Teaching the next generation to save $ and not feel entitled.

[Ohdanigirl]

First, please let me say, this is not a jab in any way at assistance programs. I know people call them entitlements, but I am referring more to the attitude some people have that they deserve/have to have things they can't afford. I know how heated those debates get. I am not trying to do that. I am being very sincere.

 

Now for my question. What can we as parents do to help our children grow-up into financially responsible adults? How can we bring home the difference between needs and wants?

 

Why am I asking? Well...

 

Dh and I started a family when we were only 18 and 19 years old. We were so poor that some times all we ate were beans and bread, but at least we ate. Being young, we did make dumb decisions here and there. For the most part we grew out of that. Dh came from a very poor background. Where as I, not so much. Yet, I am the one that is most likely to put a stop to spending. I am willing to do with out. Bills and food are first. I will cook fresh food instead of eating out. Dh has come around.

 

His siblings, on the other hand, are the complete opposite. They cash there checks and spend them before the next one. They eat out all the time. They never have savings and often run to us when they need money because they mismanaged something. Often times they are asking to borrow money while showing us their new T.V. for their car.:confused:

 

We have done the math, and they should have more money left after bills than we do. They should have saving! We have our 4 ds, dsd, and BIL. This is 3 times the amount of people to support than any of them. Our house payment is twice what any of them pay. Plus we just finished our car payments last month. We pay everything else in cash, and do not use credit.

 

When we have spoken about it as a family, it seems that they feel they should have as nice a life as everyone else. Not sure who everyone else is. So how do you get such different outcomes? Strangely, I would think that the woman who was always used to very nice things (me) would be the spend thrift. I am a total tight wad, yet I feel I have something to show for it. I assumed that they would know how to stretch a dollar, but they really don't. Neither does my MIL. Dh says money was like water. He remembers shopping sprees on the first and having no money the rest of the month. I am worried my children will get the wrong idea over time.

 

Is it a generational thing that s simply growing? Is there no hope? What say you?

 

Danielle

[Aelwydd]

Your post contains several different thought processes, and I'm sure others will be able to address them better than me.

 

I will only tell you what a wise friend has often said: Don't compare your insides to other people's outsides.

 

It's easy to feel inadequate when looking at what appears to be someone else's good fortune. But, we never really understand their situation completely, because we can't get into their heads and know all their reasons, foibles, and problems.

 

I think people would be a lot happier if they focused on examining whatever they feel "entitled" to in their own lives, rather than always pointing the finger at what they perceive to be others' excesses and entitlement behavior. It's a very sad society, indeed, when people who are unhappy with their lot look to blame those poorer than themselves.

[Rosie_0801]

Talk about it, I suppose. That's what my parents did, and we are all fairly sensible with money. But perhaps I don't have the right perspective for this conversation because I'm not American. :)

 

Rosie

[Skadi]

I don't think what you describe is anything new for the lower and lower middle class in America. I grew up in that environment, and everyone I knew did, as well. Most of America's lower classes are, by a more global definition, extremely wealthy anyway, and I think this plays a role in this conversation, because we're talking about people who are not truly destitute for a start, which changes their motivations. Without a doubt, they could be wealthier if they didn't spend more than they take in, but that's not likely to happen on a large scale any time soon. The thing is, I don't think this attitude of living beyond one's means is unique to poorer people -- according to this site, the average American only saves 6% of their annual income. And this study found that 50% of Americans could not come up with $2000 cash in case of an emergency. Never in history have we been so rich, and yet so poor.

 

Our family's income is below the U.S. poverty line, but we save between 50 - 70% of our earnings and have about $10,000 in savings. Compare this to my parents, who make $80,000 annually and only have the bank's bare minimum in their checking and savings accounts at any given time. They can't pay cash for anything, and they aren't exactly sure how much debt they even have, but you can bet that they have a constant flow of new appliances, furniture, cars, televisions, etc. It reminds me of this comic. Can you spot the guy with the highest net worth?

