So today for a class I was reading a chapter on the history of behaviorism. Behaviorism, a largely rejected area of study, still has a strong impact on our ideas of education, parenting, and social policy. I would like to focus on the role of behaviorism in financial planning. The federal government encourages us to buy a home so they use negative reinforcement (removal of tax burden). They use the same method for retirement. With children we often use positive reinforcement (allowance) to encourage chores.
This goes against the findings of cognitive psychology that intrinsic motivation is reduced by reinforcement. One study included in our text was about children playing with markers. The group of children who were promised a sticker if they drew a picture, later drew pictures less often when there was no reward. If we assume that children naturally do not like to be messy, we should not promise positive reinforcement for cleaning. With adults, we see this in open source communities. Once programmers are offered money to build a product they become listless and refuse to work on the project.
I have a strong interest in the psychology of finances and especially how we teach children about money. I have been struck lately that we tech children first how to spend money and then later how to save and earn money. The first lessons a child learns about money in our school system is how to recognize various forms of cash and coin and how to make change and convert between these amounts. Early word problems are about purchasing items and getting change back, not as selling items to someone and giving them change. Much, much later, children learn about interest and the difference between monthly payments and paying up front. I'm hoping this quarter to explore the psychology of economics education.
Behaviorism and Money
March 30th, 2010 at 05:27 pm
March 30th, 2010 at 06:23 pm 1269973421
I know this is going to sound a bit crazy maybe, but I think it'll fit right up the Behaviorism alley.
For what it's worth, I do think there are two subtle aspects of money. There's the mechanical side, such as how cash, checks, and credit cards are transacted, for example. But there is also the psychological side. Why do are people motivated (or unmotivated) towards money. What is the underlying drive? Is it greed so they can buy more toys? Or is it fear so they are seeking security? Or is it none of the above, and that's why they don't understand money at all?
I find that a lot of our formal education focuses on the mechanical side of things, and that is correct. However, what's really important to me is the psychological aspect of it. Why is money so important? I don't think formal schooling can teach that, and that it's up to the parents to demonstrate it.
March 30th, 2010 at 06:39 pm 1269974381
My not so small proposal is to begin money instruction not with coins, but instead with concepts like where money comes from and all the kinds of things it can buy you.
March 31st, 2010 at 12:54 am 1269996857
I totally agree with your last comment. We started our children on an "allowance" system very young. How can they learn how to spend money if they can't learn how to manage an "income." Though they may not be able to "earn" an income for many years, I think money management skills are for more important than any debate about "allowances." I can change the word "allowance" if it makes others feel better.
Of course, my parents gave me an excellent financial education, and we take the same approach with our children. BUT, I felt they dropped the ball a bit when it came to the big picture and long-term planning. Won't hold it against them, but we keep that in mind for our children.
We are very open with our 4 and 6-year-olds about money, trying to give them that "education." We want them to know where money comes from, what it's purpose is, how to manage it, etc., etc. Which involves a lot of talking and setting examples, more than anything. Interestingly, my 6yo has been on a mission to try to stump me and prove not everything costs money, as I always say. He came up with something really clever the other day, that didn't cost money, and was proud when he found an answer. (So clever, I don't remember what it was!!!). He asked me another day if things like water or garbage pickup costs money. He's been thinking about it all very hard.
Of course, around the same time, he one day asked me if I could work less if we moved into a smaller home (say, next door). This was a good question and led to quite a discussion. How the savings was not big enough for me to work less, how we had already done x, y, z so daddy doesn't have to work at all (& how lucky he is for that), and how sometimes we don't mind working a little more for things that are important to us. Needless to say, these are concepts my 6yo grasps more than some adults I know - after many similar discussions.
Young kids are so curious about how the world works. I can definitely attest that my children are more interested in learning how many works and its place in the world, more than being able to recognize and count coins.