Teaching children: budgeting

[shootingstar]

http://www.theglobeandmail.com/globe...1949455/page1/

Well how did you learn over time?

Looking back, I think it's remarkable that all of us, myself and sibs, have been savers as adults. We don't do terrible things on each other ie. borrow money and never pay back, or pestering each other for loans or leaching off one another. We each have bought homes on our own. We didn't borrow from parents.

And we never got allowance as children nor as teens. Parents just couldn't afford it.

I am not kiddin'. The rule of thumb around the house: was we would have greater freedom of what we wanted when we started to earn our own money.

And we weren't allowed to take on part-time paid jobs until in our final 1-2 years of high school. We had to focus on our studies.

I'm not sure how my parents did it..but with each of us there were some fierce arguments. Whatever we each asked for, it had to have a good reason and be justified, so usually one saved the discussion/debate for something that was hotly desired.

I do credit my parents that they engaged in long thoughtful discussions amongst themselves about their finances...which large part of the time they never hid from us. Of course they didn't have "sinful" spending habits or obsessions where one of them spent an obscene amount of money in a wasteful way.

When I was 12 yrs. my parents told me how much they paid for their first house.

[Crankin]

My parents didn't teach me explicitly. I got an allowance from about age 10, which increased to about $5.00 a week when I graduated HS in 1971. But that was really for fun money. Like going to the movies, etc. My parents paid for everything. When I was young, until about the end of middle school, they had tons of $. Then, my dad lost his job and it was never the same, really, even after he was employed again, but I had grandparents who picked up the slack for a lot.
I started babysitting in 7th grade and made a TON of money. I continued this through my first 2 years of college and then had a work-study job at the university. I bought a lot of my clothes and also spent for social activities. I had a savings account, which I had to use for books and stuff.
If anything, I learned from my parents. Don't do what they did! Get an education and save for retirement. My dad is 86, has nothing to show for many years of hard work. I always had a bit less than everyone else, even when my parents were very, very comfortable. No trips to Europe, no car of my own, etc. We went to Cape Cod every summer (rented a cottage, no second home) with the whole family, no summer camp for 8 weeks like all of my friends. My family is (was) very "Yankee," which means no big show of stuff, despite the fact they were surrounded by wealth.
My own kids had plenty, but always less than their friends. They each got a savings account in first grade. We made them pay for their own ski lessons when we moved here with some of that money! Boy, they hated me for that. They got an allowance for fun stuff, but we paid for most things. They used to pool their birthday and Chanukah money to buy computer games. Oldest son got his first real paid job as soon as he could drive himself there and so did the second one. They also both babysat from age 12 on and made plenty. Especially the younger one; he was besieged with requests from families who had boys when he was the only boy who worked in the child development lab at the high school. In fact, he bought his first bike with that money and that is what started our family cycling.
My kids are both financially independent and responsible. They also both like nice things, which I am pretty sure they learned from us. We made sure they started off with no debt, but the rest was up to them.

[Tri Girl]

I was #7 of 8 kids. Never earned allowance and always had hand-me-downs. In my house you got a job when you turned 13 (babysitting or mowing lawns until it was legal to work). I paid for half my car (parents paid the other half), and I paid my own insurance/gas on that car. Once I got a job my parents didn't pay for ANYTHING (well, aside from the obvious food and shelter in the house).
Once I got a job I paid for clothes, school lunches, extracurricular expenses and anything else I needed/wanted.
I am appreciative of how my parents raised me with finances. I appreciate everything I got because from age 13 on it was bought with my own money.
One bad thing is that I was never taught how to balance a checkbook, so when I got to college I bounced a dozen checks before the bank lady sat down and taught me how to keep up with an account (sad, but true- I was soooo embarrassed ).

When I got to college I went a little overboard and opened up a credit card and spent WAY too much money on things I didn't need because we had so little growing up. Got smart my senior year of college and got it all paid off. Now I save like a maniac and don't live beyond my means (I live below my means and pump as much as possible into savings and retirement).

