This is a guest post from Andrea, a 29 year-old Licensed Clinical Social Worker, full-time freelancer and single mom paying off over $60,000 in debt. Visit So Over Debt to follow her journey out of financial chaos.
Like any parent, I work hard every day to make sure my son is growing up with the tools he needs to become successful. I make sure his basic needs are met, along with some of his wants, and that he learns to treat others with kindness and respect. I help him with homework and try to make sure his diet is balanced (which is difficult, since he’s the pickiest eater on the planet). One of my constant worries, though, is that I will fail to prepare him to deal with money responsibly.
My concern for my son’s financial future has roots in my own childhood. I grew up lower middle class, with a father who worked a blue collar job (and always had at least one business on the side) and a mother who stayed at home with my sister and me. Looking back, I see all the ways that my parents’ financial choices affected how I would view money as an adult. Despite the fact that my mom and dad were excellent savers and frugal spenders, I ended up with an addiction to shopping and spending that will take many years to overcome.
Wait a minute, you may be thinking. If your parents did such great things with their money, how did you turn out to be so irresponsible? That’s a good question, and one I have spent a LOT of time pondering myself. While I don’t blame my parents for my choices, I do recognize the opportunities they missed to prepare me for survival in the world of first, last, and security.
Here are the top 3 ways my parents raised me to be a financial disaster:
1.They kept their income secret. I grew up clueless about how hard my parents worked to stretch their small income. To this day, I only have the vaguest idea of how much they make in a year. Obviously it’s not a good idea to share your pay stubs with your 6 year-old (unless you want the entire first grade to know your income), but it’s also a disservice to him or her to grow up with no clue how much things cost relative to the amount of money coming into the home.
If my parents had explained to me, even on a percentage basis, how much they made versus how much things cost, I would have learned a lot about the realities of living within my means. When a child lives in a home where discussing finances is taboo, s/he doesn’t gain an understanding of valuable concepts like setting aside money for bills and future expenses, budgeting enough money to make it through the entire pay period, and prioritizing needs over wants. Instead, that child may grow up thinking that money magically appears when you want to spend it, like I did. The result? A potential financial disaster.
2. They didn’t include me in the bill-paying process. Twice a month, my mom got out her checkbook, a calculator, and a stack of envelopes and spent hours at the kitchen table. I knew I wasn’t allowed to bother her during that time unless someone was hurt or the house was on fire, but I never understood what she was doing or why. When I became an adult, I had no idea what to do when bills were due between paydays, for example, or even how to write a check. I sure learned how to swipe a credit card, though!
Kids of any age should be involved when it comes to paying bills and completing other basic financial tasks. They need to see how you interact with tellers at the bank, how you organize your bills, and even how you deal with inaccuracies on your bank statements. I’m embarrassed to admit that I once paid a phone bill that was $200 more than usual because I didn’t realize I could call and find out why I was overcharged. Why did that happen? Because I was never exposed to situations like those until I encountered them on my own.
3. They did my saving and spending FOR me. When I got money for Christmas or birthdays as a kid, I knew it went straight to Mom and Dad. The problem was, I didn’t know what happened to it after that. (Turns out it went into a savings account, which paid for my first car in full when I was 16.) Same thing when I spent money – when we shopped for school clothes, for instance, I couldn’t tell you what we spent. I just picked out what I liked and my mom told me whether or not I could get it.
I know now that my parents had a budget category for everything, from our summer trips to the city pool to the cost of my hideous perms in the early 90s. However, they never gave me money of my own and allowed me to manage it. It would have been so easy to say, “This is your weekly allowance for the city pool. It has to cover admission and lunch, so you need to figure out how much you can spend each day.” Something that simple would have gone a long way in teaching me simple math, budgeting, and doing without when I spent beyond my means.
Don’t Raise Financial Disasters
My parents’ fear of allowing me to mess up as a child resulted in an adulthood where I seemed to make it my mission to mess up in every possible way. My mistakes have been a wonderful teaching tool as I raise my son – I know better than to protect him from anything to do with finances – but they have also impeded me from providing him with the lifestyle he deserves. I’d much rather let him make mistakes now, under my guidance, than send him into the world as clueless about money as I was.
What are you teaching your kids about money, either directly or indirectly? Will they grow up with a sense of what to do when it comes to financial matters?
Jana’s note: If you want to read my answer to Andrea’s question, make sure you read this.
