literal influencers on social media. And I see this person that maybe lives out, or seems to live out, my values, or I think they're cool, or they have this trade or whatever it is and they suggest a product or a service and then I'm influenced, right? The context I'm making a decision like do I want to do this thing is now influenced by this person and their values and these things, right? So that value so like influence is one within influence, a model about influence, okay, decision context when we're influenced, but I also thought of when we're pressured. My husband does not like salespeople. I mean, not that I'm like salespeople, yay, but he really doesn't. He doesn't like to be pressured. Right. So when he's making a decision, he wants people to get out of his way, especially when he's making a financial decision, like a large purchase, like an appliance or like a vehicle, or, you know. He does not want anybody who might be pressuring him. And so again, this is one context. Even like, one of my sisters is getting ready to get married and the decision of getting ready to make a wedding purchase, like a wedding dress, when you're in the context of this store with a salesperson who gets commission with all of these things. That's a decision context. And like, should I make this decision right now? Should I delay this decision? And then the other one that you pointed out actually was information overload or too many choices or decision paralysis. That's also a decision context of there's too much here and I can't, I'm not ready to choose, or I need all of it to go away so I just choose one. Right? Yeah, yeah. decision context is like, I might want to use the word exploited. Right? Like toxic sales people or making it hard, like we were talking about, making it hard to get out of a financial commitment. So that yeah, decision context. We all want to think like, I'm a rational consumer. There's a lot of things that make us not so rational sometimes.

Suzanne Bartholomae:

Oh, gosh, yeah, that's true. Yeah. So I think the example we were talking about was like retirement savings or wanting to save, right? And so if you're lucky enough to have an employer that provides retirement savings, this whole opting in that you're talking about that, if we don't have to think about it, and we make, you know, so that, okay, a portion of our paycheck is going to automatically go into retirement savings. We're not giving the employee the choice when they sign on as an employee.

Mackenzie Johnson:

Instead we're gonna assume you want us to, until you tell us you don't. Flipping that. Yeah.

Suzanne Bartholomae:

And it's using our human tendency to not like the hassle of having to deal with things like making phone calls, or clicking a button, getting online and clicking a button. They take advantage of that for our own good. So that's an example where something good is happening.

Mackenzie Johnson:

Thank you. A positive example.

Suzanne Bartholomae:

Yeah, versus you know, you showed me your wallet earlier, which was your iPhone, right?

Mackenzie Johnson:

So yep, I have two cards right on my phone. That is where, I don't carry a purse, because I set it down and I lose it.

Suzanne Bartholomae:

Yeah, so even just having Apple, like having the wallet, right. So you're scanning your phone. That makes it so much easier than pulling the wallet out of your purse and counting out maybe money. Credit cards. You know, there's definitely evidence that because it's abstract, people spend more using credit cards. They don't make the connection like, oh, this bill, you know, what I'm spending now and it's gonna be due in 30 days. Yeah, so the form of currency that we're using.

Mackenzie Johnson:

And all of those things are some of the context.

Suzanne Bartholomae:

Yes, yes, exactly. Exactly.

Mackenzie Johnson:

One more here. Right.

Suzanne Bartholomae:

One more. So what are the available opportunities in your environment? So what options are open to you? And so again, getting back to that economy, so what economic opportunities are available? Do you live in a community that has good paying jobs, maybe has public transportation to get to jobs so that you can earn a sufficient income to reach financial wellness? What's your social capital? So like, who are your family? Who are your friends? You know, who's your network? Can you rely on them if you do have some kind of a financial shock to the system or some kind of financial need? And that also gets into because the Consumer Financial Protection Bureau, they're the watchdog on the street when it comes to products and services. That's the other big piece. Is there access to safe and affordable financial products and services? Oh, absolutely safe and affordable.

Mackenzie Johnson:

Okay, so I'm gonna run down these six again, behavior, knowledge, personality and attitudes, social and economic environment, decision context, and available opportunities. That's what goes into this model of financial action.

Suzanne Bartholomae:

Right. So and with the all these adding up to our personal financial well being and so yeah, we're that's where we end up.

Mackenzie Johnson:

Yes. Oh, awesome. Okay, well, our strategy for the week and again, if you're watching this pattern from season to season, our strategy for financial parenting is to reflect, right, is to look at what our imprint is, what are the ham, right? What is the ham that's been passed down to us financially? And what ham do we want to pass on, whether implicitly or explicitly and so, okay, so a few questions that we can reflect on. What do we currently do that teaches our kids about money and finances on purpose or on accident? What do we want our kids to know? So, in the long term, what we want them to know about money and finances? And then what do we hope our kids do in the long term? What can we be doing right now to help influence what our kids actually do in the long term related to money. So, nice opportunities, just a slow down again, and then we don't always, like you've said, we're not always thinking about our financial socialization of our children. We got to slow down a little to give it that attention. Because there is long term like we established in episode one, there's a lot of long term, their financial well being is influenced by it, their overall well being can be influenced by it. So there's a lot of power here. And luckily, we can take this moment, this podcast episode was just like, hey, yeah, what influences me? What are the things that are going to influence my kids? Some that I have some control over and some that I don't.