[shootingstar]

Once I got a job my parents didn't pay for ANYTHING (well, aside from the obvious food and shelter in the house).
Once I got a job I paid for clothes, school lunches, extracurricular expenses and anything else I needed/wanted.
I am appreciative of how my parents raised me with finances. I appreciate everything I got because from age 13 on it was bought with my own money.

Wow, Tri Girl, starting to pay for serious stuff at 13...

My parents were quite poor but still they didn't ask that out of us and if we weren't allowed to have a job at that time, well then nothing was possible.

Actually even at university for my 2 degrees, I was flabbergasted that many students went off south into Florida to vacation for a few days. None of my friends did, and they came from families with more money. As soon as I started to earn money for full time work after university parents told me to start saving abit for retirement.

I started to listen them ...3-4 yrs. later, socking abit of money lazily away, not truly understanding what I was doing in terms of making money grow. Then I snapped out of it when I started to consider a home...

Wow Murrien no credit card. That is an achievement. And I'm a person that has only had to pay interest twice in my lifetime on overdue credit card bills. I consider it an achievement that I don't used debit card. So M. you are remarkable.

[Tri Girl]

Wow, Tri Girl, starting to pay for serious stuff at 13...

My parents were quite poor but still they didn't ask that out of us and if we weren't allowed to have a job at that time, well then nothing was possible.

Don't mean to make them sound like slave-drivers. I think they just really wanted us to know the value of a dollar and to not take anything for granted. And plus, with so many kids I truly think they just needed help with expenses- and none of us minded. I didn't know any better so it didn't seem unreasonable. I earned about $20/week from babysitting and that was enough to buy lunch at school (seriously- all I wanted to eat at lunch was a pizza pocket for $1 at lunch) and the clothes I wanted (even then I was a Goodwill/thrift store kind of person). By the time I got a real job and started driving I earned a lot more. Acadmeics were VERY important to them, too, and we had to toe the line with our schoolwork. I worked hard academically to get a scholarship to college because I knew that scholarship and loans were the only way to get a degree.

I take that back- they always took us clothes shopping at the start of the school year and they bought us a new pair of shoes and a new outfit. I'm sure that set them back quite a chunk of change. They worked sooooo hard (mom worked 2 jobs, dad worked one with very long hours). They did the best they could with limited educations and resources. I never felt like I wanted for anything or that I went without. I never felt poor, until I became an adult and realized what little we had. We only took two family vacations growing up- when I was 11 we went to the Grand Canyon and when I was 14 we went to Disneyland. Those were the BEST vacations I've ever had (even better than some I've had as an adult).

[jessmarimba]

I grew up with my aunts' old toys and thrift-store clothes. We would go on vacation in the motor home for a month in the summer, but it was the thriftiest summer vacation you ever saw - my sister and I would save the coins we found to buy candy We didn't get an allowance, even when we did we couldn't "have" it (It went in the bank), we brought bag lunches to school and field trips, and I don't remember seeing a movie outside of the $1 theater growing up.

One thing I'm really good at now is vacationing on a budget (it helps that I like to camp!) But in reality, the only "fun" thing I spend money on now is plane tickets to go see my guy.

[lph]

My son has his first job now at 13, delivering the paper 3 times a week. It's 2 hours of hard work each time, and he deserves the money he makes, which is considerable for a 13.yr.old. So far he's free to spend it on anything he likes, but we cover food and lodging (of course), most public transport, basic clothing (which he cares zip about) and basic used sports equipment - bike, skis and skates. If he wants new gear or expensive clothes he'll have to pay for them himself, but so far I think all he's paid for is a computer game or two and a couple of outings with friends. If he was just spending money all over the place instead of saving it we might ask him to pay more himself, but since he's that thrifty we don't.

[tangentgirl]

One big thing I regret is not starting contributing to a 401k earlier. Dangit, I worked at <big company> for 5 years starting at age 18. They matched, but I was so young and dumb and retirement seemed stupid and far away and why would I put my money into something I didn't understand, when I could have an extra $5 in my pocket right then? I remember even trying to turn them down for health insurance, cause I didn't want to pay the extra $4 a week or whatever it was. Luckily that didn't fly. Yeah.

