Growing up my parents never really had any talks with me about money or budgeting. They were so busy working hard to pay the bills that they had that they did not have the time to have important discussions such as this with me. The one thing that they did discuss with me over and over was the importance of going to college to get my degree because they felt that if I did that then I wouldn't have to work as hard as they did to pay my own bills as an adult. And so I did. (Ironically, I am not using that degree at all, but I feel that I am doing a much more important job here at home than I could be doing out in the world, right now anyway.)
When I became an adult in my own right I struggled with money and how to use it and how not to use it. This problem only intensified as Bob and I were just starting out as parents and newlyweds. Over the years I have learned, often the hard way, how to blow our money, and then, how to budget it properly. We are now in a spot where we have a handle on our budget and know how to use our money wisely, but getting to this spot took a long a time.
It wasn't until recently that I realized that I do not often have conversations with my own children about money. I don't want my kids to ever become trapped by money. I want them to have enough money to support themselves, and if any of them should ever becoming rich (according to society's standards) I want to teach them to give away their extra money to worthy causes.
As a society we glorify money. We worship money. We make money our god. The only things that money will do, when not used wisely, is to make us slaves. I have been there and I don't want my children to ever be there. I also want my children to know and understand that a big house doesn't mean greater happiness. That living in a coveted neighborhood will not help your heart be content. That driving the latest cars or wearing the latest fashions will not offer peace. Those are the things that companies want you to believe will bring you everlasting happiness because it will line their pockets with money and make you a slave to yours as you try and pay the bills for all of those purchases.
I have a 15 year old son who will most likely be leaving home sooner rather than later. I should have started this conversation and idea with him years ago, but as my first child Andy is my guinea pig. I live and learn from the parenting mistakes I make with him so that the others can benefit. I sat down with my boys and with Sarah and asked them what they thought their cost of living was each year. I wanted them to jot down what they thought their Dad and I spent on them over the course of a year excluding food and lodging. I had them tally up things like clothes, soccer equipment, toys/games, extracurricular activities, entertainment, etc...They all came up with totals (which were much lower than reality which was an eye opener for them). I then talked to the three of them about what their Dad and I actually spent on them. I explained to them that I was no longer going to spend that amount of money on them each year. I told them that their Dad and I would pay for 1 activity a piece (soccer for the boys and gymnastics for the girls), but everything else they were on their own for. If they want new soccer cleats or to go to a movie or to buy fancy hair gel - it was on them. Horseback riding lessons - on them. I also told them that when they are first starting out in life they are going to have to make choices about where they spend their money. They are going to have to budget their money because they won't have a Dad who works incredibly hard to earn a living that will just hand them money to do what they would like. They will have to figure out a way in which to spend their money wisely.
So, the three kids and I determined an amount that they thought was fair and that I thought was adequate as well (and it is saving Bob and I money because I am giving them less than we have been spending on them) and they are now on their own for all of their expenses outside of their one designated activity. If they need deodorant, toothpaste, shampoo - it's on them to buy it. If they need a new pair of jeans - it's on them. Want to go to a movie? On them. Want to go to Chipotle in El Paso on Saturday when they pick up their dad from the airport? On them. I will provide all of their meals and snacks here at the house (unless they want a specialty snack such as chips of which they can only purchase 1 junk snack and a healthy snack has to be eaten first before a portion of the junk snack is consumed), but going out to eat is on them. (Of course there will be exceptions where Bob and I will pay for dinner like Christmas Eve or something like that, but our days of eating out often are over because of our voluntary experiment to eat on a food stamp budget - or as close to it as we can. You can read about that here.)
I am confident that they will learn how to budget their money and become masters over it and not the other way around by doing it this way. My boys have always been pretty good with their money, so I am not worried about them blowing it. If they do though, it's on them. Sarah, too, will learn much earlier than the boys the power that can money can have if not used properly. I will be helping her a bit more in terms of how she uses her money. I will be more hands on with the choices that she makes pointing things out to her and walking her through the choices she will be making regarding her finances. As she gets a bit older I will allow her more freedom with her money, so that by the time she is ready to go out on her own she will have the ability to use her money wisely.
Elizabeth, who blows through money like it is water, has different system set up. I am giving her less money than the other children because her needs are less. I am also having her put her money into 3 mason jars: an emergency stash, a rainy day stash, and a spend my money right now stash. 25% of her money will go into her emergency stash every pay day, 50 % will go into the rainy day stash (which is for things like shoes, clothes, etc...), and 25% will go into the spend my money right now stash (which is going to be for things like movies, her junk snack, Chipotle, etc...).
Every parent wants their children to have an easier time than they did in life. I think we all want our children to not have to go through the same struggles that we did. I think that helping my children learn to be masters of their own money at an earlier age than adulthood will certainly be a step in the right direction.
I love how you are getting them involved in learning about money. I, too, left home with little or no knowledge about finances. We learned the hard way, and then we finally found Dave Ramsey's Total Money Makeover and that was the only reason I was able to leave my bread-winner career to stay home.
ReplyDeleteIsn't it interesting how kids' personalities come out even through money? Alina has been interested in money from a very young age (as evidenced by the fact that she decided to start a business when she was 6). In our old neighborhood, she would go door-to-door selling crafts and "creations".
But she, too, tends to spend money very impulsively. We are working a lot on teaching her how to save, planning what to spend the money on, etc. She has a big heart for animals in need, so she ends up giving about 50% of her earnings to charities (she has adopted a humpback whale and a bottlenose dolphin so far). Ian is very different in that he naturally wants to save most of his money in his "car fund". He did save up money to start his apple business (he bought 3 trees) and it took him probably 6 months to save enough for the car play-carpet he wanted to buy (which was $20). We don't give the kids any allowance, but we do always have specific tasks they can do if they want to earn money at any time (including killing flies or ants in the house (!) and pulling weeds). Both kids know now that the best time ti pull weeds is after it rains, as they can earn a "lot" with less effort.
If your kids ever want to earn some extra money, I have plenty of outside property maintenance tasks that I will pay to have done. Things like picking up trash on the property, pulling weeds, mowing the yard, etc. My 14-year-old nephew has taken me up on that a few times and helped with some homesteading tasks.
Sarah - I will definitely offer it to them. Also, Dave Ramsey seems to be HUGE down here. I have heard his name mentioned many, many times. It is kind of interesting how different parts of the country are more apt to follow certain people. I am sure that people up North have heard of him and read his books, but not like down here. It seems like every where I turn someone is mentioning his name and how they swear by his philosophies. I just might have to check out one of his books.
ReplyDeleteIt is also very interesting how kids' personalities come out even with money. Elizabeth is very impulsive by nature and it carries into how she spends her money as well. Andy is very cautious by nature and he still has money that my mom and dad gifted him for his 13th birthday - 2 years ago!