Suzanne Bartholomae:

Yeah, yeah. So I love that it is, it's an invitation to parents who are listening to just go ahead and reflect on what were those lessons that you learned? And I would say that, you know, parents not, I would urge them not to wait until they're, like, perfect before they start having conversations. I think there is some polling with parents who say that, you know, I think about a third never talked to their children about money. And one of the reasons cited is they're fearful. And I think part of that is like, I have to be the perfect money manager before I can start passing on lessons. And, and that really isn't the case. You know, I mean, they're learning lessons, as we said, from those different socializing agents, whether it's friends or school or, you know, faith community, whatever it might be. And so it's okay for those to have a role. But parents are the primary socialization agents. And again, it's that underlying value of what you're hoping they'll learn. And so I think you have to be intentional about what you're doing and think and take the opportunity to think about, oh, gosh, okay, maybe I do need to bring them more into the conversation about how we spend money or how I'm shopping and these are the takeaways I want them to have. Because, you know, as parents, we all are working so that our children are going to be cofident, so that they're going to be financially successful. That's what we want for our children. And so what are the skill sets, the knowledge, the information, the values that they need to get there?

Mackenzie Johnson:

Oh, absolutely. And what I really hear and all that, too, is, like kind of giving us permission as parents, let's do this imperfectly. Right. Yeah. Yeah. Let's try it out. Yeah, I'm gonna do it imperfectly that, yes, I can be impulsive. Fortunately, it's like, I mean, I want to like give the caveat, I'm not like making horrible decisions that are putting my family at risk. Right? Luckily, I'm doing this within the realm of our family can afford to make this impulsive decision. But that's something I'd like to work on. And I can still show up in this moment imperfectly, even though I have growth to do in that area, and some others. I can still do some good, right? I can do more good than harm in having these conversations. So let's show up imperfectly here, as I mean, yeah, as we reflect on this, we imprint on our kids whether we mean to or not. Yeah, a little note, I feel so warm and fuzzy, Suzanne.

Suzanne Bartholomae:

Well, I'm gonna take a different direction, just for a second and just say that, you know, when you asked adults how they learned about money, a lot of them will say, Oh, well, from the school of hard knocks, right, from financial mistakes. I learned from my financial mistakes. There's a fair proportion that will tell you that, and that's not the answer you want your child giving to somebody that asks them that question, you know, 20 years from now, right? That I learned from the school of hard knocks. Let's not make them go through the school of hard knocks. Let's give them the skill and the toolset that they need so that they get it right from the first, you know, out the gate.

Mackenzie Johnson:

Okay, and I hear you saying something, kind of like the idea of experiential learning, like, yeah. And maybe they learned the hard way, which like, with high consequence, and in our upcoming podcast episodes that are coming up in a little bit down the season, we are going to talk about that. How do we do that for different age groups? Yeah, so they don't have to learn it with like, high consequence as an adult, hopefully.

Suzanne Bartholomae:

Right, right. And I'm not saying, and you gave a great example in an earlier conversation I had with you, about you had to give your daughter a hard lesson about taxes. And that's the other thing I guess we should tell parents is that sometimes your heart has to hurt a little bit, you know, to make it a growth experience for your child. Right. So do you want to give that example of what you told me

Mackenzie Johnson:

Yeah, okay, actually, actually, I'm gonna about what happened? leave them in suspense because I want to save that for the age-based one. Y'all get ready. There's a conversation about taxes with my school-age child coming later this season. No, that's the one that I have. That's the example I have. I gotta cling to it. Can't wait, I'll tell you all later, I promise. But for now, this brings us to our Stop. Breathe. Talk. space. So even if I'm not ready to share that example, I'm gonna have to come up with another one, depending on what Mackenzie asks us. Hey, Kenz, hey, what have you got for us today?

Mackenzie DeJong:

Um, so I think through all of, you know, listening through your whole discussion, I think what my question is, is like, what's the next step past? So you have a strategy and like, my brain was like, okay, then what's the next step past that strategy?

Mackenzie Johnson:

Cheating ahead.

Mackenzie DeJong:

I know, I know, part of it. But like, so I guess, as we prepare for the upcoming episodes, and what we're doing is like, oh, so we've tasked them with reflecting on where they're at. So then what would you say is like the first, and maybe it is what you mentioned in that conversation post what you're just talking about with reflections, but like, what is that first next step? I said to myself, you know, that's the thing I reflected on, that's what I want to change. What would be the next step in that process? Or do we want to wait on that?

