Show me the money!
Ok, enough talk about disease. Yech, so depressing. Let's talk about something everybody loves-MONEY!
The other day, while sitting around at the bank, waiting for DH to finish up working out our new mortgage stuff and trying to keep my child from destroying everything in sight out of frustration and boredom (really, banks do nothing for 4 year olds), I came across the book _Rich Dad, Poor Dad_. Now, this was a particularly swanky bank, as banks go, and they had a little sitting area with some books on a shelf, obviously for your perusement. (Is that a word? It sounds like a cross between "amusement" and "peruse", and I think I just made it up. Oh well. I'm gonna let it slide. I guess I could go one step farther and say "Perusement amusement," but then I would be really outside the lines of appropriate grammar, and the grammar police would surely show up and beat me with their danglng participles.) And really, how many banks do you know have little sitting areas with a small library? All they needed was a basket of fruit and some Caribean music piped in, and I would be hard pressed to say whether we were at a financial institution, or some tropical island resort!
Well, ok, not really, because the whole, "Welcome to Bank Of America, can I help you?" mantra that was repeated loudly every 3 minutes by the teller working the drive up sort of burst the fanstasy, but regardless, I just thought comfy chairs were fairly awesome when you are tired of life matters in general and just need a place to put your feet up while you watch as your child slowly melts down after days of househunting and boring meetings and starts hucking complimentary bank mints across the lobby. Good times, I tell you, good times.
Ok, so in the midst of this blissful luxury, like I said, I came across this Dad book, and it's all about money. I didn't have much time to be perusally amused, having to dodge flying confections, as it were, but there were a couple of points that I caught in between mint missiles.
Point number 1: The traditional lessons our generation was taught about money, education, etc, do not apply to our children's generation. No longer is a college education worth what it once was, and it is no guarantee to financial security in the future. I'm not sure I totally buy this one, but it's something to think about.
Point number 2: Even if they did apply, our generation is woefully inept and neglectful in teaching our children how to properly manage money, leaving out serious basic info like "How to manage a credit card". Credit is so vital in today's financial world, people need to understand how it works. Given how much debt America is in, I could totally buy this one.
Point number 3: Most people often say this about things they want but think they can't have: "We can't afford it". The author says a much better way of approaching life and managing money is not to limit yourself with this statement, but rather to substitute it with the thought, "HOW can I afford what I want?" That way, you start to think creatively about money, and you make your money work for you, instead of working for your money. I LOVE this idea of changing your thinking from, "We can't afford it" to "HOW can we afford it?" I haven't totally applied this yet, but it's definitely something that is sort of ruminating in the back of my mind these days. Especially since after my little taste of tropical island resort I got back at that bank, I've had a good hankering for the real thing.
In all my reading about parenting, what we have to teach our kids, etc, etc, really, I'm not sure I've ever come across one that says that you should have serious talks with your children about money. And when DH and I talked about it, we realized that really, neither one of our parents did much in the way of educating us, beyond the whole, "A credit card does not mean you get things for free". Both my sister and I got into some minor financial trouble out of complete ignorance. I'd like to say I was a bit more with it--my trouble had to do with not understanding taxes, hers had to do with not understanding that an ATM will still give you money if you have overdraft protection even though you really don't have a cent in your checking account. Still, the problems could have been solved by some simple financial lessons from our father, who, ironically, is an extremely savvy businessman who has an excellent understanding of how the financial world works.
So I ask you, did your family teach you about money? What are some basic traditional lessons that you learned that you think will not apply to our children's generation? Any ideas about how to introduce these lessons, and how to make them effective?
And most importantly-anybody know how I can get to Hawaii, cheap, and which tropical resort is the best?
posted by Heather O. at 6/28/2006 09:41:00 AM
13 Comments:
I love that book, my dad lent it to me and I've gotten most of the way through it (not all the way through since kids are so darn demanding!!! Darn that whole eating thing! just kidding of course.) I agree with all of his points, the whole thing about education not being worth what it once was strikes a cord with me. When I think about it, college helps, but doesn't insure that you will have a good income. They teach you all about the "rules" and seldom reward thinking outside the box and creative ideas. Especially those professors that just want you to regurgitate how they think on their subject.
About being taught about money, I was never taught anything in public school except how to balance a checkbook. My father-in-law is an excellent investor in the stock market and knows all about things such as IRA's. Does me husband, not a chance. We didn't even know the vauge meaning of and IRA or what they did till after we were married. I wish someone would give me a crash course in investing, so that I can have some cash coming in monthly that doesn't involve relying on someones elses idea of what you a worth as a worker! aka that whole Job thing. and so that I wouldn't have to worry about retirement as much... and here I am only 26 and worried about how I am going to support myself and my hubby when we retire. Sigh.
Needless to say, I would love to know how to have my "money working for me" rather than me working for it!
