What do we really teach our kids about money?

[DCLbrideSept2009]

I didn't grow up with money. I baby-sat every chance I could when I was old enough and used that money for going out, clothes, etc. Got my first real job when I was 16. At one point was going to night school and working 2 jobs. Now I have an almost 16-yo dd who thinks we should buy her a car when she gets her DL cuz ALL of her friends' parents bought THEM cars. I told her I don't care if I was a millionaire, I'm not buying her a car. She can work and earn it the same way I did. Now, if she's LUCKY, DH will get a "new" (used) car and she can have USE OF the 11-yo Accord he's currently driving. I bought every car I ever had. My first car I bought FROM MY PARENTS (took over the remaining payments on a 1979 Monte Carlo - this was in 1986). We're now going through the Dave Ramsey FPU and I'm hoping to get her involved in it also and teach her how to budget and save (as well as the other kids). Unfortunately, that's something I still never really learned.

It is tough sometimes when I see how spoiled most of her friends are. My dd does have 2 pairs of Ugg boots - one pair she got for Christmas last year and one pair she bought with Christmas money. The only real "splurge" we've given her is she does have an iPhone (DH works for AT&T though) and a laptop - which she just got a few months ago and all of her friends have had their own computer for at least a few years.

 

[Crystal824]

As someone who is about to have her first child, I enjoyed reading about how all of you are teaching your children about money. Although, my child isn't even here, it is something I have given alot of thought to.

I grew up relatively poor working and saving for the extras. I never went without the basics. My mom even got me a used car when I was 16, but with the understanding I would work and pay for gas and 1/2 insurance. I was already working at the time. I really think my mom was tired of carting me back and forth to work after school. I wanted a cell phone at 17. My mom signed the contract, but I paid for it. I never did miss a payment. My mom would give me a rather frugal limit for school clothes each fall from the time I could remember. When that was out, it was out. Except for birthday and Christmas gifts, I bought everything else for myself after turning about 14, which is when I got my first partime job. Prior to that, I babysat. Before I could work in some capacity, I just didn't really get alot of extras. I'm not complaining. I certainly had it better than alot of others. This has probably made me better with money.

My DH grew up the exact opposite. His parents aren't rich by any means, (they also aren't good with money; they spend alot more than they have). He got everything he wanted. All the coolest videogames, clothes, etc. He never worked until he finished law school and got his first job as an attorney.

My DH and I are very well-educated and have good jobs. While we can't give this child everything, we can certainly afford to give it more than probably either of our parents could give us.

I struggle with how we are going to handle money and this child, when it is older. I know I will want to give the child everything I was never able to have and wanted. At the same time, I really don't want the child to assume it is entiteld to everything. I want him/her to understand the value of a dollar and hard work. I see some entitlement issues in my husband, but I see it even more in his much younger brother. While my DH and I have discussed this issue, I think we may also end up with a difference of opinion.

 

[Ms.Grumpy]

I see this now with my younger brother. He is 18 and has the world handed to him on a silver platter. I was 12 years old when he was born and I spoiled him from day one. I started working when I was 16 at a grocery store. I would give my checks to my parents and only keep $20 from each check. My parents bought me a new car when I graduated b/c I had won a full scholarship to college.
My brother has terrible grades, is lazy, yet he wears the designer clothes in the family. He has been to England, France, Switzerland, Germany, Sweden, and Amsterdam. He is going to Spain in a couple of months.
My mother spoils him to death and DH and I always wonder how he will become a responsible man when my mom never gives him the chance to become a financially responsible adult.

 

[Took]

Count me as one who does not think most kids need jobs (at least, regular ones). I see far too many underprepared college students who "have a job at a fast food company X," and I see them often going nowhere with their lives, just for a mimimum-wage job that sucks the life out of them. Many never complete college.

I think many of the job-holders end up spending way too much of their money on "things" that they don't need rather than experiencing the world, volunteering, and really learning. I did not have a "regular" job until I was in college and, then, only in summers. I also did not have a lot of "things" that my friends had. If I really needed something, my parents bought it. When I asked for "extras," Mom usually said "You don't need that. Conversely, I could save from a small allowance (or occasional babysitting job) and looked for the item on sale.

I also shopped for food and household items with Mom who showed me how to pinch a penny, and I helped Mom balance the checkbook and pay bills (so I understood budgeting).

My parents not only pushed me to excel in school but to learn about the world around me--about politics, about other countries, about those less fortunate, about history. I used my free time for doing these things. My parents were firm that they did not want me to work while I was in school. I did not grow up with an entitlement mentality; instead, I learned I don't need lots of things. Yes, I have some luxuries, the biggest being money for travel. My folks said travel to learn and experience is one of the few things worth spending money on. That's exactly what we're teaching our daughter.