Comments
Trackbacks
-
[…] from So Over Debt posted at Daily Money Shot the three ways her parents raised her to be a financial disaster. My parents also raised me to be a financial disaster, and they are kind of disaster-y […]
-
[…] How to Raise Your Children to be Financial Disasters. “Like any parent, I work hard every day to make sure my son is growing up with the tools he needs to become successful. I make sure his basic needs are met, along with some of his wants, and that he learns to treat others with kindness and respect.” Daily Money Shot […]
-
[…] How to Raise Your Children to Be Financial Disasters Keeping your kid in the dark when it comes to your finances might end up backfiring. Invite your child to the kitchen table the next time you’re paying the bills and you could save him or her from a life of future credit card debt! [Daily Money Shot] […]
-
[…] (or will you teach) your kids about money? I’ve written several posts about this. (See here and here.) Have you thought about how your habits will affect your kids’ and grandkids’ […]
Great article. I think it’s extremely important that one of the biggest things we teach our children is about money. Not understanding can lead to problems down the road.
Sean @ One Smart Dollar recently posted…What is the Average Credit Score By State?
Yep! Totally agree. My son gets annoyed because I spend so much time explaining money-related concepts, but I don’t ever want to think that he doesn’t know how to do things because I didn’t teach him.
Andrea @SoOverDebt recently posted…Want to Solve Financial Problems? Learn the ROPES
I know someone who had that exact financial upbringing, almost down to the last detail. She and her husband are about 500k in debt after four degrees between them, a house, two four month trips to Europe and across the US, and two kids.
Jordann recently posted…Stop Spending with an Involuntary Cash Diet
Oh my gosh, I am SO glad it never got to that point for me. Then again, I’m a little jealous of all the traveling – if I was going to waste a ton of money, I wish it would have been on something like that instead of junk!
Andrea @SoOverDebt recently posted…Want to Solve Financial Problems? Learn the ROPES
I, also, had no idea about my parent’s money growing up. It seemed like we had a lot because we got almost everything we wanted, but then sometimes we weren’t allowed a quarter to play pac man or something. I never did figure it out and still don’t understand. Yeah, it’s important to raise your kids with some knowledge of money!
TB at BlueCollarWorkman recently posted…Sheriffs Kick Down Doors in the Real World
My mother started showing me mortgage amortization schedules when I was in the first year of middle school, explaining to me, line by line, the interest we can save if we can just make a few more payments at the beginning of the loan term. I’m not sure they’ve been very good with showing me what they made until I got older. Now, though, when I hear about people making $200K and their spending habits, I think of my parents and realize, all over again, how incredibly frugal they are in some ways (eating out, vacations, etc.) so that they can spend in others (tuition for me, rental properties, etc.).
Well Heeled Blog recently posted…Fess Up Friday: 5 Financial Stressers
My parents did all kinds of things to save in some areas so they could spend in others. My mom had the most crazy 80s hair EVER and usually shopped for her clothes at thrift stores, but it was because those things would have taken money from the clothing budget for my sister and me. We always had the same clothes, shoes, etc. as everyone else, and I really wish I would have realized the sacrifices back then so I could have been appreciative of what they did.
Andrea @SoOverDebt recently posted…Want to Solve Financial Problems? Learn the ROPES
Such a well-written post, Andrea! I loved it! I think my parents did a pretty good job of teaching me how to not be a financial disaster (I think I turned out okay;). The one thing you said that really resonated with me was about sharing income. I never knew – still have no idea – how much my parents make. When I was at college and hear things like, “We just don’t know how it’s all going to add up this month,” or, “We’re trying our hardest to make sure you can stay at college,” it would have been much less frustrating for me if I actually knew how much money they were talking about. Were they a few hundred dollars short? A few thousand? I had no idea. Even if I knew percentages, or a rough budget, I would have felt much more involved and understanding of our family’s financial situation. That’s one thing I will want to share with my children – to an extent, and when they are old enough!
ImpulseSave recently posted…Fireside Friday: I am an Impulse Buy
That has always driven me crazy as well. I understand my parents’ desire for privacy – I really do – but it’s hard not knowing at all. If I had ever understood that bills were X percentage of their income or that my dress for the senior prom kept them up at night crunching numbers, I would have done things differently. I look back at some of the things I did and just cringe, like the summer I insisted on going to the movies 2-3 times a week. I can’t imagine what that did to their budget (I do know now that my dad made VERY little when I was a kid) but I didn’t know so I couldn’t change my behaviors accordingly.
My son doesn’t know every detail of our financial situation, but he has an idea of how much things cost and how much is left over after bills. Hearing “We aren’t going to spend money on that right now because we need other things” is good for him!
Andrea @SoOverDebt recently posted…Want to Solve Financial Problems? Learn the ROPES
Teaching kids financial lessons is important, and I hope to use allowance, example and little teachable moments to help my kids prepare for the day they’re let loose on their own.
Christa recently posted…Junk Food Taxes: The Answer to an Economic Problem?
I’m a huge fan of allowance. I know some people in the finance realm argue against it, but I see infinite wisdom in giving kids money of their own. No better way to teach them how to use it than actually letting them use it!
