Saturday, February 16, 2008

First National Bank of Dad by David Owen

I think the first time I remembered David Owen's name was from an article from The Atlantic about M & Ms. I just searched their site, though, and couldn't find it so maybe it came from somewhere else. He also contributes a lot as a staff writer at The New Yorker.

He's a funny writer and explains things well, and I also read a book of his about buying a house, The Walls Around Us. I vividly remember how he found the longest lasting paint ever--this gray paint they use to paint nuclear reactors and which is basically one extra layer of protection against meltdown. He wanted to use this paint on his house but it cost hundreds of dollars a gallon or something.

His latest books have been about golf and I'm not that interested, although I do read the articles in the New Yorker about the game, and his most recent piece was about nicknames.

Okay, so I just finished reading his short book from 2003, First National Bank of Dad: The Best Way to Teach Kids About Money. Here's the review: the idea is interesting and worth trying, the book is not so great and maybe is a library check out.

The idea: Owen wanted to encourage his kids to save money but the traditional way: "Here's $10 allowance--let me just take $2 from it to put in your savings account (i.e. you'll never see it again)," makes "saving" seem like a tax that should be avoided. And a 3% per annum interest rate doesn't really thrill anyone either (maybe it will as the economy implodes. Anyway). So he set up a bank on his computer where his kids would earn 5% interest per month. Suddenly, the benefits from saving are clear.

A lot of the book is also about just giving financial responsibility to your kids. Rather than having emotional arguments about whether you're going to buy them a souvenir or a candy or cds or a video game, let them use their money however they like. The point of the bank is that they recognize that saving is a good way to "use" the money. Another good point he makes is that most of us learn about money by making mistakes. By giving kids a stake early, they can make those mistakes earlier and at less cost. There are lots of anecdotes about his kids's economic education told in Owen's usual clear and humorous manner.

So that's about 160 pages (wide margins). And then he tacks on an extra chapter all about reading to your kids. From the examples given, this book is directed at middle to upper middle class parents. Most of them appreciate the power of books. I certainly don't disagree. This chapter is totally unnecessary. I feel like he wrote a short book, realized he owed 200 pages, then realized he would never get a chance to write about parenting again and typed out some more pages about reading. Oh, also his wife writes books for kids. I don't know if that's related.

All in all, worth knowing about, maybe not worth owning.

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