John Lanza, financial education expert and Chief Mammal at MoneyMammals.com, joins the podcast to talk about why financial education should start early; how to make it fun, concrete, and experiential; and in what sense money might actually be able to buy happiness.
Key Insights and Takeaways:
- It’s important to make financial education simple, concrete, and experiential from a young age. Marketers are going after kids, so high school is too late to start teaching them about money.
- Humans derive the greatest happiness from experiences, not things. What does that mean for credit unions?
- Credit unions can focus on schools as a channel to open up relationships with parents. Many parents are on the lookout for community-oriented institutions, like credit unions, that are focused building a better world for their children to grow up in.
Read the full transcript below:
Cameron: Hello and welcome to another episode of The Remarkable Credit Union Podcast. We created The Remarkable Credit Union Podcast to help leaders and marketers think outside of the box about marketing, technology and community impact in the credit union movement. Every episode we bring on expert guests from inside and outside of the industry for conversations about innovation. Our goal is to challenge your preconceptions about business as usual, provide you with actionable takeaways that you can use to grow your membership and help you to magnify the positive impact that you make in your community. Today’s big question, what role and what shape should youth financial education play in the strategy of the 21st century credit union?
Cameron: Today. I’m very excited to welcome John Lanza. Among many other cool things, John has the best title of anyone I’ve ever interviewed. He is the chief mammal at Snigglezoo Entertainment. John is also the proud father of two teenage daughters, an avid board game player, and he runs a lot. He actually told me he even ran three marathons, which was very impressive to me. If you want to learn more about John, we’ll talk about a lot of his resources throughout, but you can find him online at moneymammals.com. For those of you who didn’t catch that, it’s moneymammals, M-A-M-M-A-L-S. We’ll learn more about that. John, thank you for joining us today.
John Lanza: Cameron, thanks for having me. Glad to be here.
Cameron: Can you start by telling me just a little bit about why it’s important to start financial education at a young age? Because I’ve learned from your stuff that we tend to hear financial education and I think we kind of go into a box. We think financial education is this one specific thing and you have a very different take on it, including starting earlier.
John Lanza: Yeah. The reason you want to start earlier is because the awareness of money and just as importantly kind of media and advertising, they are out there in your kids’ faces right from the get go. Kids are being marketed to from a very, very young age, young as two. So they’re getting these money messages and most of those money messages are to spend. That’s why we want to start early because we want to get other more positive messages into their heads about money behaviors. So we’d like to talk about the money mammals themselves singing about sharing and saving and spending smart. So the sharing is charitable giving, the saving is for longer term items and then we add the smart to the spending because we want kids to be mindful of all decisions they make with money but certainly with regard to spending because that’s kind of the most obvious and most often use that they’re going to have with money.
Cameron: Can you tell me a little more about why you think, why is that different than what happens to kids in when I think back to high school, I remember learning how to, this might be betraying my age, I remember learning how to balance a checkbook and compound interest and it wasn’t bad for sure, but it was also pretty … It felt a little wonky and it felt a little abstract at the age of 14.
John Lanza: Yeah. I think the wonkiness is exactly the problem. The whole reason that we got into this was my wife and I had our first kid and now she’s 15. She was six months old and we knew we wanted to raise our kids to be money smart, and my background was somewhat education, someone entertainment and it was kind of a natural thought for me to think, well, how do we take something that’s pretty a boring on its face, like you’re talking about kind of wonky and make it fun for kids? The best way that I thought to do that was to have some characters, have them sing about it, mostly just make it something that kids want to learn about. The other thing is distilling it down. So when you get older you’re getting into these things like balancing a checkbook, compound interest, understanding how investments work, and that can all be really intimidating, but we kind of focus on these core money smart skills.
John Lanza: So those are saving for goals, making smart money choices and distinguishing between needs and wants and you can actually make those things kind of fun because every kid’s going to have stuff that they want, every kid is going to find some kind of goal they want to save for, and making choices is something that you have to do all the time. So being mindful of how you do that makes it kind of, we just made this kind of a fun thing for kids and the nice part about that is once you’ve made it fun for kids, you’ve kind of primed the pump for the adults to teach them something. They can only learn something because you hit on a real key issue here, which is that it’s abstract. Even for a 14-year old, some of these money concepts can be abstract. But if kids don’t have money then, especially for like a five or six-year old, they need some actual cold, hard cash to learn how to kind of save for goals, learn how to spend it, learn how to interact with it. So you want to take that abstraction out as early as possible.