 

[JamesMom]

I'm already teaching my DS7 a few things about finances. I am a stay at home mom and my hubby makes good money. We could get a house that is twice the value of the one we live in now, but we stay put. We have a few luxuries: cell phone (I have a 2 yr old model, while hubby talks on my 5 yr old one), HD cable for our 'big screen' 26" TV, moderately up to date computers and we just got a Wii for Christmas. I don't "do" handbags (if it can't fit in my pocket or wallet - I don't need it. If I need more room, that's what my backpack is for - free from SeaWorld trip . I shop for my clothes exclusively on Kohls with a 30% off coupon. But I don't clip coupons for groceries - just shop at Walmart. Both of our paid for used cars cost less than the one my neighbor is thinking of buying.

My son saw a DS game in the scholastic book flyer he wanted. He balked at the $20 price tag knowing he go to GameStop and buy it for $10.
Also, he wanted a fishtank for his birthday. He had to keep his room clean for a month without me saying a word (I hinted occassionally) AND save his $5 weekly allowance towards the cost. He was rewarded with a $80 tank set up from his Nana and Grandpa because he waited. He still has to keep his room clean though...
I make a point when we are out shopping to compare prices and look for items on sale like when we go to Kolhs - see these jearns are normally $30, but they are on sale for $15 and I have a coupon for 30% of so they are now $10 - we can buy them.

Hopefully little lessons like that will stick. I already know that when my sons are too cool for Kohls I'll tell them to 'get a job'

 

[deerhart]

In the realm of tings, I was a spoiled child by parents, but with a twist.

I rarely asked for things, mostly because I had grown up knowing we had a budget and most things didn't fit. I didn't wear designer clothes etc, but I did attend sports camps and played sports religiously for years. When your parents are spending $1000-$1500 each summer on sports camp and another $300-$500 over the course of the rest of the year on equipment, league fees etc... well its all about choices!

For me, turning 16 = parents provided a car. More or less because my mom demanded it (she was tired of driving me back and forth to practices, pick up from the bus etc). Also, my dad tended to give me my choice whenever they had decided to buy me something (hence why I ended up with a waterbed instead of a new mattress set )

Now I have kids, and they have heard enough no, its not worth the money, or its not in our budget and it translate to the kids as we can't afford ANYTHING

So now its the retraining from we are poor (which we aren't) to the value of objects and the need of objects versus wants. It doesn't help when Daddy has a decent size toy budget either

 

[littlbugmom]

This is a subject I discuss with my sister all the time. Her dd is almost 16yrs. She's a sweet girl who has been taught that the things she wants should be handed to her. It's sad, imo.


She does not work, not even to babysit. My sister earns a modest salary yet doesn't have a problem buying my niece the newest cell phone out there. Unlimited texting, of course. Niece only shops at high end stores for her clothes, bags and shoes....designer. She has a weekly mani for her unbelievably long fake nails. Her hair is also done every other week. My sister pays for all of this and ALSO gives niece a weekly allowance. She gets $30 every Monday to use during the week and an additional $20 every Friday to be used for things like movies and mall trips with her friends.

She doesn't have a savings account but then again, her mother doesn't either! My sister doesn't put anything aside in the way of emerg savings, college or retirement! She doesn't believe she can afford to.

 

[Mrs. Bradbury]

This strikes a nerve with me, because it is so hard to live within our means raising children, but we've mostly done it. After my divorce I bought a house that I knew I could afford for less than the appraised value. It is definitely not grand, and less than 1700 sq. ft., but it does have 2 bathrooms, so I'm fine with it. I love my little house. My daughter has been mortified that she lives there. Her friends all have better circumstances that as a grownup I can see why their standards of living are so much better in my daughter's eyes - 2 or more sets of indulgent grandparents (we have none), living off credit (we pay cash), starting up businesses for the SBA loans (that first year is GREAT), being serial bankruptcy filers, etc.

Over the weekend my daughter told me that she just found out that the reason one of her close friends moved out of a gated community and into a regular house almost 2 years ago was because it was foreclosed on. I suspected that, but hoped because it had been built a spec house that perhaps it finally sold. The same friend's mother sold her expensive car to buy her kids Christmas presents this past year. It was a real shock to my daughter. And through all of this, her friend never shared what was going on (and still is) with her friends. It's sad.

 

[schoen]

I think there is very much a happy medium that can be attained. For instance, My brother and sister both had part time jobs in high school. Neither of them were involved in sports or after school activities. They both consequently, bought their own cars and clothes.

I was the youngest, and I didn't have time in high school for a part time job. I was busy with sports and after school activities. There were days that I would have three different sport practices in one night. I also had to study. So, I didn't get a job until halfway through my senior year in high school. My parents placed a certain value on those experiences. While I was talented at the activities and sports, it was clear I wasn't going to pay for school with them.

I had certain limitations though. I didn't have a car, I couldn't wear whatever I wanted, my mom picked out, or at least had veto power on my clothing options. I did work part time in the summers, because I had to pay for half of all of my summer camps. I went to a seven week institute for debate.

So, while I wasn't learning the value of a dollar at that time, I was learning other valuable lessons that have suited me well in life. My parents didn't pay for college, and I learned the money lesson in college. I was probably a little entitled, but my parents never really over indulged me.