My parents taught me two things about money 1.) Credit cards are the devil and 2.) Loans are a necessary evil, but you only use them to buy houses and cars.
I had huge moral issues after I got married, and my husband and I were going to school and we had to get student loans to make it through college. Luckily, my husband knew how debt worked, and how you need to have good credit at some point in your life. I attribute his knowledge to the fact that his parents had so much trouble with debt in their lives. He knew how it worked from listening to his stressed out parents trying to figure out where the next mortgage payment is coming from (not that that's a good way to teach your kids).
We've talked about we want our kids to learn from experience. Get a job to make money. Apply for a car loan when they need a car. Get them a credit card that they are responsible for. Now I'm sure that we will have issues with missed payments and over extension of their accounts, but I think it is better for them to learn those lessons with mom and dad as "training wheels" rather than when they get out into the real world on their own. I think I need to clarify "training wheels." I mean while we are still looking over their shoulders and can still control at least part of their lives. I do not in anyway plan to take away their natural consequences, just hopefully, stop them before they get into too much trouble. Of course I don't have old enough kids yet to really know what I'm talking about . . .
I don't know practically anything about the whole financial world. I am learning though, being on my own. My mom didn't really teach me anything. I got a credit card and didn't use it for six months until I needed to buy my books for the next semester. Then, I couldn't stop! I need to pay off that and then paying off my student loans since I'll be finished with school in six months. I'd like to get a head start on that, you know? However, I did sign up for a Personal Finance class for my last semester of college. (It probably would have been better to take my first semester but oh, well.) I am excited about it because then I will know exactly how and why I am screwed. Haha
DH has read that book - my Dad tends to give him books like that all the time. My Dad, however, doesn't give the books to his daughters. I gave him an earful once aboug that.
My dad's philosophies in life (he's a successful businessperson) are "Cheap is good, free is better" and "I don't worry about the price of meat going up, as long as I'm making more money and I can pay for it." He also has total control of family finances and gives my mom an 'allowance.'
My parents instilled in me a fear of abusing money. My Dad constantly tells us we don't make enough to live comfortably (we probably don't) with a baby on the way. Somehow DH inherited the same fear. I don't know as that I keep a balanced checkbook, but mentally I'm acutely aware of how much is in the bank and I panic when the balance drops below a certain amount. (Huzzah for online banking!) I'm scared of my credit card. We have IRA's (which we cleaned out to buy our first home) and we've invested in my father-in-law's company and make a (very) little on the side. But taxes? I get heartburn just thinking about them, literally I get physically ill. I have no idea how they work. Our retirement plan? Eventually someone's gonna die...and leave us loads of cash (we hope.) Probably not the best plan.
So yes, my parents taught me about money. I learned FEAR.
And here's a way to get to Hawaii - DH is in the video production field. He spent 5 days at the Ritz Carlton in Maui a few weeks ago working. So the answer is get a job that takes you to Hawaii - you get paid and put up in a swanky hotel. The only drawback is that you have to work the whole time.
May I suggest two books that deal with financial situations facing most of America today? Nobody's even paying me to say this, I just think these books (both by the same authors) provide sound advice for the very real situations facing families. The first one is called "The Two-Income Trap", which explains why people are in the dire financial straits today. The second is "All Your Worth" which explains how to get out of said dire financial straits. I have not implemented everything that these books say, but I've done some mulling, and plans are in the works. Also, it's just very interesting reading if your even the tiniest bit interested in economics.
Something happened when I was a child that caused my father to lose his job, my parents to go into quite a bit of debt and eventually bankrupt. I don't remember having a sit down with them, but I learned somewhere that credit cards are to be used and pay off - unless an emergency. Making the minimum payment is not going to cut it.
Balancing the checkbook is a give and take - sometimes I'm right on and other times...not so much. But I have learned that most the time it's my fault and if I don't see anything totally out of whack from the bank I go with their numbers.
My SIL is an accountant and my source for money advice. I put 5% of my check into a 401k at work, and hope DH gets on with a fire dept so we have a nice retirement plan someday (assuming the cities still have money). We spend more than we should, but are working on curbing that as well. Self-discipline is the killer for us...and that goes way beyond money.
I've not read that book but my DH has. He loves it. My parents taught be about check books and I got a job and a bank account when I was 16. My mom also FORBADE me to get any kind of credit card. I'm not sure that was the best way to handle it, because I still got the little dept store ones that gave you 10% off if you applied. I never used them after that first time though. And it really did help me because I never got my first REAL card until I was 25 and married. I think that has really helped me understand the value of money. Now we use our credit card for all our purchases but only because it gives us rewards. WE pay it off EVERY month. I'm not sure I would have been as responsible with it had I not waited so long to get one.
I talk about money with my kids ALL the time. I think my parents did a great job of teaching me and I'd like to pass on the favor.
Right now they are 8,6, & 2.