 

 

The main teaching tools we think are important are real life lessons and Dave Ramsey's materials. Here's a list of his books for kids under 12, and here is his curriculum for teens. In terms of life lessons, I just mean that we believe it's important to teach kids about money from a young age. They earn money through work (just like adults must do) via chores and as soon as they're old enough, their own businesses (mowing lawns, babysitting, etc.), we award them for saving by giving them an interest rate like they would get in a high yield savings account, we encourage goal setting ("I want to buy X Toy by August, so I must save Y weekly to do it") with small extra rewards for meeting those goals...stuff like that.

Edited June 3, 2011 by Skadi

[Plink]

I try to give my kids the ability to see their money. From a young age they each have a very basic paper ledger in which we track their income and expenses. They can see how much they tithed over the past year, how much they received as gifts, what they earned changing lightbulbs, etc.

 

In our house noone is allowed to impulse spend (including mom). When the kids see something they like I don't discourage them from getting it, but instead encourage them to shop around for a better price. Usually by the time they get home the fascination has shifted. I try to be available to help them if they are truly committed to getting something. We work together to find good quality, low price, and reliable vendors. Treats like ice cream cones are part of our vacation budget and they know this.

 

On more thing, our kids are required to save "for old age." They put a certain percent of everything they earn into savings and can not touch it. We as parents do the same. They come with us to meetings with our accountant and investment advisor and are allowed to look at any and all of our financial documents.

[Joyofsixreboot]

I think like many behaviors it's influenced by your surroundings but not ruled by them. I come from a long line of frugality so it never occurred to me to spend. Kids learn from what you say but mostly from what you do. I also think a generous use of NO is good. Not, no not ever but no, not right now or no, we don't really need that or no, that doesn't fit our family's values.

[nono]

We model it. My kids here us discuss regularly what is "in our budget" and what is not. They want to go to Disney World. We make daily decisions to trim extra cash, and put it towards taking that trip. They see me pay for everything in cash, so they get that food, gas, etc. costs money. They are walking more around town and not asking to be driven. Because at almost $4 a gallon, heck, that's real savings towards WDW! LOL

 

I think having the shared family goal with the big payoff at the end is really reinforcing. They are going to own that trip like no other! :D And eventually, it's just part of their lifestyle. Save, then spend. Not spend, then pay, and pay.

[ChrissySC]

We give allowances. This helps the children to decide where to spend money. I encourage them to make a list and prioritize that list. Now, for the 4yo she may want a puzzle or need paper to draw. She must choose one. I do not allow impulse buying. If it is something new, they add it to their list. They look at the list before they leave and have items in mind of the things they need or want.

 

I think that this has been the best way to teach them to save and wait for purchases. The buyer's patience is what needs to be taught.

 

The girls help me clip coupons and search the sale papers. We look for the items that are on sale and have a coupon. If they want pop tarts, I ask for a coupon(s) and for them to find the sale. I buy several boxes. They learn to portion the food too. By this, I mean that they do not eat all of the boxes of pop tarts the first week. (I hope they don't. Sometimes I buy 10 boxes!) You should see the arguements over the grocery sale papers that come in the mail. Both DD10 and 4 argue who gets it first!

 

DD10 will be starting a savings account. I am putting the first 50 in her account. She will be required to take 1/5 of her allowance or earned money and place in the account. She knows that this is money for emergencies and planned purchases, which does not include mom's 50 of course. LOL

 

Just chatting ....

 

I grew up not wanting for anything. My mom was a teacher and my dad a nuclear engineer. I was taught this same way. I too made mistakes when we first started a family. However, I am careful to live with very little credit. My cars are paid. My house will be mine in 12 years. We keep a couple of credit cards. With recent house repairs and purchases, they added up, but they are easily paid off within the year or two without any effect on our standard of living. (We are redoing the house after 15 years.)