Cameron: You make it fun. You make it concrete. You make it experiential.
John Lanza: Exactly, yeah.
Cameron: All right. I like that. It’s really like a tagline you can explain.
John Lanza: I know, I like that. That’s very good. We should trademark that one.
Cameron: So, all right. So the fun stuff. Tell me a little bit about the money mammals. Who are the money mammals? What was your inspiration for creating them?
John Lanza: Yeah, it’s funny because, so the money mammals are Joe the monkey, and he’s got three friends, Piggs the bank, his sister Marmoset and his friend Clara and they kind of learn through making mistakes, which is kind of what kids are going to do. So they go about their day and they’re learning about making money mistakes as they go through whatever they’re doing and having fun doing it. But Joe the monkey, I had this character in my head for a long time and the problem was he was never really doing anything. He was just kind of sitting around the house and I thought that might be kind of funny because Seinfeld was a show about nothing but I was taking it a little too literally because it’s not really about nothing.
John Lanza: Then finally when we had this kind of epiphany, and my wife and I are like, “I think there is something here with this idea,” and we realized, we did some research, that’s something that kids should learn. It’s something that they should learn early and I think we can make it fun and there’s not that much, there’s almost nothing out there. So Joe the monkey had a place to be now and he had a reason to be. So he was really the inspiration and then I really have no idea why, his friend is a pig. That just kind of naturally happened.
Cameron: Piggy banks, man. That makes sense. It made sense to me.
John Lanza: Right. No, I mean he was. But the idea of the blue pig was kind of like a wacky thing and then he’s got a camel for a friend and he’s got another sister who’s a monkey so that all, it just kind of falls into place and it’s fun. We made it a lot of fun. Then we wrote some fun songs. My brother wrote the songs and we just had an absolute blast creating this thing. In fact we tried to puppeteer at first, my wife and my brother and I and we were absolutely awful. But if we didn’t do that, we may never have actually created the money mammals. We realized, okay, time to hire some professional puppeteers and kind of took it to a level that was something that would actually be fun for kids.
Cameron: So, one of the things I aspire to in life is to live without regrets. I don’t have too many of them, but I spoke with you before and I regret not asking you if you would sing us one of the songs. Is that something you do? Just put on the spot, a little snippet, your favorite hook?
John Lanza: You know what? I’m not going … Well, this is funny because I fancied myself a decent singer and I do kind of play guitar around the house. My kids would obviously tell you otherwise that they would give you the truth. But I sang the original songs to kind of have the rough track. Randall who was our composer put them together. He said, “I think we should double those tracks. It’s kind of tricky use for someone who’s not always in tune,” and he was trying to say that in the most politically appropriate manner.
Cameron: All right, we’ll accept that answer. I figured if I’ve got you live with audio, got to ask the question.
John Lanza: I’ll sing the refrain. You want me to sing the refrain?
Cameron: Go for it. Let’s do it.
John Lanza: Because I do that sometimes in front of kids. It’s like we’ll share and save and spend smart too and there are you now, there it is. There it is.
Cameron: I like it. It’s good jingle. What are some effective ways to talk to kids about money? You kind of talked about the concepts you like to convey but how do you go about actually making it really practical and concrete?
John Lanza: Yeah, I think it’s best to just start quickly with how we set up an allowance because that’s how you move it from abstract to real. So we just use the basic rule. For a five-year old, you give them dollars per week and then we break it into three jars, the share, the save and the spend smart. So what we do is we put $1 into share, that’s the charitable giving and the idea behind that is we think it’s good idea, like most people think it’s good idea for kids to learn that giving back is good. So it’s kind of that’s like a nudge or an opting them in. They have to do that. $1 for save. So we’re teaching them to pay themselves first and then the $3 they could put anywhere. So that’s their kind of discretionary money. They have complete control over that money.
