The problem with moving around so much as a child is that you are never given much opportunity to establish your place in the local community. Now, some kids adapt to this changing lifestyle wonderfully well and for the most part, so did we. There's a lot of excitement to be had in seeing new towns, discovering new homes, meeting new playmates. But for the four of us kids, of which I am the youngest by 7 years, there were downsides as well. While other peer groups at our schools had known each other for years, some friendships dating back to kindergarten, we were the perpetual 'new kids'. My need to stay grounded in a community became an integral part of what I wanted for my future family - I needed to find a caring, safe community in which to raise my children for a very long time. When Jay was diagnosed, this became even more important.
I can't fully explain why this was always such a big deal to me, except to say that I craved more stability for my family. No stress over employment and moving to where the jobs were. No constant threat over our financial security. I would never, ever fault my parents for the life in which they brought the four of us up in - it made us the people we are today - but I knew from the moment Talented Hubby and I began our lives together that I would not be able to live the same way with my own family.
I have been spectacularly blessed in my choice of spouse, LOL. He is a man of integrity and has the best work ethic of anyone I've ever met. When we first began dating he was managing a video francise and promotion prospects were nil. He had a dream to break into a particular area of employment noted for its difficult entry process and he systematically worked his way through those requirements until he achieved his goal. He has since worked his way 'up the ranks' and I have never been more proud of the way he approaches life and family. His hard work and dedication have allowed me to stay at home with the kids since the first was born and for a wife to know that she is supported in that way - well, it speaks volumes. You gals know what I mean :)
As for my philosophy on money, well, I don't need to be 'rich' - although in the worldwide sense I realise that I already am. We have no debt except the house, run just the one car (I don't have a licence, so that helps!), prefer a movie and a pizza over a three-course restaurant meal, pay our bills in full and have a little money to play with at the end of the month. When I compare this - dangerous, I know - to the financial life of my parents when I was a child - woah. It makes me feel incredibly blessed and thankful. We're not fancy people. I don't buy shoes or handbags (purses) and I'm not a fan of jewellery. I'm still running on the same bottle of foundation I bought three years ago, which should give you a big clue about my priorities in life, LOL. We forego what others might call 'luxuries' to ensure our other priorities are met - and for me, this includes this home (in a 'good' neighbourhood), money left in the bank at the end of each month, and the opportunity to support our children at school, both with the usual expenses and with the extracurriculas..
This then, in short, is my General Money Ethos:
Offence, not defence.
Would you rather attack bills with resources you already have at your disposal, or spend your life running from them, constantly looking over your shoulder? Decide what's more important to you - instant gratification via credit cards, or peace with your finances.
Put your financial roots in solid ground, not quicksand.
Never underestimate the power of physical and financial security for a child. The money lessons they learn early on, will continue with them as an adult, both good and bad. Make sure the foundations are solid. Teach your children about money, and make it concrete and practical. Allow them to experience the effort required to earn something they desperately want. Show them the value of a dollar. Giving them an allowance is one of the easiest ways to do this. We pay our children half their age - Jay therefore gets $5, Boof $4 and Moo $3.50 per week (to get this, they are required to help out around the house, and yes, we've been known to put a stop-payment down if they're not pulling their weight!). Of this, we make them save half. The remaining half is free to spend, with direction from Mum and Dad. They've each learned the power of a dollar, but they've also been allowed to make what we could tell from the outset would be a mistake, such as buying a cheap toy from the dollar store. Let them play at being adults, before they are adults and their financial slip ups could ruin their lives. Better a $2 mistake now than a $200,000 one when they're 25.
Some financial decisions are the whole family's business.
The household budget is still a taboo subject for most families. Parents rarely discuss the finer points of their spending plans with their kids and as a result, most kids hit 'leaving home' age and have a very jaded view of what is needed to keep a household running (*raises hand sheepishly*, LOL). My advice? Start early. As much as you feel comfortable doing so, involve your children in family budget meetings. You should tailor the information to their age level of course, but kids can learn a great deal about money and their responsibilities around it, just by observing their parents. Let them see you paying bills, discussing how to save for Christmas, calculating how much money you'll spend on petrol (gas) this month. I grew up panicked around money, or frustrated that we never had any, and it began to severely impact my decisions as an adult. If you have to say no to a child's request for music lessons, be honest and give them a reason. If they're privy to even a few details of the household finances, it can be an easier pill to swallow. Children should also be involved in major financial decisions such as where to go for the next family holiday, activities to do while you're there, whether to buy a new television to replace the one that broke, that kind of thing. Kids can usually handle more than we think they can. Be careful though - you don't want to burden a five year old with the news that you're worried about your next house payment. The idea is that by the time they leave home they'll not only know how to work the washing machine, but also how money is a tool, not a god. The right attitude is key - and if you avoid talking to your kids about money because you think it's too hard, or they're too young, it will only be harder when they're a teenager or young adult.
What you spend your money on should be a mutual decision.
A lot of families I know who have a budget (and stick to it!) also have an accountability system in place. All purchases over a certain amount - let's say $100 - are discussed with the spouse, no matter what, before any money changes hands. Deciding whether to buy that item is then a joint decision. Certain larger, regular payments - such as the groceries, or Junior's sporting fees - don't really need to be discussed beforehand every time so long as both parties understand what the amount usually averages out at. Some families might find that a smaller 'accountability amount' is better for them.
Everyone needs an allowance, even the grown-ups.