 

I think the hardest lesson for me was learning to be comfortable in my own income. Teach the kids to be happy for others when they buy new items or have great vacations. Those people may have saved for the purchase and trip. My DD10 remarked about her friend's new toy ... "That must have taken a lot of allowances, but it is so pretty." I think I did OK. :)

[brasilmom]

One thing I do very differently with my own kids that my parents never did is be very open about money. I never knew how much my father made or if my parents could afford this or that. I don't do this with the thought of making my kids feel like they aren't entitled, but I just want them to learn how money works.

 

I still have a hard time with this thought because while I don't think I feel entitled per se, I think every human deserves some basic things. Not that I think they should all be dumped in our lap for free no matter what, but I still think there needs to be a minimal level of human dignity. I get the impression that some people in this country only agree to help poor people so they don't have to look at them laying on the street, but beyond that don't particularly care and blame them for their situation. They are poor because they just didn't work hard enough or oh well that's tough luck for them. I just don't buy into that line of thinking.

In our home we created a budget and also a financial system where all participates by contributing with their share of work to run the house. So, my 5yo dd has a chart that she follows daily and gets point for it which are then converted in cash at the end of the week. She is learning to have delayed compensation, how to spend her money and once she has accumulated a good amount she will then be introduced to the savings for college and old age. I also make sure she sees us doing the same thing. We o grocery shopping together, look for sales, match with coupons, work hard on getting good prices for our food, personal higine items, cleaning supplies, etc.

For me, the most important thing is to pay no heed to what others are doing. It is none of our business and I am not paying their bills either. So, I mind my own business and have our family going that way. When dd says she wants something I remind her that it is up to her to earn the money so she can spend. No further "asking for" comes from that reply.

In all, look at your own situation, get a system that will work for your family and forget about the others. Set examples, talk openly about, do whatever is best for the good of your family.

Oh, and I love the phrase: "Don't compare your insides to other people's outsides."

Be well

Miriam

[ChrissySC]

One thing I do very differently with my own kids that my parents never did is be very open about money. I never knew how much my father made or if my parents could afford this or that. I don't do this with the thought of making my kids feel like they aren't entitled, but I just want them to learn how money works.

 

I still have a hard time with this thought because while I don't think I feel entitled per se, I think every human deserves some basic things. Not that I think they should all be dumped in our lap for free no matter what, but I still think there needs to be a minimal level of human dignity. I get the impression that some people in this country only agree to help poor people so they don't have to look at them laying on the street, but beyond that don't particularly care and blame them for their situation. They are poor because they just didn't work hard enough or oh well that's tough luck for them. I just don't buy into that line of thinking.

 

:iagree:

 

I look at assistance as a means of balancing to some extent. I suppose that sounds a little communistic, but that is not what I mean.

 

Someone has to dig the ditch for water to drain from the roads. It does not require a college education. He will not make 50k a year doing this. I choose to work with computers. I need the ditch. He needs the income. What is wrong with allowing for assistance in this case?

 

I pay taxes which supports a military that keeps my home safe (not for aguement LOL), and I suppose I see similar support or compensation along that same line.

 

Other than, of course, the application to receive assistance requires you to be starving and often not employed in our state. :glare:

[amy g.]

I agree that modeling is the very most important thing. Dh grew up in a large family and lived very frugally. they drank powdered milk, and his mother makes a tomato last for 3 meals.

 

Her mother inherited some money when her husband died, and did not want to have to spend it all to go into a nursing home someday in order to have that care paid for by the government, so she gave my MIL the money over the years.

 

My MIL COMPLETELY disagreed with this, and even after her mother died, she would not touch that money. Then her brother died and left all of his money to her. She just continued living off of 1/2 of her SS check and banking the other half, and volunteering at the food kitchen and the hospital every week.

 

My parents bought everything they wanted, and were always behind and hiding from creditors. It was movies and restaurants every weekend, shopping for recreation, and never keeping anything in the bank.

 

When Dh and I were first married, my mom would call and say, "I need $600." If I didn't send it to her, she would throw a fit until I did. Then she complained to relatives that we were to blame for her financial problems. My aunt finally told her that some people always seem to make the best of any situation, and some people have money problems no matter what happens."