John Lanza: What you want to do, I think the first thing once you’ve got that allowance setup is be on the lookout for a goal for which they want to save. So they have the spend money, they can bring that into the store and get little things. But at some point, very soon in the process they’re going to say, “I want this,” and it’s got to be more than they have and then they can learn about delayed gratification and you want to keep that timeline pretty short, somewhere kind of say three to eight weeks for the first goal. So it’d be something say in the 20 to $30 range and they will learn then to save that money over a period of that time. They learn about delayed gratification and they learn the power … What’s really nice about it, they learn to like a huge life skill, which is setting goals and in the context of money, it’s something that they’re going to want to do almost. It’s very easy to find something that kids are going to want to save for.
Cameron: So I was actually down sort of near your neck of the woods over the weekend. I was in Newport Beach area, Irvine area in Orange County and you’re down in Los Angeles, is that correct?
John Lanza: That’s right.
Cameron: So I was hanging out with some friends and I was talking about one of my favorite studies of all time, which is often called the Oreo Study. I know it’s also called the marshmallow study. For those who haven’t seen it, I highly recommend you go to YouTube and look up the University of Oregon Oreo study or you go quickly find a bunch of variations. The notion is basically you put a kid down and you say, “Here’s an Oreo on the table in front of you. Here’s an empty room and we’ll come back in 15 minutes and if you don’t eat the Oreo, we’ll give you a second Oreo. So you’ll get two Oreos just for waiting 15 minutes. But if you want to eat the one Oreo, you can do that too. You just don’t get that second Oreo.” The video footage is just some of the funniest stuff I’ve ever seen. I showed this to friends many years ago, the kids who are inserting the whole Oreo into their mouth and then taking it out, licking at it or just staring at it.
Cameron: We were chatting about this and my friends said, they’ve got two sons and one of them, he’s like, “Oh yeah, one of them, he doesn’t eat the Oreo. The other one, he definitely eats the Oreo. Before you’ve even given him instructions, he’s already eaten the Oreo.” So is this method of way of helping kids to not … Well, I should say the punchline, of course, there’s another study, is when they followed it up a couple of decades later, the kids who had this delayed gratification ability di not eat the Oreo, to wait 15 minutes, just did far better on a whole bunch of different measurements of quality of life, life success. So does this tie into the Oreo study? Is your method related to that?
John Lanza: Yeah, very much so because that Oreo study is all about delayed gratification. I think the big, and you’re right, they did follow up, they’ve looked at different parameters of those kids later in life so I think they looked at SAT scores, BMI, a whole bunch of different kind of success metrics [inaudible 00:12:12] to get a sense. I think Walter Mischel is the guy who originally devised that study and what was interesting is he kind of became obsessed with finding out whether this was innate or not, and like most things, it’s going to be a combination of nature and nurture. But he did discover, and this is I think what most parents can take home, is that you can teach them delayed gratification. So it’s not all lost. If your kid is the one who just immediately plunks the Oreo in his mouth, no questions asked, it doesn’t mean that it’s all downhill from there, this is something, and that’s actually one of the things that I think is very powerful in this idea of saving for goals is that immediately you can teach them these things.
John Lanza: Anybody who has kids knows that they all have different personalities and different money personalities. Both my kids, one is more of a saver, one is more of a spender. My wife and I, I’m more of the spender and she is more of the saver. So I understand where people are … I understand this compunction to think that spending is going to fill some kind of void. I think it’s one of my number one goals for my kids and I think for kids that we talk to with the money mammals and the art of allowance is really we want them to understand that never at anytime will the purchase, the feeling that comes from a purchase be anything, that good feeling be anything more than fleeting. It goes away, purchases of things certainly go away very quickly.
Cameron: So you referenced the art of allowance and I know you’ve written, I think at least a couple books. Can you give us an overview of what they’re about and why you wrote them and who you wrote them for?
John Lanza: Sure. Well I wrote the first, I wrote three kids books and they tie into that jingle that I sung so poorly earlier. So we’ll share and save and spend smart. So my first book was about saving. So it was Joe the Monkey Saves for a Goal and that came out of just watching my kids save and I thought it would be really fun to write a book for other kids about that. The sharing book, this is one of the things that happens with the share jar is it’s very easily forgotten. Spending is top of mind, obviously. Saving is pretty close to the top of mind if you’ve got a goal in that you’re thinking about. But the sharing can be forgotten. So I addressed that in the book. Joe the monkey himself kind of, he just kind of feels rudderless until he develops his own charity, and that’s not to say that every kid needs to develop their own charity.