Play money is an important - perhaps even the most important - part of sticking to a budget. Deprivation leads to horrible choices. Play money falls outside of the realm of accountability in our house. With the exception of children's allowances, which you might decide need to be divided into certain parts, like savings, spending or tithing, I'm a huge proponent of adult allowances and the free choice it allows each individual. In a budget-driven household, it is very easy to let a deprivation mindset creep in - "Before the budget I was 'allowed' to buy a coffee every single day! Now I'm meant to clear it with my husband first? Waaah! Where's the nearest shoe store?" (LOL) - and that's setting you up for failure before you even begin. Your allowance - whatever you and your spouse mutually agree is an appropriate amount - is yours to spend freely. If you're smart, you'll save some of it, LOL. If you really, really love that coffee and can afford to pay for it out of your allowance, then you should be free to do that. You will, of course, have to be disciplined.
In our family, even though we stick pretty closely to this philosophy on money, we still have our hard and frustrating decisions to make :) Just recently, we found ourselves with a small bonus payment so Talented Hubby and I sat down and discussed what we would spend it on. Naturally, putting a little extra on the mortgage was a top priority, but we also had a few minor household repairs we'd been putting off and were looking to replace some furniture. We decided on 'mini-budgets' for each of these items. We researched and thought economically. I had a wishlist of furniture items I would have loved to purchase but in the end we had to say no to some things in order to say yes to others. Did it hurt to watch what I was pining for slip away? I won't lie - it stung something shocking. But we prioritise our spending so that we're able to focus on the really important stuff. We could go out tomorrow and buy everything on our list, and then some. But we're not prepared to sacrifice so much of our hard work and savings to do it, so instead we compromised. We'll still get a couple of smaller pieces, but the bulk of the furniture fund will be put aside to purchase a sofa bed in the not-too-distant future (and I must say, I'm sure our regular house guests will be grateful - the poor dears have had to make do with an inflatable airbed on our loungeroom floor for a couple of years now, LOL).
I hope our kids are watching us around money, and taking mental notes. I hope they understand money is a privilege and a gift, and I hope they've learned enough from us to be comfortable enough around money to make the best financial decisions as adults :) They come with us to the grocery store, and count out money for the cashier (and they also get to, on occasion, see how a debit card works :P). Our economy with takeaway spending means we get to go out to a sit-down family dinner every 3 or 4 weeks, a meal we all agree trumps cheaper-and-more-frequent McD's tenfold. And my Little Calculator (aka, Boof, LOL) just about disolves into a puddle of glee when I drag out my Price Book - he LOVES helping me work out unit prices. This all makes a mama's heart sing :)
I'd love to hear about others' approach to money and teaching kids about money. Chime in in the comments :)
4 comments:
sometimes, no matter the founding, kids jsut dont get it.
my mum got FTB (or whatever the equivalent was back then) for my sister and i, and she put it in bank accounts for the two of us - half each. we got the same ammount of pocket money, half of which went into the bank account, the other half into a jar in our room and we could spend at will.
when we hit 18, we had access to the account and could do whatever we wanted with it. at 20, when i moved to america, i had over 10k saved up. when my sister went overseas on holiday at about 20, she had to borrow money from my mother. we had exactly the same funds, exactly the same financial influences. i save, she spends.
of course, the fact that when my father was earning 33k/year and rent was only $99/week, they never had any money left because he spent it all.. that kind of implies it might be genetically influenced.
Sarah - I honestly believe it's a combination of nature AND nurture. Take my (awesome) husband. He and his brother are both very careful spenders, and their Dad was in the financial services industry for forty years - so they got both the genetics AND the environmental influences. Those kids never had a chance to learn frivolity in spending! LOL.
I do get what you mean though. Talented Hubby got a job as a teenager - a typical first job, at a takeaway place - and saved every red cent he ever earned from that job, which allowed him to pay cash for a secondhand car at the age of 17 or so. He was able to save all this money because his parents still paid for everything - all his personal gear, special boy shampoos (I don't know! I'm reaching here! LOL), paid for school stuff, and I think at times even slipped him a $20 as spending money.
Compare this to me, raised with the whole feast-or-famine (and usually just famine) method of money management. When I reached the age of 16 and became eligible - because of what my parents didn't earn - for that student allowance (Austudy), I was like a kid in a candy shop. BUT my parents also insisted I pay for school excursions, personal toiletries, any special snacks, canteen money, any personal spending - everything - out of this money. Now, I'm not saying I couldn't have been more smart about it, because that's a lie. I was horrible with money management then. But the financial grounding both TH and I received as kids were worlds apart - and to this day I am more inclined to spend (within reason!) and TH is more inclined to save. TOTALLY influenced by what our parents directly - or indirectly - taught us :)
Long ago, I chose peace with my finances over instant gratification, I've never regretted it. L grew up in a family of alcoholics, there was never enough money, he is still panicky about money. We've been together for 7 years now and every single fortnight he asks if I have enough to pay the rent. With every bill that comes in, he panics that I won't have enough to pay it. Every single time I reassure him that my wage stays in the bank just for these things, our groceries are bought with his centrelink allowance, the part that he gives to me after he's bought his smokes and medications. It isn't much, but we manage and any money left over after rent and bills are paid goes towards extras that we need such as prepaid internet and mobile phone charges, batteries for torches and remote controls, occasional fish'n'chips for dinner, bus tickets. Not all of the money gets spent, I keep small amounts here and there that he doesn't know about. Emergency cash, for emergencies, a little put aside towards christmas. It's a tricky situation when you can't actively discuss budgets because of his instability.
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