That kind of stuff just wasn't valued or talked about in my family. My parents didn't have jobs with *fancy* things like retirement or insurance.

High school, on the other hand, could have done a better job. There should be mandatory classes on personal finance. I didn't really figure things out until my early 30s, after making a concerted effort to learn more and change bad habits.

**Editing because I'm still shaking my head at my 18yo self. I remember literally thinking that the 401k stuff must be a scam and people who gave their money to it were suckers. Geez!**

[shootingstar]

My son has his first job now at 13, delivering the paper 3 times a week. It's 2 hours of hard work each time, and he deserves the money he makes, which is considerable for a 13.yr.old. So far he's free to spend it on anything he likes, but we cover food and lodging (of course), most public transport, basic clothing (which he cares zip about) and basic used sports equipment - bike, skis and skates. If he wants new gear or expensive clothes he'll have to pay for them himself, but so far I think all he's paid for is a computer game or two and a couple of outings with friends. If he was just spending money all over the place instead of saving it we might ask him to pay more himself, but since he's that thrifty we don't.

Great, lph. My dearie has his story of his paper route which he had back then at that age and biking around in the winter through the snow to deliver newspapers. They were poor enough, he actually offered to his mother, to pay for some food at times. Can you imagine, at that age? I know his mother took on knitting (this was the 1950's) and other work to make money. His stepfather occasionally drank too much.. and was not as frugal as his mother.

Technology these days, is just one more type of stuff for anyone to covet these days. Especially kids unless they have other passions/distractions.

I do have a favourite memory of my mother sewing a shirt for my father with standup collars, tailored cuffs.....by using expensive Viyella lightweight plaid wool from Scotland. He wore it nearly every wk. It was her way of "treating" him with a gift, I supppose. She spent a certain amount of time with him to select the fabric, etc.

[shootingstar]

I do get annoyed when there is a strong perception that kids from poor families are deficient ..in many different ways. That they are deprived of certain experiences.

True I did not go on any overnight trips..my parents just weren't into camping. We only went on day trips by car to Toronto/southern Ontario for the day.. several times per year.

I never travelled beyond until I started to earn money. So yes, later cycle-touring has given me some amazing experiences. Now I've travelled enough to have seen parts of my own country, more than some of my friends.

True, there was no money to enroll me in art classes, no music lessons for any of us, no courses for anything for anyone in family as kids. But academically, we were scoring in the top 10-15% in school. Yes, I got into furious debates about getting art supplies, which parents eventually relented. Over time, they realized it was wiser to have allow this, since they knew it kept me busy, happy and occupied at home.

So it was resorting to outdoor play, the library, sewing our own clothes (to remain fashionable), later, cheap coffee with friends, etc. Life was not easy, but not horrible. If my parents continuously ragged on how poor we were, then it would have been a complete drag.

[tulip]

I've always been horrible with money. It stems from my family never having any, growing up on food stamps until I was 12, and general anxiety about it. My mother never has never been in debt, but she's never had any money, either. My father has been in debt, but he always manages to lurch out of it, and then into it again. So I swing from being being in debt to just being broke. Fun!

Mind you, I have two houses, a relatively new car, three nice bikes, and a fabulous kitchen...so things could be worse. Now I just have to pay for those things.

Since January, however, I've come leaps and bounds with some education, a new philosophy, and some very useful software. For the first time, I have money in the bank and I'm not spending it. I have a plan to pay off my debt, and I'm working the plan. I have a budget and it's incredibly powerful, but I'm not "starving" so I know I won't "binge."

Of course I wish I had done things differently in the past, but all we can do is start where we are.

[limewave]

I do remember getting an allowance at a young age. I also remember, around 8-10 years old, my parents taking me to the bank to open my first savings account. We did Christmas Club through the bank: every month we added a little bit of money so that at Christmas time we had money for gifts. I still have the same Chirstmas account.

