Thoughtful Thursday: Cents & Sense

January 6, 2011

Thoughtful Thursday

Happy New Year! Welcome to the January Intelligentsia, the people who commented on every Thoughtful Thursday post for the month of December.

#23: Wiseguy from Woman Anyone?
#15: including a post one day after giving birth, Elana from Elana’s Musings
#14: A from Are You Kidding Me?
#12: Jill from All Aboard the Pity Boat
#7: Strongblonde from Strong Blonde

Thoughtful ThursdayThis topic was inspired by last week’s shopping trip with Lori and her daughter Tessa.

It was delightful of course just to be with them, but I was also struck by a particular set of parenting tactics that Lori used throughout the day. All of the shopping was a set of teachable moments.

One very obvious set of lessons were the impromptu math lessons — practicing mental arithmetic to calculate the sale prices, subtotals, and money remaining after purchases.

Less obvious was the wonderful financial training Lori was doing. Tessa had a lot of shopping she wanted to do, and she was required to use her own money for all purchases. Tessa had to make her own decisions about whether each item was worth its price; how to maximize a finite amount of money; delaying gratification; and needs versus wants. I’ve known many adults who don’t manage their finances as well as this 9-year-old girl.

Scenes like this may not be news to some of you, but I’ve never seen anything like it before. It’s the complete opposite of my upbringing. Anything I wanted was purchased for me. I had a lot of inherent self-control, so I actually didn’t take advantage of it the way that a lot of kids would have, but there were definitely a few big-ticket birthday gifts that other kids envied. I had designer clothes that I didn’t even want, and more toys than I could ever play with. I would have gladly traded all of those possessions for a college fund, which I didn’t have.

Financial education was never a consideration. My mother didn’t know how to delay gratification herself, she enjoyed the act of buying more than the items she purchased, and she was always broke at the end of every month, so she was not someone who could teach me anything about money. In fact, I wanted to teach her. As a kid, I was desperate to take over the budgeting and dole out reasonable amounts to her each week; now that my mother is fully incapable of handling her own finances, I finally get my wish.

I still operate somewhere between instant gratification and sensible purchasing. My biggest “impulse” buy? Years of IF treatments, spending all of our savings, then replenishing the savings by selling a house at a big profit, then spending all of our savings again and then some. My grand total for treatments was insane, much more than I’ve ever earned in a single year, but it was worth every penny. Though, by the time the twins were born, we didn’t have any money for a college fund.

How did your family educate you about finances? What do you wish they’d taught you?


12 Responses to “Thoughtful Thursday: Cents & Sense”

  1. Rebecca Says:

    We had a very feast and famine regard to money. My dad had nothing growing up and so he scrimped – I wish now that he’d spent more of his money while he was alive.

    I spend too much – but never get into debt. I would take my balance right down to 0, but no more. I have an unhealthy need for ‘stuff’.

  2. celia Says:

    My family did NOT educate me about finances. My Mom is just like yours. I had no college fund but cash whenever I asked for it. My Dad showed me how to do a budget once and figured that was the end of it. My husband and I use the Dave Ramsey system and are very content. We never fight about money and do not worry about money, either.Learning to delay gratification was huge for us- we frittered away over 60 grand from when we sold our condo. I consider it money well spent in one sense, because we would never be that irresponsible again. Peter is nine months, but we have him sit with us when we have our weekly budget meeting. He has his own column in the budget, we spend 200 dollars a month on him. If there is leftover it gets rolled over into his college fund.

    The best book I have ever read for educating children about money is “Alexander Who Used To Be Rich Last Sunday” by Judith Viorst.

  3. celia Says:

    I have been looking at your back posts and as near as I can tell, we have the same Mother.

  4. Elana Kahn Says:

    The one thing I really remember my parents teaching me about finances is to always pay my credit card balance in full at the end of the month. Don’t ever just pay the minimum payment, and if you can’t do the full amount one month, make sure you can do the whole thing the next month…don’t just leave it and pray it’ll shrink on its own. πŸ™‚

  5. Ana Says:

    My parents taught me frugality, but not necessarily budgeting–it seemed that they were always scrimping & pinching pennies and just SAVING all the time. I gravitated in the same way with my first job, but living life takes money, and I’m still just learning how to balance things. Thankfully they also taught me about using credit cards for convenience, not for credit–and paying the bills EVERY month. My husband apparently grew up with your mother. We are trying to meet in the middle with our approach to money, but still haven’t sat down and made a “budget” per se.

  6. Genevieve Says:

    My parents made me save 10% of every high school paycheck at first, and on trips, whatever I had was it. I am no good at saving now, but excellent at doing a lot with a little πŸ™‚

  7. strongblonde Says:

    my parents never overtly “taught” me anything, but led by example. example of what NOT to do, that is. growing up they always lived paycheck to paycheck. my mother was very frugal and my dad always spent a lot. we never went without and i never felt “poor”, but they always made it very clear that we didn’t have a lot of money. i think my mom’s attitude toward money has influenced me a lot: i HATE spending money now, nearly hyperventilate with big purchases (car, house, etc), and i will spend too much time going from place to place to evaluate cost/etc to make sure i get the “best” deal. in one respect it is good i suppose. for example, b and i have been married nearly 12 years and we have never purchased a tv. we’ve wanted one several times, but i always manage to talk him out of it based on other stuff we could do with the money. we don’t have a huge savings account now and don’t sit down to “plan” our money with regularity, but we talk about it a lot. both of us know where our money is going. i think that for the kids we would like to have something that is a little more regimented or overt. perhaps we sit down quarterly and review finances and discuss it with them? who knows what that will look like, but it will probably be different than now.