John Lanza: But the point being that as a parent or as a kid, you just have to be mindful of it and sometimes as a parent you just have to direct your kids’ mindfulness to that share jar to say, “Oh, look, it looks like you saved $20.” There’s a drive going on at school. The UNICEF box for Halloween, whatever it might be, you can direct them there. So those are the two. Then the last book was about spending smart and in it Joe the monkey is watching his friends all buy junk. Literally the junk is called stuff and that the idea there is that this collecting of stuff is what I kind of mentioned before. You think it’s going to make you feel better and then all the sudden you just have all this stuff and in this story everybody realizes that the stuff is junk and that’s the whole happy ending. Sometimes it takes us a little while and I’m guilty of this, of realizing that there is a lot of stuff that is junk. Most of it is.
John Lanza: So anyway, I’ve done those three kids books to make it fun for kids to learn about those three concepts. Then I realized one of the things with the money mammals was that kids were getting excited but parents really needed a plan to kind of get … Going back to this idea of moving it from abstraction to reality. So the art of allowance is just to kind of short guide for parents and it’s really a guide because every kid is different, every family’s different, every parent is different. So there are basic things that I provide. It’s basically a framework. We talked about those three core money smart skills, the needs versus wants, saving for goals, making money smart choices, and then having various different tactical ways that you can grow with your kid, grow their allowance throughout their lives.
Cameron: I know I wanted to call you an expert in human behavior and you won’t let me do that, which I appreciate but you’ve interviewed a lot. I know you’ve read a lot and you’ve interviewed a lot of the top experts in the world on human behavior and money, which was an endlessly … To me, I love behavioral economics. I loved, I can’t say that I loved economics, but now that I feel like the discipline is starting to recognize some of the, yes, humans are always rational, but rational to a human is not the same thing as to a spreadsheet and I think the disciplines are starting to account for that. There’s just so many wacky, quirky things that we do. I think of all the studies that … We’ve known this for really for a millennia, right?
Cameron: If you’re trying to sell something, if you can get someone to pick it up and hold it or try it on, now, we think of it as ours and so we put a much higher value on it and all those kind of quirky facts about how we really aren’t logical. At least my high school economics teacher was wrong when he explained the way that we behave with money. So I’d love to hear some of the more dangerous or surprising or intriguing myths about money and human behavior that you find yourself kind of going back to that you’d like to share with our audience today.
John Lanza: It’s funny. I was just reading a Daniel Kahneman’s Thinking, Fast and Slow. Yes, great book. I could see that you’ve read it too and it’s because when you say the rational, you think of the econs versus the humans. It is neat. Once you read something like Freakonomics and then you read this, you’re like, “Oh, economics is actually kind of really … It can really be fun, especially behavioral economics.” I would say, one of the most interesting things that we’ve tried as a family is really this focus on experiences. There’s a great book called Happy Money by Elizabeth Dunn and Michael Norton and they actually, they break the book up, it’s really ingeniously done. So they break the book up into five sections that are basically money hacks you can use to identify the issues that you are naturally going to have as a human towards money and figure out how to make yourself basically happier with money.
John Lanza: So it’s kind of addressing this can money buy you happiness. In a sense it can if you’ve used your behaviors properly. So one of the things they talk about is buying experiences. We actually tested this out with our kids few years ago and we went to, we took a trip to London and Paris and we’re fortunate enough to be able to do that. We told them, we said, “Okay, this is …” This was over the holidays. “This is your present. You’re not getting any other presents.” Now, of course they held out hope that we would cave on this but we didn’t and it turned out to just be a wonderful trip. Now, that is not to say that they didn’t miss the presents. They would have preferred the trip plus the presence. But that experience I think was really helpful and I encourage parents to try those kinds of things. Just focus on, I know a lot of parents that do this, just focus on experiences versus things because experiences are things that you are going to.
