The Oreo Test

A friend relayed a story about when his son was very young years ago. Tommy developed a real love for Oreo cookies (who doesn’t?) He loved them so much that each time he went to the neighborhood market, he would try and come up with ways to buy the small packets of Oreos that are always near the checkout counters. He learned the cost of the cookies and soon, when presented with an opportunity to purchase something, he would calculate that the value of the item was the equivalent to “X” number of Oreo cookies. From there he made his decision whether the impending purchase was worth it.

His parents soon learned to use the Oreo test when the family was out shopping. When Tommy asked for a particular toy or game, his parents would tell him the cost of the toy and then ask him if it was worth “X” number of Oreo cookies.

A few years ago, Dr. Phil McGraw introduced this idea of a child’s currency as a tool to help parents practice discipline. He explained it this way, "If you control the currency, you control the behavior that currency depends on." Once you understand what your child values, you can withdraw positive things (taking away the toy) or introduce negative things (making them take a time-out) as a form of discipline.” The Family First Workbook by Dr. Phil McGraw; Simon & Schuster Adult Publishing Group, September 2005

What we are really talking about here is behavior. Finding out what your child values will help you connect personal finance concepts and ultimately, help you to shape the behavior you are looking to have your kids follow as it relates to how they handle their money.

A Two-Way Street

Remember, what I am suggesting here becomes a two-way street so pay attention to the road signs! Children will be observing and taking note of your currency too so make sure that you are consistent. Be prepared to explain those impulsive purchases of beer and snacks for Sunday’s game and make sure you connect the dots for your kids so they learn to develop choices.