    …and i will probably still be able to use our parents are examples of what not to do (unfortunately).

  8. WiseGuy Says:

    One of the biggest things my parents have taught is that money is the means, and not the end. I do not want to be ‘very rich’, but I want to have enough to do everything I want in life.

    My parents avoided getting into financial debt. Even when they took loans (for house/car), they ensured that their future income would well cover the installments that were generated. Very valuable, I must say. I do not use a credit card. I tend to use a debit card for spending, which means that I will never overspend, because I simply can’t.

    My parents have helped others financially, but they know that it is most likely to wedge the relationship they share. So, they make sure that they are giving the money only for good reasons, and they give it with almost-zero expectation of getting it back. I used to feel why my parents were like this, but looking at what they are today, they are still doing much better than quite a few of our relatives. And they are happy.

    My parents used to take us out for different outings when we were children. One time, my mother took me and my bro to the city zoo. We bought entry tickets, looked at the cages, and had a fun time in the park. When we came out of the zoo, we stopped for some refreshments at an eatery near the zoo gate. Once we were done, my mother looked for her purse to pay. That’s when we realized that some thief had stolen the purse at some time during our zoo trip. My mother had no money left – to pay the bill or pay for the rickshaw to take us home. A young couple sitting next to us, enquired what happened and paid our bill of the refreshments. My mother took a rickshaw home, and that fellow was paid after we reached home. My lesson? Never put all your money in one place. I still remember that lesson too well.

    What my parents did not teach me? There was no concept of pocket money. We (me/bro) did not get a fixed amount of money to use every week/month, and we usually asked for as much as we needed for some purpose. So, basically I still have issues about pre-empting how much I need to spend from whatever I have withdrawn from my account.

  9. I’m not sure you can know how much this post means to me, especially since I am always a little wary that my views on money and children could be perceived as “mean!” (that’s what my children tell me.)

    My parents did teach me, early on, about tradeoffs: “If you have this now then you can’t have that later. Is it worth it to you?” And I read in a book once (“Your Money or Your Life”) that money is just a store of energy. It takes your energy (and talent and skills) to earn $$ and then you take it out of storage when you spend it. Was that $16 purse worth 8 weeks of allowance (emptying the trash, setting the table) to Tessa?

    Finally, one thing my parents DIDN’T teach us but that I want to teach my kids is bill-paying. How I pay bills for various things each month and how we always need to have $$ in storage to pay them, no matter what. About how having $$ in storage — delaying gratification — gives a person a certain freedom and peace of mind.

    It made me sad when I read that you got your wish with your mom :-(. I wonder what makes some people innately able to delay gratification and others not?

    Thank you for this, Cassandra.

  10. Cat Says:

    The delaying gratification lesson would have been nice. The rule was that we were supposed to put half of any and all money we received or earned into savings and could spend the rest on whatever we wanted. The reality was that I took all my babysitting money to the mall and bought useless crap.

    Getting a job and paying my own way snapped me out of it for the most part. If I didn’t have the money to pay the bills, something bad would happen. Getting married helped, too, since then it wasn’t MY money, it was OUR money and DH and I were accountable to each other. We made small purchases on our own, but anything more than a couple hundred dollars required discussion and concensus.

    Now my impulse buys are things like potato chips and ice cream at the grocery (because I never go anywhere else!). For that I assign partial blame to the absolute restriction of those items from our house while growing up with a dietician for a mother. She always said everything in moderation, but it never applied to chips or ice cream!

  11. jill Says:

    This is something I’ve thought about a lot in the past. My family kept money a secret. Growing up I always thought we were fine, not rich, not poor. We didn’t go without anything. I never really felt “deprived” of anything. However, now that I am an adult I realize my parents raised 3 children on very little money. They both always worked but in jobs that were fairly low paying. We always had total junker cars, we very rarely went out to eat, etc. They did a wonderful job managing us 3 on the budget they must have had.

    Having said all that, I had no idea, they never talked to us about money. I wish they had been more open about everything with us – allowed us to see how they balanced their checkbook and paid their bills – I think it would have been a great learning experience, even if they didn’t share every little detail.

  12. They taught me to be very responsible with money and not to take any risks, spend what you need, sometimes buy something nice, and try to save. DH is more into stocks than savings, and that scares me a bit, but I wish my family had taught me a bit more in that way, so I would feel comfortable in investing in the stock market AND saving and making the most out of both. Now we do invest, but DH has no time to be on top of it and I feel unsure with it, so we don’t take enough advantage of it.

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