“I really want it! Please, I have got to have this bike. It’s exactly what I’ve always wanted.”
These are the pleadings of a seven year-old girl overwhelmed by what mom and dad intended as a shopping trip, but she mistakenly understood was a buying trip.
My daughter had grown over the winter and her old bike, a hand me down, was obviously too small for her.
We shopped around at numerous locations looking for the best deals. I thought this would be a great teaching moment in economics for our daughter. The point I missed was the ‘other’ graph, never shown in Econ 101, where design for an item always exceeds supply or demand and price is no object, at least to the one desiring the product.
We visited two big-box stores to give them a try. Both had nice models at one-fourth the price of the local option. This was a significant point considering the bike may not be in use for more than two years.
Unfortunately our daughter’s want line was nearing its inelastic point and we were still shopping. We could try to explain the economic implications of purchasing from a big box store when local options are available, including used bikes. She couldn’t care less. She wanted a bike now and she knew, as well as we did, that we could afford such a purchase.
This is point where I wanted to talk to her about Wednesdays. That was the day in my childhood when we usually had pancakes for dinner. My dad was paid on Thursdays, which meant that the shelves in our home were usually empty on Wednesdays. My parents had no reserve funds and credit cards weren’t ubiquitous, let alone used at a grocery store. But we seemed to always have pancakes that only required water when these thin days appeared.
My wife’s childhood was even more deprived. Her single mother raised her and her twin sister in New York City’s Hell’s Kitchen. She has stories of homelessness,raising money by playing music on the street, and living in apartments where heat and water were luxuries.
Because of these childhood experiences we always knew our parent’s financial limit. On the other hand, today our children have no idea of the constraints on our pocketbook; The concept of a budget is not as distinct as when we were children.
So there I was, wanting to buy a bike while hoping to convey an important economic lesson. We bought her the cheaper bike, but took the money from her savings. She knows this and now has some idea of the cost of things.
She probably won’t have any Wednesdays in her life like I did or homelessness like her mother, but I wonder what learning she has lost amidst the financial security.
My hope is we can give her and her brother a better life than we had, while at the same time providing the wealth that having little brings.