Saturday, February 6, 2010

Wanting the Best for Our Kids by Living Within Our Means

When you're a parent, the world of money takes on an entirely new meaning. After many years of pretty much making and spending money on myself and doing so with not much planning, budgeting or awareness, becoming a parent to three children has put that pattern to the test. We want the best for our kids and I've fallen for the false idea that this equals not always spending within our means.

The reality of raising children is that it will cost you money and lots of it. Just the bare essentials of food, clothing, shelter and medical care rack up every month. When the pressure to have, to do, and to live in a certain way is pervasive, as it is in our culture, it's hard to raise children with a responsible or healthy idea toward money.

To give myself credit, I talk a great deal about money and how we spend our money to our kids. They see me clip and use coupons at the market and they know Mama's rule about 'never buying retail.' They're used to waiting until the shirt or pants they liked at the store goes on sale two weeks later, which I always tell them it will and which I'm always right about. They're even getting used to having to spend their own money on the little incidentals that they want, as well as learning to save for the bigger things.  When our oldest wanted to take horse back riding lessons this fall, I told her she had to earn half of her way for them. We made a list of the extras she could do and little by little, including selling her own things at our summer garage sale, she saved up enough to meet that goal. And was darn proud she'd done it.

Do we all have our own money personality? Sometimes I think we do, and it is from being a parent that has made me think this way. With my three, each exhibits a completely different relationship to money. Case in point: the gift card, usually something that is sent for a birthday or Chanukah. Same gift card for each, same amount on it. But each child relates to it differently. The oldest usually spends exactly what is on it, tax included. The twins? One will always pick out something that costs more than the gift card and the other will always extend her the credit to pay for it, as well as have something left over on the card for later purchase. Did I teach them this? Not sure, but it definitely makes for an interesting trip to the store.

But when financial difficulty hits, the first inclination as a parent is to protect, and in my case, to pretend that everything is just fine. Which I did for the month of December and into most of January. And fine in this case meant that I didn't splurge on an early December birthday or on Chanukah, but I also didn't take the hard look at the early signs that things were going astray. 

And in the past few weeks, I've tried really hard to not pass along my growing sense of panic and worry onto them. I've also spent a great deal of time thinking of what kind of financial parent I want to be. As I'm readying myself for the 21 Day Financial Fast, I've begun to talk to them about what the next three weeks will be about. They didn't like the part about no window-shopping, but overall they seem to be all right with the idea. 

I've been looking for some useful tools to help me be a better teacher to them and came across Lisa Reid, author of Raising Kids with Just a Little Cash. Reid's take is living in a frugal manner is the best possible way to raise kids realistically prepared to enter the world when they leave our nest. Here's a great example she writes:

"What do our kids learn when we wear $30 shoes and we pay for them to wear $135 shoes? We love our children and want them to be happy, but we send mixed messages when we protect them from real world decisions about money that we, as parents, must make all the time in our lives." 

Reid goes on to suggest that as parents, we need to include our children in budgetary decisions:

"Kids of all ages seem to respond well when they are included in the family "business". They can understand that thrift has some beneficial consequences for them, too. Make it easy on yourself and ask for their help."

I didn't grow up with any real sense of what things cost, or how to plan a budget or even how to balance my checking account. I had what I needed, we lived well, but not flamboyantly. My mother loved to shop and bought stylish outfits that often got 'hidden' in the closet with instructions to pretend they were old when my dad would notice them for the first time. It was a game they played which they both agreed to. When I left their home and went first to college and then into the "real" world, no one ever sat me down and said, this is how you create a budget. 

I'm learning it late and will now make sure my three kids have the proper financial education they need. And thanks to Lisa Reid's common sense advice, they'll be included in knowing what our family budget is and what role they play in making our family business a success. 

I know they're learning a great deal now, in the midst of our own financial meltdown. I don't want them equate money with stress, I want them to have an open-eyed and mindful approach to money throughout their entire life. In order for this to happen, I have to step up and let this financial stress, being viewed very closely, not to mention being experienced by three watchful set of young eyes, elevate me to becoming a much  more responsible financial role model, as well as the equally important message that we will get through this as a family. 


Tomorrow: Budget Planning 101. 


Finance said...

That is a great article and it is so timely. I wish more parents taught their kids about money early on. You can't go wrong with that approach. The key is to teach the kids at a very young age, in a manner that children can relate to.
Prakash Dheeriya, PhD
Father, Author & Professor of Finance
Finance for Kidz series
finance4kidz dot com

Lisa Trank-Greene said...

thank you, Prakash, that means a great deal to me. I look forward to checking out your work and learning more. Determined to teach my kids and learn while I'm doing it!