I feel like my parents did a good job of teaching us about money. They did help us out, but everything they did was working towards financial independence for us. For example, when I was 16 my brother and I shared a car that my parents bought and paid for the insurance--but we had to pay for gas and repairs. Then when I was 19 years old, I bought my own car and my parents paid the insurance, but only for the first 12 months. That was also when I got my first job and first apartment!

Only once, as an adult, I had to ask my parents to borrow money. It was to buy a computer to start my own freelance design business. It was an interest-free loan. I had a small monthly payment I had to make and then he also got a percentage of the profits from my free-lance jobs until he was paid in full. Hopefully I never need to borrow money from them again!

[redrhodie]

I got my first job at 12, working in a church rectory. My mom was the church secretary, so I'd come after school and work, and we'd drive home together. I didn't get an allowance once I had a job. I didn't work steadily, but had summer jobs and babysat regularly through high school.

After high school, I took a year off, and got a full time job. I lived at home, and my mother charged me rent. Her philosophy was that if I worked, I contributed. At the time, I couldn't believe I suddenly had to pay for what had always been free, but in hindsight, it was really smart and kind on her part.

There were times we really struggled, briefly on welfare, when my mom couldn't find work. We got government assistance for heat. I don't remember ever being on food stamps, but I do remember standing in line to get free cheese. We often didn't have a car, and when we did, it was never a reliable one. Going to the grocery store was a nightmare. My mother would rarely ask anyone for help, even for just a ride to the store. I think she was embarrassed, and too proud.

When I went to college, I lived at home to save money, and I didn't have to pay rent since I was in school. My dad chipped in more at this point, but I still maxed out my student loans. My mom and brother helped me pay them off after I graduated, which I'm still amazed about, and grateful for. As soon as I could afford to pay the balances myself, I took over their share. I ended up paying them off years early. I was lucky and had a good job. I helped her financially when she needed it, but it always made her feel bad to accept money from me. She never did have a good relationship with money on her own, but somehow, she taught me well.

[Crankin]

ShootingStar, I think the main thing with the thought that "poor kids" are deprived is that they are educationally deprived, or not encouraged to do well in school, for a variety of reasons. That certainly wasn't the case for you, as it was a core value in your family. And, I guess it could be debated that lack of exposure to art, music, travel makes you deprived. I had exposure to art as a kid, but music? Forget it. My dad played a lot of jazz at home, but that was it. No one played an instrument and no one traveled. My family even made fun of those who traveled . It took me a long time to get over that one. My family had the $ to do all of these things, but it just wasn't imporant to them. I didn't feel deprived, though, even though everyone else took music lessons and traveled. When one of my kids signed up for music lessons at school, I was amazed he had talent. It definitely comes from DH's side. Then, when DS #2 stated he didn't want lessons (by this time we had mooved to a community where everyone is required to take lessons in elementary school) in middle school, my friends really tried to tell me I was depriving him and I should make him. I assured him I had lived without having music lessons. And the music teacher in his elective class really did not believe him, when my son told him that he couldn't read music or play an instrument, especially since his brother was so talented. It was such a core value in the community, this was seen as odd.

[Melalvai]

I'm mostly glad that we are (still) struggling to make ends meet. I'm worried that we won't be able to buy a house and save for retirement, but we're proud of being debt free (except for student loans) and I feel really good each month about saying "I can by this and this, but that will have to wait until next month". It's the second half of that sentence that makes me feel good.

My daughter gets a small allowance, which mostly she saves. We buy everything she needs and I make sure she has spending money (either from her allowance or I'll just supply it)--but despite that she herself has ample money she is SO worried about money all the time, and she hates parting with it! I love her dearly but I don't know how she came to be such a tight a$$! She's been that way since she was quite little. We aren't like that, neither are we the opposite, I'd say we used to spend a little more than we ought and now we are a lot better at saving--but still not unwilling to part with money like she is.