 

Dh and I are on the same page about money. We agree about investing in our children, paying cash, and saving for the future. Within those guidelines, he cares much more than I do about having nice things.

 

I would buy the kids clothes at Goodwill. He would by them designer clothes. I've realized that part of this is tied to his growing up doing without. He feels like he paid his dues, and doesn't ever want his children to have to feel like he did. In the end, our differences probably make for a perfect balance.

 

My kids are very responsible financially. Ds pays for things himself, even when we offer to buy them for him. My oldest never spends any of her money. She is in Dallas, this week picking out some new goats for her herd. I offered to buy her more, and of course the seller was encouraging this, but she said, "No, I think just these 2 are all I really need."

 

I trust them with money. I think they make really sound choices.

[Desert Rat]

We are coming out of a 16 month layoff. Money was always a dominant subject in our home for many months. The boys have picked up on this.

We were always savers. We always joke that dh is Jewish and I'm Scottish, both nationalities known for penny pinching) and together we can't spend anything. This time it worked to our advantage. We had enough savings that with the monetary help of a grandfather, we were able to stay out of debt and the the layoff didn't ruin us.

With this said, our boys came away from this time with a deep understanding of the importance to save, the difference between a want and a need, and budgeting.

They were not deprived. We didn't eat out but they still got ice cream at the store. We didn't vacation or go to any places that required admission prices but we still had our annual passes to museums and we did a lot of hiking and free stuff.

So, they've learned by our example. Both boys have started savings accounts in the last 6 months. When asked what he was saving for, my ds11 says retirement. He not kidding. I don't know if that will change over the years but he puts half of his earnings in the bank. Then he buys pokemon cards with the rest. :) He does extra chores with my brother to earn money.

My little man says he's saving for college. He really wants to be a biologist. It's a good goal.

I guess what I'm saying is that kids learn by watching. We explain things in age appropriate ways and they learn and mimic.

[twoforjoy]

In defense of young people today: they are in a REALLY tough economic situation, certainly tougher than we or our parents were in.

 

They are coming out of college saddled with a lot of student loan debt, and there simply aren't jobs out there for them, particularly not jobs that pay enough to allow them to be financially independent.

 

So I think we need to worry less about how to stop young people from feeling "entitled" and more about how to change things so that they have a real chance. Right now, many of them don't, and we blame them instead of the economic forces that have made things nearly impossible for them.

[Joker]

We model it. My kids here us discuss regularly what is "in our budget" and what is not. They want to go to Disney World. We make daily decisions to trim extra cash, and put it towards taking that trip. They see me pay for everything in cash, so they get that food, gas, etc. costs money. They are walking more around town and not asking to be driven. Because at almost $4 a gallon, heck, that's real savings towards WDW! LOL

 

I think having the shared family goal with the big payoff at the end is really reinforcing. They are going to own that trip like no other! :D And eventually, it's just part of their lifestyle. Save, then spend. Not spend, then pay, and pay.

 

:iagree:This is basically what we do. My older dd actually keeps her eyes open for cheap gas and will tell me where to go when its time to fill up.:tongue_smilie: I've never asked her to do that but she just does. Both dds help me shop for groceries and know how to compare prices and choose the better bargain and when to pass on something because its too expensive. We also give an allowance and they've been good at saving for the things they really want and its helped them see how much things really cost. We basically just talk a lot about it and model the behavior we want them to have.

[Joanne]

Dh and I started a family when we were only 18 and 19 years old. We were so poor that some times all we ate were beans and bread, but at least we ate. Being young, we did make dumb decisions here and there. For the most part we grew out of that. Dh came from a very poor background. Where as I, not so much. Yet, I am the one that is most likely to put a stop to spending. I am willing to do with out. Bills and food are first. I will cook fresh food instead of eating out. Dh has come around.