John Lanza: In fact, one of the things they talked about in Happy Money is that when you take a vacation, often the excitement of the vacation beforehand can be better than the vacation and certainly the remembering of the vacation can be as good, if not better than the vacation. So there’s just so much more that comes out of it versus buying a new car or buying new a toy, you get a spike and usually it’s just the spike, that’s all you’re getting out of it and then kind of everything goes downhill after that. So that’s just one of the little hacks that they talk about.
Cameron: All right. I got to share one of mine. There’s so many weird things about humans. I remember in Dan Ariely’s book, Predictably Irrational, I’m sure you read this or you’ve seen it, but he talked about how what your economics teacher taught you was that they’re all all just kind of these units that we use to buy things. So if I offer kind of cheap chocolate, like Hershey’s Kisses and high end, whatever, Ghirardelli Chocolate and I’ve got a bowl of the cheap chocolate for one penny each and high end chocolate for 16 pennies each, 16 cents each, and you just run people through the cash register to see how many people buy from each bowl. So then if you just change it so that now the Hershey’s Kisses are free and the high end stuff is 15 cents. So the delta between the two, it’s fifteen cents of difference.
Cameron: An economist used to say that we should behave the same and of course people go absolutely insane over the free thing. There’s so many quirky facts, which, yeah, I agree. I’m always trying to figure out how to use them to my benefit. Let’s talk about credit union. I know you’ve got a bunch of partnerships with different credit unions around the country. Tell us a little bit about both what you’re helping them to accomplish and also I know you really are passionate about the cooperative mission and the community focus. Where do you think in general credit unions are falling short when it comes to financial education?
John Lanza: I think credit unions do a wonderful job of working with our communities. What I think a lot of credit unions do is they tend to focus on the schools as the place for financial literacy is going to happen. This is not to say that financial literacy shouldn’t be in the schools, but it really starts at home. I think this is one of those places where there’s a huge opportunity to connect with families, to provide them with really what your mission is, which is this idea that you want to provide financial literacy to the community that you serve. Being the institution that brings something to the parents that can help their kids learn from a young age and just as importantly makes them aware of the fact that starting early is really important because people don’t … I think they will kind of naturally think that that makes sense because the more we learn about kind of human behavior, we realize that so much of it starts early because of brain development starts, happens so rapidly in the young child.
John Lanza: But they don’t realize how important it is to start this process because this leads into the other issue which is that the focus is tends to be in high school and that’s good. There should be lessons taught there, but if that’s the entry point for learning financial behavior, then you’ve missed this huge opportunity for these kids to learn the basics. So especially when you’re talking about high school students, like you were saying, you don’t want to lump the complex on top of no foundation. That’s the thing. It would be like building a house without having a concrete poured. So you’re playing catch up. So this is the real opportunity I think that credit unions have is to one, connect with families and two, start early.
Cameron: Tell us a little bit about, I mean, I think you’ve got several dozen clients from what I saw, what do you do with credit union partners? What are they working with you for?
John Lanza: So what they do is they provide, it’s kind of like a marketing and education program for their communities. So they will, when kids come in, they become a money mammal and they will be incentivized to save with little rewards cards. They get little rewards when they come in for saving. They get a quarterly newsletter. All the kind of fun stuff that you’d have in a program. But what’s really now happening now that we’re kind of incorporating the art of allowance into it is we’re providing a more holistic program for the family. So kind of like what I said before, the money mammals get kids excited, but really the parents have to get involved for this to happen.
John Lanza: This is also because depending on where you are, the school systems, it’s so scattershot what’s actually being taught. In most places, very little is being taught and what’s being taught is more of kind of economics or kind of the … Or some life skills, but it’s not the basics. It’s not this idea of distinguishing between needs and wants, saving for goals and making smart money choices. We distill it down to be pretty simple. So, that’s what they’re doing. They also use it to go into schools. So we do have material for the schools. I think it is important to be in the schools but you need both. You need the schools and you need the families and that’s what our partners have discovered is that, and are discovering because like I said the idea of really connecting with families is pretty new and the book just came out.