Mackenzie Johnson:

I want to answer your question with a question is what I want to do. Okay. Why does reflecting not feel like enough? Like why taking that time to, and I think reflection can be more than one thing, right? It can be like a really emotional introspective way you think about things. But there's also opportunities for reflection of like, okay, I say that my values are to spend my money wisely. When I go through my finances, am I spending my money the way I intend. Right. So I do think there can be like a really tangible way of doing this reflection. We talked about it in a very like, in your head cognitive way. So that's one piece. I'm like, ooh, why is that not enough? Hmm. But the other thing I want to say is, yeah, just that thought process, I think we have to like pull it back that we're so quick that like, I want to make this change, or I want to do this thing. And I think we have to pull it back first to understand like, why I do these things? Because it might be that you need to be more conscientious. I need to make a plan for this specific challenge or I need, I don't like the planning part. Like I want us to not yet. So not yet, Kenz, not yet.

Mackenzie DeJong:

Here's the next step. Let it sit in that for a little bit.

Mackenzie Johnson:

Well, so that is my bossiness to your question. Suzanne, do you have something more friendly to say?

Suzanne Bartholomae:

Oh, no, no. Well, I was gonna say, okay, we said that we've asked them to reflect. So maybe what we can ask them to do is when they're reflecting, sit down with a piece of paper, a blank piece of paper, three columns. And column one is, what did I learn as a child? What were the lessons? What were the values? Column two might be, what am I currently doing with my own child? And then maybe make some arrows between column one, column two, right, and see how they manifest? And then column three are the ideas about where do you really, what do you want to be doing as a parent, right? And so make a list of those things, and then make some arrows between column one and two to column three. So that's intentional. It's getting it down on paper. And it's still reflecting. But it's also, I'm a visual person. I don't know. So yeah. I think laying it out there and saying, oh, these are connected. Those are all, look at the ham that went from column one and column two. And do I want that ham in column three? No, let's keep it in column one and two, right?

Mackenzie Johnson:

Science of Parenting workbook, coming your way. Maybe not? Maybe not. Oh, my gosh. I love that.

Suzanne Bartholomae:

Well, it's just your great questions, and we put it into a table. Yeah. Yeah. And if you are partnered, and you're listening, and you're partnered, I think doing that exercise separately, and then comparing them and having a conversation and saying, okay, are we doing this? Are we being the parents we want to be? Hmm, you know, that intention versus the behavior. Because we don't, you know, yeah, we don't stop to, to think through a lot of things that we do.

Mackenzie Johnson:

We have an opportunity here to do that. And this is the opportunity, right, you're listening. You're interested. So okay, Suzanne, you are, I wanted to say sold, not sold, permanently invited. Suzanne is clicked it in, on the slate, Science of Parenting team. That model, I mean, I was already sold, but just in case anybody else wasn't, that's the good stuff she's bringing in.

Mackenzie DeJong:

So in summary, give it a second, write it down, and then we'll come back to what the physical actions are in the next few episodes.

Mackenzie Johnson:

And if you really can't wait at the end of episode one, we did give like a really quick little rundown of some of the things you could be digging into. So if you really can't wait, you can go back and think about that, but more good stuff to come.

Mackenzie DeJong:

Perfect. Thank you.

Suzanne Bartholomae:

Great question. Thank you.

Mackenzie Johnson:

Yeah, that was a good one. That was a good question. And yeah, I immediately like wait, I want to answer your question with the question. So yes, in today's episode we did, we've been digging into what is imprinted and what are we passing on and what the literature, what the research really tells us about what influences our money decisions and our finances. So we have the model of financial action with those six things of behavior, knowledge, personality and attitudes, social and economic environment, decision context, and available opportunities. All that's going to influence our financial well being and all those things are going to influence our kids, their financial well being. So great to talk through this, but we've got more good stuff. I mean, we kept saying like, oh, we'll cover that soon. What is next? What is coming next, Suzanne?

Suzanne Bartholomae:

Alright, Mackenzie, in our next episode, we are going to talk about the goal of raising children to become adults with financial well being so we're really going to dig into how do we define financial well being. A little spoiler alert, it's financial security and financial freedom. But what makes it? You know, what are the quadrants that make up those two big concepts?

Mackenzie Johnson:

Yes, there you are with that visual.

Suzanne Bartholomae:

Yeah, I know. Right?

Mackenzie Johnson:

Awesome. Well, we are excited to chat about that, and everything else this season. So thanks for joining us today on the Science of Parenting podcast. And in case you haven't heard, you can subscribe to us on our YouTube channel. And you know, you can just be sure that you never miss any new content from us that way.

Suzanne Bartholomae:

Yeah, so come along as we tackle the ups and downs, the ins and outs, and the research and the reality all around the Science of Parenting.

Anthony Santiago:

The Science of Parenting is hosted by Mackenzie Johnson, produced by Mackenzie DeJong, with research and writing by Barbara Dunn Swanson. Send in questions and comments to parenting@iastate.edu and connect with us on Facebook and Twitter. This institution is an equal opportunity provider. For the full non- discrimination statement or accommodation inquiries go to www.extension.iastate.edu/diversity/ext.