My brother and sister were always happy to remind me of how lucky I was, and that taught me a lot too. I just think that there are a lot of ways to approach money with kids. I certainly never hurt for anything, but I hope I didn't come across as a spoiled brat.

 

[deerhart]

I was the youngest, and I didn't have time in high school for a part time job. I was busy with sports and after school activities. There were days that I would have three different sport practices in one night. I also had to study. So, I didn't get a job until halfway through my senior year in high school. My parents placed a certain value on those experiences. While I was talented at the activities and sports, it was clear I wasn't going to pay for school with them.

This is why my parents did not require me to work in high school. Most jobs in my small town did not want to work around sports schedules. I did have one my senior year and for most of the school year I worked Saturdays and Sundays only. I had always worked in the summer (usually part time for my godfather working some of his fields for a few weeks), but camps made it difficult.

If I had more homework, I would never had a job because school came first, then my activities, then a part time job. I did work all through college (but it was much easier to schedule that then it was in high school).

 

[princessmom29]

I was another child who did not work until the summer before college, and only worked summers until I graduated. I had a car at 16, but it was a 1982 corolla(In 1996), and I saved half of the $800 it cost by babysitting. My parents gave me gas money so they didn't have to cart me around to everything. I had some kind of practice every day after school between academic teams and color guard for the marching band. I took every AP course offered and left high school with a year of college credit and a full ride scholarship. I worked summers to save gas money and money for incedentals thoughout the year. I took the maximum number of hours covered under my scholarship (20) every semester to maximize the use of it. I had parents who were married at 16 and had worked hard to get by for a long time. They couldn't afford to pay for colege so I knew I HAD to get a scholarship or I was going to have to go a semester and work a semester to be able to finish. We did not have money for designer anything, and when I was small we were often a paycheck away from going hungry. It got better as I got older and Dad climbed the ladder at work, but there was never enough for "extras". I am trying to teach DD6 about the value of a dollar, but it is hard to balance that with wanting her to have the things I never had. I really have to work hard to make her work for things she wants, and set realistic limits.

 

[design_mom]

I mentor 18-19 year old girls in the Philly/NJ area. These girls come from solid middle class average families. Let me tell you about the average girl
6) quite a few have credit cards.

I agree with you about most things. When I was in high school though, my parents co-signed for a credit card application for me, "to build my credit" they said. It had a very low limit (maybe $250). I think that was one of the smartest things they did.

I got to see how credit cards work while I was still at home and couldn't get myself into *too* much trouble with the low limit. I was a responsible kid and never maxed it out, but my mom sat with me and showed me what my payment would be *next month* if I only paid the minimum this month.

By the time I got to college, I walked right past those tables where they were offering the free gifts for signing up for credit cards. Many of my friends snapped cards up left and right. And some of them ended up in serious financial straights because of it.

I do not think kids should be handed everything, but a credit card in high school (along with some parental teaching) can go a long way toward a financially responsible young adult.

 

[indimom]

I do not think kids should be handed everything, but a credit card in high school (along with some parental teaching) can go a long way toward a financially responsible young adult.

You hit the nail on the head. It all comes back to this...

 

[clarabelle]

I want my DDs to have really safe cars -not clunkers.
I expect to buy them a car because of this.

 

[Vivianne]

As a "childless" adult...who's paid for EVERYTHING they have owned, etc. you have my admiration for starting this thread.

 

[MrsPete]

I agree with you about most things. When I was in high school though, my parents co-signed for a credit card application for me, "to build my credit" they said. It had a very low limit (maybe $250). I think that was one of the smartest things they did.

I got to see how credit cards work while I was still at home and couldn't get myself into *too* much trouble with the low limit. I was a responsible kid and never maxed it out, but my mom sat with me and showed me what my payment would be *next month* if I only paid the minimum this month.

By the time I got to college, I walked right past those tables where they were offering the free gifts for signing up for credit cards. Many of my friends snapped cards up left and right. And some of them ended up in serious financial straights because of it.

I do not think kids should be handed everything, but a credit card in high school (along with some parental teaching) can go a long way toward a financially responsible young adult.

This is one of the things that my mom did right for me too. When I was in high school, credit cards weren't common -- even among adults -- so she didn't teach me about those, but she did take me down to the bank the summer before I started my senior year, and she helped me get my first checking account. Every month my senior year, she made me sit at the table and balance that checking account against my statement. When I went away to college, I had a firm understanding of checking and I never got myself into trouble.

Today things are a little different, so this is my plan for my daughter:

This summer (she's about to turn 16, and this'll be the summer before her high school junior year) I plan to get her a checking account. She plans to get a first job this summer, so the timing works out well. She'll have a year to learn to manage JUST the checking account.

Next summer (when she's 17 and about to be a senior in high school) I'm going to help her get a low-low-low limit credit card. She'll have her senior year to master using it and paying the bill.