My Version of "Home" Economics

Almost 3 years ago a random lady initiated a conversation with me while I tried to pack the jeep for our move to Salt Lake.  Out of the blue she asked me, "Why are you moving?"

"Oh my husband finally graduated from college." I answered proudly.

"Do you have a degree?"

"Yeah I graduated 2 and a half years ago with a degree in Economics."  I answered even more proudly.

"Well hopefully you can get a job cooking something."

I had no idea what she meant and I stared blankly at her as she walked away. 

Brandon came out of the house and I told him what the lady had said.  He started laughing and explained, "Val, she thought you meant you had a degree in home economics."

I was mortified.  I almost chased the lady down and explained that my degree was in Economics as is business and math and really hard stuff.  Not cooking and sewing like she thought.  (Which are also really hard, but not in the same way.)

On the surface the things I learned in school don't really apply to my life right now.  But that doesn't mean the things I learned are worthless.  In fact there are several economic principles that translate quite well into raising kids - especially multiple kids.  

I want to share some of these Home Economics Principles with you.  Keep in mind this is what works for me.  You can totally do whatever you want with your family.

Incentives Matter
An incentive is defined as something that motivates an individual to preform an action.  With kids incentives can be as simple as the enjoyment they get out of helping or a reward they get for behaving well.

I'm not talking about bribing kids.  In my opinion, a bribe is when you give something way out of proportion to what your are asking your kid to do.  Such as, "If you get dressed you can have this pony."  A bribe can be an incentive, but an incentive is not a bribe.  It is a motivator.  Think of it this way, would you go to work if you didn't get paid?

One of the major secrets to my success as a quasi single mom was to reward my kids with fruit snacks once they were all buckled into their car seats.  The kids knew that if they were good, got in the car quickly, and let me buckle them up, then they would get a small package of fruit snacks.

I am also using incentives in my very casual attempt at potty training the girls.  When I change their diapers they have the option to go sit on the potty.  If they sit on the potty, wipe, flush, and let me put a diaper back on them then they get a few gold fish crackers.  Derrick gets gold fish crackers if he stays out of the bathroom.

Property Rights
Sharing is over-rated. In our family we protect property rights.  Lydia and Charlotte each have their own baby dolls, teddy bears, and other animals.  We all know which ones belong to each child.  If Charlotte tries to play with one of Lydia's toys it's easy to say, "hey Char, that's Lyds' baby.  Go find yours."  And more often than not Charlotte drops the toy and does go find hers.  Sure it's kind of a pain to keep track of who owns what, but overall it prevents a lot of fighting.

Now that Derrick is older we have started giving him his own toys.  He has a little teddy bear, a ball, and a phone that are his toys.  The girls know that he has claim on them.  

Of course there are toys that the kids own jointly.  These "common property" toys are policed with the good old, "who had it first rule."  If that doesn't work we move on to Coase Theorem strategies.

Coase Theorem is one of those really boring sounding things that I actually became fascinated with during college.  I even wrote a paper about how Coase Theorem could be applied to airplane approach procedures at the Salt Lake Airport.  I wont go into the boring details of the theorem, but if you want to know more click here.

Basically Coase Theorem states that if two people have a dispute over something you start by deciding who has the property right.  It really doesn't matter who is given the property right, you just have to assign it to someone.  So if Charlotte and Lydia are fighting over a book I can step in and assign the property right by saying something like, "hey Charlotte had that book first."  Then I apply Coase Theorem by telling Lydia, "Lydia do you want to trade Charlotte something for that book?" Lydia can try to trade with Charlotte for the book, but Charlotte has the right to refuse anything Lydia offers.  If Charlotte likes what Lydia offers then she can take the new toy and Lydia gets the book.

I kid you not, most of the time this actually works.  The girls are getting especially good at trading with Derrick.  They know that if he has a toy they better find him something else to play with before trying to take it away from him.

Of course my kids are still kids so fights do break out.  But for the most part they totally get the idea of property rights, trading, and taking turns.  Though I should let you know that there have been two infamous toys that the girls were not able to share.  The little guitar (that sounded like it swore) and the little doll stroller.  These toys magically disappeared one day and everyone got along a lot better once they were gone.

Operate where Marginal Revenue = Marginal Cost
I was able to major in Economics because I had an awesome high school econ teacher.  I seriously spent the whole first semester with every concept going WAY over my head.  But Mr Miller didn't make me feel dumb.  He just kept explaining things to the class over and over and over again.  Then in the first few weeks of the second semester everything suddenly clicked.  I got it!

One of the things that finally clicked was the concept of Marginal Cost and Marginal Revenue.  Marginal means one more.  So Marginal Revenue (MR) is the revenue you get from selling one more item.  And Marginal Cost (MC) is the cost of making one more item.  Mr Miller drew graph after graph illustrating that companies should operate where their marginal cost and marginal revenue are equal.

Mr Miller told us that we didn't need to worry about why - we just needed to know that it was an important economic principle.  Later, when I took applied Calculus in college (from an even more awesome teacher named Mrs Erickson), I learned why MC needs to equal MR.  I was so excited to finally see the math behind the principle.  I was even more excited that I actually understood it.

Anyway, enough exposing of my inner nerd. What does that have to do with home life?  Well it relates to having balance in my life.  Balance between how much energy (cost) I'm willing to spend for things I need/use/enjoy (benefit).  For example there comes a point when I clean my kitchen where it is clean enough for me to enjoy.  I could continue cleaning, but the question becomes would each additional minute of cleaning yield enough benefits to justify the time ignoring my kids or other projects?

Well thanks for reading my version of home economics.  I hope that wasn't too boring.  For some reason I really enjoyed majoring in economics.  I often said that it was the only degree that interested me enough to do the homework, but was complicated enough that I had to go to class to understand the concepts.  There is no way on earth I could have made it through a "Home Economics" type of degree.