It is often asked, “What is it worth?” to which, comes the reply, “Whatever someone is willing to pay for it.” meaning the value of something is a personal opinion and for that reason it is never really wrong. Hence the oft quoted saying: ‘value is in the eye of the beholder.’
Sometimes perceived value and monetary value concepts may be used interchangeably; but here we are trying to teach the children how the value of something may vary based on how desperately the purchaser wants that item or service.
I found it difficult to explain the complexities of perceived value vs. monetary value to the Tykes so I came up with a series of examples for them. There are so many instances that show how the value of an item is not always fixed or permanent so I tried to classify some for the children.
Value varies based on need:
Sometimes, we value things more, and are willing to pay more, when we need them the most. For example, it’s a beautiful day and everyone piles into the van with their water bottles and snack. We head towards our favorite conservation area outside of the city. We are almost there but, ding, ding, we are out of gas and the car stops. There is no gas station for miles and with three kids in tow there is no choice but to make a call for rescue. I call the closest gas station near the park entrance to ask for help. They offer to bring a jerry-can of gasoline to us but it will cost more than usual plus $50 for his time! Of course we agree, we have to have the gas, therefore we are willing to pay more.
To me, the price and value of a clean swimming diaper is pretty low when you are sitting at home in the winter with a full pack, $1.20 each if I recall. But when you find yourself at the local splash pad on a holiday long weekend, stores closed, and you forgot to pack any spares, you might value one more be willing to buy one from another parent for significantly more money if it means you don’t have to sit next to Stinky Pants anymore. (The Tykes always love potty humour in our examples.)
Value varies based on personal taste:
As much as people’s opinions and tastes vary, so do the values of many items. Something that is valuable to one person can be completely worthless to another. Most likely, a figurine left to you by your grandmother with a heart touching tale remembering how she bought it on her honeymoon, makes it worth more to you than any other person. If you decide to sell that figurine you will have to accept the fact that although it might be precious to you because of the memories it holds, someone else will only see their perceived value, which could still be high if it is a rare figurine that they desire for their collection and is hard to find.
I asked the children to consider what happens at an auction. Auctions do well when more than one person wants an item. Each person bidding on the item has a different reason for wanting the item. In the end the value is determined by the highest bidder, or the person who values it the most.
Value varies based on time:
We use examples of seasonally adjusted prices on fruit and vegetables as a good exercise, especially when the children are involved in grocery budgeting and shopping. While shopping , we explain how some fruits, like strawberries, cost less in the early summer when they can be grown locally, but apples and oranges are expensive. Then in the fall, we point out that the price of apples has dropped below their summer prices. Come winter, when strawberries are rare and expensive, oranges are now an economical choice for the budget. This exercise can be done using food ads in local flyers when the children help make shopping lists, they can start a year long scrap book, marking the dates and seasons and pasting the pictures with their prices.
When the kids get involved in selling their excess toys or lightly-used clothing the examples can get more complex. Recently I explained my backup strategy on trying to sell a pair of hardly worn snow boots. I explained that I usually try to sell them just before, or during, the first snowfall, when everyone shops for winter gear. If the boots didn’t sell at that point though, the value might actually go up over time after many kids have worn their snow boots for the long winter and now have leaks and holes in them. Then, when a surprise spring snowfall hits, local stores are now selling swimsuits and sandals, but we still have a pair of snow boots for sale! (This is a strategy I learned by being caught on the need side of this transaction, outgrown boots and none being sold in stores, I suddenly would have paid much more for a pair of winter boots.)
Value based on geography
I explained to the kids that in addition to seasonal prices on food, food prices fluctuate based on where the food was grown and where we live. If the food was grown locally in the fields or in a greenhouse we tend to pay less for it than those people who live further away and do not have access to locally grown produce. Then I explained that the reverse holds true. We have to pay more for food items, like mangos, that come from far away than those who live close to where the mango was grown.
Value varies based on trends or wants
Perhaps everyone is aware of the current ‘trend’ of fidget spinners. A couple of months ago, the Tykes were each given one as a gift from their aunt, just before our small town had even heard of the craze. Advertised as, “a tool that helps your brain sustain focus,” it had a hypnotic whir and concentric pull as it spun uselessly in your hand.
The children enjoyed it and showed their friends at school their new acquisition. Within days the children were coming home with stories of fidget spinners that had metallic finishes, rainbow coloured fidget spinners, fidget spinners with lights… the variables were endless and the children wanted another one. But how much did they cost we asked. They reported that their friends said $20. We asked if they wanted to spend their $20 on another fidget spinner. They all quickly fell silent in thought. They did not value a slightly different fidget spinner at the cost of $20. A few weeks later, fidget spinners were being advertised for $10. Again the collective voice rose, announcing that these toys were now on sale! As more and more ads offered $10 fidget spinners, the children realized the price was not a sale but was falling. Within two more weeks, fidget spinners were available for $4. By now the children no longer asked for them even though they could easily buy one with their pocket money. They still enjoyed their toys and liked taking them to school but the desire to purchase a second one was almost gone.
Whew! They learned a complex lesson in that example that we can, and will, bring up again when we continue to talk to them about: values based on trends or wants; spending their own versus someone else’s money; saving their money for special things, how sometimes things get less expensive over time; supply vs. demand; planning their purchases before shopping; saying no to impulse shopping; and more!