Andrea @SoOverDebt recently posted…Want to Solve Financial Problems? Learn the ROPES
My parents never really taught me anything it was much of a secret as well. And although I don’t have kids nor plan on having any, I do plan to try to teach my little sister how to handle her finances responsibly.
That’s a great thing to do – I was the youngest, so I didn’t have that opportunity. But I do try to teach my younger cousin, who didn’t really have a financial example to follow when he was growing up either.
Andrea @SoOverDebt recently posted…Want to Solve Financial Problems? Learn the ROPES
I knew we were poor when we were growing up but my parent’s never did budgets or savings. So that definitely affected me–I didn’t realize that they are kind of needed or the debt just keeps getting bigger and bigger.
bogofdebt recently posted…Friday’s Link Love
My parents did them; I just didn’t know it! It took me a long time to realize I couldn’t just blindly spend money.
Andrea @SoOverDebt recently posted…Want to Solve Financial Problems? Learn the ROPES
My parents kept a lot of secrets from me, but I did watch them spend cash and not go into a lot of debt. They also reminded me that they had no mortgages and would only buy things when they “had the money.” That helped quite a bit with me.
Nick recently posted…The next investment craze: betting against marriages?
A little information is always better than none at all! Sounds like your parents did some good with the things they disclosed, even if they didn’t tell you everything.
Andrea @SoOverDebt recently posted…Want to Solve Financial Problems? Learn the ROPES
Wonderful insight here Andrea. I tend to shy away from writing about mistakes I feel my parents made for fear that they might read it! Good idea though to write it as a guest post for somebody else’s site. Less likely they’ll find it that way.
Ironically, my post for today also deals with consequences of parental influence on the topic of money.
Matt @ RamblingFever Money recently posted…Paying Children for Work and Knowledge
Luckily I don’t have to worry about that since my parents know that I feel they could have done better in those areas. I have wonderful parents – they just weren’t perfect. And they’re okay with that. 🙂
Andrea @SoOverDebt recently posted…I Suck at Cooking
The older I get, the more I realize how my parents (mom) was able to stretch their budget. Her priorities shifted when she had kids.
Marissa @ Thirtysixmonths recently posted…Cardboard Arcade
Great article Andrea. I have realized over the past few years that my parents really taught me a lot about money. Not directly but indirectly. I watched the way they lived their lives and I have used that as a template for some of my decisions.
Sean @ One Smart Dollar recently posted…Care for Bugs With Your Frappucino?
That’s what I’m trying to do now – backtrack and watch what I DO know about my parents’ habits to figure out what decisions I should make. So far it would work out pretty well if the universe would cooperate! 🙂
Andrea @SoOverDebt recently posted…I Suck at Cooking
It is partly the parents fault, but it is partly the education system’s fault that our children have no clue about finances. Starting in junior high, there should be one finance course for the children, and that should continue through high school.
ShortRoadTo recently posted…How To Invest Your 401k Plan – Part 2
I think it would be amazing if schools took a more active role in teaching financial concepts. When I was a junior in high school, we did a mock stock market competition in one of my classes, and to this day, that’s the only source of knowledge I have when it comes to investing. If there had been an entire class devoted to things like that, I’d be a financial rock star right now!
Andrea @SoOverDebt recently posted…I Suck at Cooking
Great post! I wish my parents had shared with me how they made their budget and/or how to be financially responsible. I think a lot of parents hide this from their children because they don’t want them to feel burdened but I think it’s important to teach your kids about money and how to properly handle it!
Janine recently posted…Warm Toes
I completely agree with you – so many parents seem afraid to tell their kids the truth about the family finances, like it may scar them for life. And I do think there’s such a thing as too much information. But understanding the basics will go a long way in helping kids prepare for adulthood.
Andrea @SoOverDebt recently posted…I Suck at Cooking
My parents never really communicated their financial standing to me either besides the fact that I should only shop at cheap stores and buy cheap stuff. It didn’t make finance very appealing at all. I wish they had done more to involve me and teach me about money. You’re doing a great job with your son!
From Shopping to Saving recently posted…Anxiety: The Future and Change
Thank you! I really hope he learns SOMETHING from all my stupidity… If he ever does some of the things I’ve done with his money, I might smack him!
Andrea @SoOverDebt recently posted…4 Easy Ways to Start Saving Money
Great post, Andrea! Like you, my parents were excellent savers but they didn’t really teach me much about finances either. Luckily, I inherited their saving nature. 🙂 Your son is lucky to have you!
Hi Andrea, you are so smart and pretty too, this article is really good, this topic is very interesting, your point of view is good, we have to training our kids for the future to manage finances in a smart way, in my situation my parents never communicate their financial standing to me and never raised me about this kind of topics but with the pass of the time I understand that this kind of information is really important because help people to improve your life style.
Best regards,
Guillermo