John Lanza: So we’re really working with it, we’re better, we’re figuring it out now better than we did say six months ago and our program would be better in six months than it is right now. So we’re working through that program, but our partners are discovering that that really has huge potential because not only can you bring in these new members, but you can educate.
Cameron: Yeah, I love that. I mean, I’m always, from a strategy standpoint, one of the key questions that I’ve seen in so many case studies and just small group sessions with other business owners is getting clarity on who your customer is. I think most financial education is focused on, I’m using customer in the broadest sense of course, I know credit unions are membership based, but most financial education plays by a credit union or a community bank is focused on the teenager as the customer and hoping that you kind of build some loyalty, some connection. They’ll stay with you as they graduate from high school, maybe going to college, going into a career. But what I like about this approach is it’s such a deep and powerful bond obviously that parents have with their children.
Cameron: I think it’s a point where they’re really, really open to that cooperative community driven message, which is, frankly, it’s kind of a sophisticated message for a high schooler to glom onto and so now it’s like now in this financial education strategy, the customer is really the parents. It’s not obviously the eight-year old.
John Lanza: Right.
Cameron: I think it has a real potential to be a powerful differentiator for a credit union from a strategic standpoint because it is also, I think, a sort of a longer term, more holistic play than running a bunch of banner ads or billboards.
John Lanza: Well, yeah, no, you’re right. The other thing is just on a kind of mercenary level, most credit unions are competing on the commodity level. It’s like we have the best loan rate, we have this, and everybody wants to be competing in that kind of mind, in the emotional level, right? This is an opportunity to do that on a level. One of the things that we … There’s a lot of depth to the material that we have and for us the challenge is communicating that to the credit unions and then making sure that gets communicated across the board to the members. That’s not an easy thing to do, but that’s actually kind of a fun challenge. How do I get the passion that I feel for this to them and how do they get the passion that they feel for it onto the members, right? Ultimately, how do we move the financial literacy needle forward?
Cameron: Yeah, yeah. Because if you’re not opening up that conversation with the parents about, well, what’s a cooperative financial institution and why does it matter and why is that different? Awesome. Well, John. I’ve really enjoyed chatting with you. Is there anything else? Let’s do a final take. Anything else you want to leave our audience with that you didn’t get to or something you want to reiterate?
John Lanza: I think we covered this pretty well. I think the number one message here for parents and really for credit unions is keep the message simple, focusing on those core money smart skills, keep it simple, keep it simple, keep it simple, and that will, that is the kind of thing that’s going to move the financial literacy needle forward for everybody and for credit unions that is going to kind of move your mission forward and for parents that’s going to help you raise money smart kids.
Cameron: Love it. All right, John. Thanks so much for joining us today.
John Lanza: Cool. Thanks, Cameron. I appreciate being on.
Cameron: All right, folks. Another great episode. I really enjoyed having John on. He’s got a very interesting perspective on something that is different than most of the financial education I’ve heard. A few of my key takeaways. I love this concept of how you need to really make it simple and concrete and experiential from a young age. This idea of saying, even if it’s not a ton of money, you got these three jars and starting to teach kids about charity from a young age and starting to teach kids about goals and savings from a young age. One of the phrases I’ve heard John use is telling your kids that saving is paying yourself first because we’ve got marketers out there who are going after folks’ kids, they’re going after them from age two on, and so high school is a little bit too long to wait a lot of ways.
Cameron: I thought that just a few of his insights, he recommended some great books, Happy Money as well as Thinking Fast and Slow, and just that reminder that as human beings we really thrive and really derive the greatest happiness from experiences, not things, and wondering what the implications of that are for credit unions because for the most part we tend to finance things and loan products are built around, financing products are built around things, not experiences as much.
Cameron: Then lastly, I was just really intrigued by the concept of can this really be a strategic rethink of how credit unions do financial education, and rather than focusing on high schoolers and in the schools, can you really focus on using the schools as a channel to reach the parents and the kids at a much younger age when they’re at home and really open up that relationship and emotional connection with the parents at an age and point in life where obviously their kids are so important to them, and they’re really open to and I think intrigued by the idea of an institution that really is cooperative and really exists for the greater good of the community, not just to make a profit. All right, thank you as always for joining us. I wish you the best in making your credit union remarkable.