Recently I had a conversation with our 14 year old daughter
about money. It’s not the first one we’ve had but this time was different. Why?
Because I ended up getting upset with her. So what happened? Here goes:
She has been saving her allowance. And sometimes she gets
money from different relatives. So that day, I just casually asked how much money
she has saved. She said, “None.” I said, “Are you kidding? What happened?” Then
she started to explain. In frustration, I just cut her off and didn’t even
listen to all she had to say.
That’s probably not the best approach – to ask your child a
legitimate question, only to cut her off while she’s answering. But here’s my
issue: we have been talking about money – the do’s and don’ts - like budgeting,
saving, spending. And what did she do? She spent it all!
She just completed her freshman year in high school. Soon
she’ll be off to college. And after that, comes the real world. Unless we give her
the right lessons at this juncture, she might learn the hard way the importance
of managing money carefully. She told me a few months ago that she wants a bank
account with her own debit card. I promised her that, if she demonstrates that
she can handle the responsibility of managing the money she gets now, then we
can do that. The recent spending spree that she went on tells me that she’s not
quite ready yet. So back to the drawing board we go.
Now, I know as adults, sometimes we spend more money than we
should – more than we want to. I understand life situations arise. But she’s 14
and a fulltime student. She has no life real obligations that would cause her
to spend anything on a monthly basis. Any money she gets is purely for her
pleasure – a little shopping, a little eating or whatever she wants to do.
I eventually listened to her tell me she did some shopping
and got some things she’d been wanting to get for some time. I told her I have
no problem with her getting things she had wanted. But we had a deal and she
didn’t keep her end of the bargain.
You see, I have had my own financial issues and I am
determined to teach my 3 kids about money management from a theoretical
standpoint. Then I want to give them the opportunity to put these concepts into
practice as they grow. My wife and I have 2 young sons – a 2 ½ year old and a 7
month old. So for now, the lessons are all directed to our teen daughter.
When I was growing up, my parents did speak with my siblings
and me about money but more in a general sense. As I became an adult, I began
to realize that I needed a bit more. I started working and earning my own money
while in high school and that continued through college. I spent what I earned
on things I wanted; my needs were taken care of by my parents.
When I graduated from my university studies and became a
professional, I started earning much more money than before. At the same time,
I became an independent, working adult, responsible for paying his own bills.
That’s a whole new ballgame altogether.
It’s one thing to earn spending money when your parents are
responsible for your care; it’s a different thing when you are responsible for
every penny that comes into or goes out of your household. I learned, in a
hurry, that a nice paycheck can come and go in a flash. I didn’t go about
spending money unnecessarily; I just didn’t live by a budget. I figured that,
as long as I could pay my rent, car note, credit card bills, college loans,
grocery bills and other monthly obligations, I was fine.
I didn’t think about doing a bank reconciliation to ensure
that I know what checks are outstanding at a given time. I didn’t think about
saving. There was little thought about planning for tomorrow because I was so
busy trying to live for each day.
Before I knew it, a few years went by and, for the most
part, I was like a runner on a treadmill – doing a lot of activity but not
really going anywhere. If I wanted to buy something and didn’t have the money
readily available, I’d put it on a credit card and voila – I had it! No thought
about whether or not I could afford it. That was just my approach.
There came a point where I realized that instead of managing
money and putting it to work for me, it was managing me. Without employing a
proactive approach to handling finances, I seemed to always find myself with
too much month left after the money I earned that month was gone. Without going
too much into the details of that chapter of my life, I’ll just say that I
learned some tough lessons about the importance of handling finances. I set out
to change my situation so that I could begin seeing different results.
Establishing a budget was one of the first things I did.
It’s good to put on paper what you earn and what you’re obligated to spend and
what you can exercise discretion in spending. Learning to save and invest is
also an important part of this process. It’s something I have learned and am
still learning. But more importantly, I have been putting what I have learned
into practice and I’m finding more and more, that the principles of managing
finances do work.
My kids mean the world to me. As they grow and develop I
want them to learn the importance of handling finances. I teach our daughter
that, when she gets money, she is to set some aside for savings; then she is to
give some away – in our case, to church. Then she can buy things that she needs
or even wants. But all of this is to be done with a well-thought out, proactive
approach.
I know that the weekend before our conversation I referred
to above, she went out with her cousins and they did a little shopping – well,
a lot of shopping. She ended up getting things she didn’t plan to get, paying
more than she planned to pay and when all was said and done, she came home with
some nice things, but the money was gone – no savings, nothing given away. And
I’m sure that if I was to look at what she paid for the things she got, I would
see that she overpaid for some items. Or at the very least, she got items that,
though they may have been good buys, were out of her budget.
I believe that we live in a society that encourages us to be
impulsive spenders. We’re bombarded with ads for items that we don’t really
need; we’re encouraged to get credit cards to get items that we want, just to
satisfy some desire that was initiated in crafty ways by advertisers. And of
course there’s the peer-pressure issue that causes our kids to think they need
to have what everyone else has.
So as responsible parents, I believe that we have the
obligation to counteract what our kids might hear from their friends or from
advertisers. The truth is that they can accomplish just about anything they
desire. And they can acquire things that they dream about. But it takes
planning, discipline and self-control to make it happen.
Parenting is no walk in the park. But we’re preparing the
next generation to take over the world as we get older. Money management is a
key lesson for them to learn in order to live accomplished, balanced lives. Let
us encourage them to be wise in how they handle this precious resource so that
they can see their goals and dreams come to fruition.
Do enjoy your day.
The Upbeat Dad
My son is 11 and we've set up a bank account for him with £10 per week which is his pocket money for good behaviour and household chores. He must buy everything except school items from this, so toiletries, clothes, sweets, trips to cinema with his friends etc. This is working really well.
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