Instilling a Sense of Financial Responsibility in Your Kids

3. Don't Fight Against Human Nature. We individuals are programmed to behave in certain ways. Just as night inexorably follows day, we may expect certain human actions to trigger other actions. As one example, it is now established, perhaps not unexpectedly, that if a high school student is rewarded for report card grades, with $100 for each "A" and $50 for each "B," that the student's grades will rise. The anticipated reward triggers self-interest, with a desire to collect the money as the primary motive. From the student's perspective, any learning acquired that may in the long run prove beneficial is probably unimportant. What counts is cash in hand. Over the years I've witnessed a lot of strange behavior that ignored human nature. One of the more bizarre instances concerned an indolent young woman, who over many years repeatedly received instruction from her wealthy father on how to balance her checkbook. She habitually issued checks whenever she chose. If the account balance fell below zero, the bank phoned her father who deposited more money in the account. Somehow her father never understood that his instruction sessions ignored human nature; the checkbook balance held no meaning for her. So what is the purpose of this lesson? It's to stress the importance of parents' awareness of what is important to their offspring. Human nature dictates that all actions actually have real meaning.

AL JACOBS has been a professional investor for nearly four decades. His business experience ranges from real estate, mortgage, and securities investment to appraisal, civil engineering, and the operation of a private trust company. In addition to managing his investments on a day-to-day basis, he is a featured financial columnist for both online and print publications. He is the author of Nobody's Fool: A Skeptic's Guide to Prosperity.