 

His siblings, on the other hand, are the complete opposite. They cash there checks and spend them before the next one. They eat out all the time. They never have savings and often run to us when they need money because they mismanaged something. Often times they are asking to borrow money while showing us their new T.V. for their car.:confused:

 

We have done the math, and they should have more money left after bills than we do. They should have saving! We have our 4 ds, dsd, and BIL. This is 3 times the amount of people to support than any of them. Our house payment is twice what any of them pay. Plus we just finished our car payments last month. We pay everything else in cash, and do not use credit.

 

When we have spoken about it as a family, it seems that they feel they should have as nice a life as everyone else. Not sure who everyone else is. So how do you get such different outcomes? Strangely, I would think that the woman who was always used to very nice things (me) would be the spend thrift. I am a total tight wad, yet I feel I have something to show for it. I assumed that they would know how to stretch a dollar, but they really don't. Neither does my MIL. Dh says money was like water. He remembers shopping sprees on the first and having no money the rest of the month. I am worried my children will get the wrong idea over time.

 

Is it a generational thing that s simply growing? Is there no hope? What say you?

 

Danielle

 

There is a psychological pattern/dynamic that develops in very poor circumstances. If this thinking and behavioral pattern is not addressed (often professionally), it's common for people from poor backgrounds to behave exactly as your DH's siblings.

[twoforjoy]

My whole life was a tough economic situation. As an adult I have fared much better. So to say the situation is tougher today isn't entirely accurate from my point of view.

 

That's anecdotal, though. If we look at things like the amount of debt students are leaving college with, and the jobs that are available to them and what they pay, and the cost of living, they are in a tougher situation.

 

Just as an example, when my parents left college, they got jobs making almost the same (and this isn't adjusting for inflation) as my DH and I did when we graduated college 30 years later. My father's first job paid $15K; my DH's first job paid $18K. My father went to a private college, paid for it through loans, and had about $10K in student loan debt upon graduation; my husband went to a public university and had $60K in student loan debt upon graduation. My parents' house, when they bought it, cost $30K; 35 years later, it sold for $300K.

 

Have we always made the best economic choices? No. But, that doesn't negate the fact that we were in a much more difficult situation economically than our parents were in, even though we had nearly identical circumstances, because of how things had moved economically over the last 30 years.

 

And that isn't unusual; in fact, things are even worse for kids coming out today. Their student loan debt is even deeper, and wages haven't risen.

[brightside]

Here is what we are trying with our 13 year old son. We are desperate to teach him the value of money because both sets of grandparents are very fiscally irresponsible and my dh and I have had to learn about money the very hard way (and we still struggle).

 

 

He gets $100 per month on a debit card. He is responsible for purchasing/maintaining his clothes, toiletries, activities dues and social activity expenses.

 

I do pay for meals out, if we are planning to eat out, but if we are out running errands and he just "wants some food", he has to pay for that as well.

 

I pay for classes that I deem necessary, however if he wants to continue his voice lessons, I am requiring that he pay 1/2 the costs (due to his lack of practicing when we were doing lessons previously).

 

We also live in a very large community and he has started a lawn mowing business for extra cash. He learned early in the season he could make a lot of money very quickly and he blew through it like water(no savings). The heat has came and now he is having a hard time getting out there and he dropped the deck on the mower to the lowest point to avoid mowing so often and killed a lot of grass. He is now learning to deal with mad customers and working when he doesn't "feel like it" and fixing his mistakes and his source of income is drying up with the grass.

 

Will this work long term? I do not know. He is more frugal than his friends, he will shop around when he wants/needs something.

[Night Elf]

No one has brought up advertising yet. That is a HUGE factor in debt, IMHO. Consumers are bombarded every day, everywhere. Things that are new, shiny, make life easier, make you look good, raise your self-esteem and self-confidence, make you appealing to the opposite gender, live like a king/queen, etc.