I talk to them about:
1. Needs vs. wants - we have enough for needs, but we can only buy some wants.
2. Saving each part of a paycheck for emergencies.
3. Don't spend money you don't have. Don't go into debt. My dd at age six told me that there was a phone number on tv to give us $25,000. I explained about interest and having to give them back $40,000 or more, so is it really a good deal?
4. I explain about Daddy working so that we have enough money for everything we need.
5. We give away old stuff to help my kids realize that things are just things, and someone else might need it so we're happy if they can use it.
6. Allowance so they can pay tithing 10% and save for college 10% (INGdirect savings pays 4.25% interest so they get to watch it accumulate.)
I absolutely LOVE budgeting, finances, mortgages, taxes, investments, IRAs, 401Ks, etc. I could talk about it all day long. Unfortunately, it is kind of taboo, so I feel like I can't share my knowledge with friends.
I wish I knew how to talk to children about money issues. When I was growing up, my parents NEVER talked about money. I know now that there were months when there wasn't enough to go around, but how was I to learn from that as a child when the subject was never mentioned?
So, where is the balance between saying too much and not saying enough about your financial situation? You don't want your 5 year old discussing your monthly income and expenses in Primary, but you want to help them begin to learn about money and that it doesn't grow on trees!
I'm a soon-to-be dad, so I have a while before I have to decide what to do, but I find the question perplexing. How do you prepare your children for the real financial world, and how much should you tell them about it?
My parents, especially my dad, talked to me a lot about finances. They never told me just how much they made or how much big things like student loans, martgages, inheiretance, etc. were, but if I had questions about credit cards, loans, taxes, or things like that they were always willing to talk to me. My dad didn't grow up with a lot of money, but my mom did so we've had some discussions about how they adjusted when they got married.
In college I took a family finance class and learned a lot. One of the books we read was The Wealthy Barber. It was kinda dorky the way it was put together, but had a lot of information. I was also told about a book, but have yet to read it, called the Millionaire Next Door. It was written because of some research that was done on the wealthiest people in America and what they did to become so, and how they aren't really who you'd expect, for instance, your next door neighbor.
I have to agree with the need to have good credit and use credit cards. My hubby's parents never went into debt for anything. Literally. They don't have credit cards, loans or anything. When they bought anything (house included) they paid for it right out of their bank account. It seemed like a good idea, but now because of it they have no credit records and it's come back to bite them in the butt. They are 62 and 72 years old and can't qualify for anything because of it. Because of their situation DH and I (as well as the rest of his siblings) have worked hard to have good credit. We use our credit cards all the time and pay them off every month. We work hard for it because it really can make or break a situation.
One more thing. An interesting story. My BIL and his family recently bought a home. When he went to the bank to get a loan he asked for a certin amount and the loan officer told him because of his credit he qualified for a loan at least twice what he was asking for. He said "no thanks, I'll just take what I asked for," and the loan officer was floored. He said everyone he's seen always wants the biggest amount possible and hardly qualify for it. Now my BIL is someone who qualifies and he's not biting. Kinda makes me think maybe that's why he's so qualified for the larger amount. He's responsible enough to know what he needs and leave the rest.
I don't use numbers. If my kids ask me how much money we have in the bank, I tell them its my job to manage the money, they and we have enough. My 6 yr old son just asked if Daddy makes coins at work or dollars. I told him dollars. But didn't tell him how many dollars. I just said that he makes enough to pay for everything we buy.
I tell them general things. Kids can get confused. If you tell them no we don't have enough money for that candy or that toy, they might think you don't have enough money for food. I don't think you should fight about money in a marriage. You really need to work together for the good fo the family. If they overhear something the parents say about not having enough money, kids could get really worried. So I think it is important to tell kids that the parents are taking care of everything and financially things will be fine. But they can also help be wise about money...like turning off lights, not wasting or breaking things, etc.
I always say that we have enough for everything that we need like food and lights, etc. But that we don't have enough to go buy anything we want. I say we try to be careful with our money. I try to help them realize that it is a resource to be careful about.
They won't have a clear idea about so many things yet. It takes years. Recently my daughter thought our car must have been really expensive, like $100.
The younger they are, the more general you should keep the rules, as well as how it applies to their life. When my kids ask to go out to eat, I let them know that it costs money and we don't have enough money to go out to eat all the time, just sometimes.
So my kids have been growing up with the idea that money can buy fun, be you have to ration it. Also, I tell them that we want to be careful with money in case our car breaks down and needs to be fixed (emergency that they can understand) or other emergencies.
So at this age they may not know how credit works or what mortgage insurance is, but they understand that someone has to work to earn the money, money is for needs first, you save for emergencies, and you carefully spend the rest on stuff that you want.
I first read this as "show me the mommy!"
It is good for kids to learn limits, makes them healthier.
I'm terrified of money things. I'm kind of an ostrich about it. Hate it. Wish it wasn't so scary.
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