 

I've taught my children to not take commercials and advertisements at face value. They scrutinize the ad, looking for the things that make the product appealing to the masses. A quick example is the Swiffer company's ads. They show young, neatly dressed ladies cleaning an already clean home that is uncluttered and decorated like a magazine photo. It gives the impression that their product is so awesome that their house will look like that. They don't have to say it specifically. Visuals count for alot. That leads them to question the necessity of some products. FWIW, I do buy Swiffer dusters. I like them better than using a rag. But if I had to save money, that is one of the luxuries I would drop. And they know that. I'm hoping to teach them to be consumer wise, I guess.

[Mejane]

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Edited June 7, 2011 by Mejane

[Joanne]

No one has brought up advertising yet. That is a HUGE factor in debt, IMHO. Consumers are bombarded every day, everywhere. Things that are new, shiny, make life easier, make you look good, raise your self-esteem and self-confidence, make you appealing to the opposite gender, live like a king/queen, etc.

 

I've taught my children to not take commercials and advertisements at face value. They scrutinize the ad, looking for the things that make the product appealing to the masses. A quick example is the Swiffer company's ads. They show young, neatly dressed ladies cleaning an already clean home that is uncluttered and decorated like a magazine photo. It gives the impression that their product is so awesome that their house will look like that. They don't have to say it specifically. Visuals count for alot. That leads them to question the necessity of some products. FWIW, I do buy Swiffer dusters. I like them better than using a rag. But if I had to save money, that is one of the luxuries I would drop. And they know that. I'm hoping to teach them to be consumer wise, I guess.

 

I taught personal finance to my seniors in my teaching job as the last portion of Economics. We covered a lot of the above. It was a great segment.

[justamouse]

Honestly? The effects of being poor are a wretched familial inheritance.

 

How do you change it?

 

Education.

[jec3113]

We used to give allowances and discovered that it created a sense of entitlement with the kids. We have a new plan in place now. I made a list of chores and what each chore pays. The kids can work as much or little as they chose. Each childs room is a "freebie", it must be cleaned without pay b/c it is your room. Anything else is a paying job. I also stopped paying for for things like Sonic drinks, snacks at the skating rink, etc. Toys and treats come out of their pocket. If you don't work then you don't have money. So far this system is working much better than just giving an allowance.

[Ohdanigirl]

Talk about it, I suppose. That's what my parents did, and we are all fairly sensible with money. But perhaps I don't have the right perspective for this conversation because I'm not American. :)

 

Rosie

 

It seems that most people feel this is an American problem. If this is the case, who better to learn from than someone who s not American. would love to hear what you have to say on the issue.

 

 

the average American only saves 6% of their annual income.

 

Our family's income is below the U.S. poverty line, but we save between 50 - 70% of our earnings and have about $10,000 in savings. Compare this to my parents, who make $80,000 annually and only have the bank's bare minimum in their checking and savings accounts at any given time. They can't pay cash for anything, and they aren't exactly sure how much debt they even have, but you can bet that they have a constant flow of new appliances, furniture, cars, televisions, etc. It reminds me of this comic. Can you spot the guy with the highest net worth?

 

 

 

Wow, and bravo to you. I remember seeing a news story about how different countries save. I believe Americans saved the lowest percentage. I think that is really something to think about.

 

 

Also, I understand that there are some truly poor people in America and elsewhere. I am more concerned (for the sake of this question) with those that are poor because of their views/habits with money.

 

For example, when we sat down with one of our family members, we found that they had $3000 per month left over after paying bills, buying food, and money for gas and travel to an from work. He has no idea where the money is going. This to me is not poor. We offered to help him make a plan, but he prefers to come and complain instead and always asks how we always have money for emergencies. I wish I had that much money left over every month. He and his family really don't see a reason to not spend the money if it is there. This case is extreme, they do not have name brand clothes, nice things, or the best car, but they never have money.

 

Some times my children see this and ask, "why can't we go out every weekend to (insert name of cash guzzling location here)?" I have sat down and explained things to them. I point out that when they have emergencies they have to scramble to borrow money. When both my dh and this family members were laid off, our savings allowed us to survive 16 months much easier than others we knew. Seeing these things has helped, but I worry that my dc see these families looking like they are always having a party and want to be like that.

 

Jec3113, I love your ideas. I am going to work on implementing those things into our household.

 

Danielle

[Sputterduck]

If some perspective would help, you all are welcome to come down and meet the people of the camps we serve. :) It's a great way to show a child how much we really have.

[Ohdanigirl]

If some perspective would help, you all are welcome to come down and meet the people of the camps we serve. :) It's a great way to show a child how much we really have.

 

My dc saw the shacks that people live in near a water park here and they were speechless. They looked like outhouses made with tie wire and spare material found my the inhabitants.

 

Great idea, by the way.

 

Danielle

[regentrude]

I am not American either, so not sure my perspective counts.

A lot of the problem is the desire for instant gratification: people want what they want NOW - and the economy is set up to cater to this trend.

This is something I NEVER ever experienced growing up. If you wanted to buy item x, you saved until you had enough money to buy it - no credit cards, no loans, not even for a car. Absolutely the only thing you could get a loan for was a house.

In our family, we operate the same way. We have a mortgage, but that is our only real debt. Car payment ONLY if the money has been saved up and sits in the bank and collects more interest than the interest on the car loan - so that taking the loan is cheaper than paying cash. But cash has to be there first. Credit cards - full balance gets paid off each month.

 

My kids get allowances which are not tied to chores (chores are expected as a family member - I do not get paid for housework either). They can perform certain extra works for pay (clerical help for our jobs, mowing the lawn). They can use their allowance to learn how to budget, save for long term goals, experience the effects of spending recklessly. DD has had her allowance on a prepaid credit card since she was 13, so she can use it for internet purchases and to eat when she is out with friends. She has learned that if she spends all her money on music, she has to bring food for her outings with friends.

I believe this goes a long way towards developing good financial habits.

 

Plus: we TALK about finances. We talk about budgeting, incomes, the reasons behind our financial choices, things we save for. These are ongoing discussions, and I hope the kids pick up good habits through our role modeling, just as they have managed to acquire good personal hygiene habits and table manners by being constantly exposed to our modeling.

Edited June 3, 2011 by regentrude

[TravelingChris]

We have been talking for quite a few years to our kids about how their lives are fortunate and they can't expect to live straight out of college the way w do after 25 years later. I also think that some of the problem are tv shows. I know this isn't a current show but shows like Friends showed young, starting out cjaracters who were living in large, nice apartments in NYC with new furniture and great clothes. Unless those characters had trust funds, I don't see how they could afford all the things shown on that show and all the other sitcoms. Usually the lifestyle shown is quite unrealistic. You can see that people expect everything at once when you watch a show like HouseHunters and the young first time home buyers are expecting granite counters, huge homes, etc, etc.

[Mejane]

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Edited June 7, 2011 by Mejane

[elizabeth]

Your post contains several different thought processes, and I'm sure others will be able to address them better than me.

 

I will only tell you what a wise friend has often said: Don't compare your insides to other people's outsides.

 

It's easy to feel inadequate when looking at what appears to be someone else's good fortune. But, we never really understand their situation completely, because we can't get into their heads and know all their reasons, foibles, and problems.

 

I think people would be a lot happier if they focused on examining whatever they feel "entitled" to in their own lives, rather than always pointing the finger at what they perceive to be others' excesses and entitlement behavior. It's a very sad society, indeed, when people who are unhappy with their lot look to blame those poorer than themselves.[/Q

:iagree:

The last acceptable prejudice is against the working poor. Might I boldly suggest that those who think this attitude is acceptable to refer to Ezekiel, Jeremiah and the book of Matthew. I do not consider the Bible to be taken literally but the lessons therein have value. When preachers get their heads out of the political sphere and back into the justice and compassion for others area it will be a welcome relief. There is only so much judgment and cruelty that can be justified using sacred literature.

[Rosie_0801]

It seems that most people feel this is an American problem. If this is the case, who better to learn from than someone who s not American. would love to hear what you have to say on the issue.

 

Ha. No. It's not just an American problem. I have a different stance on welfare to what many, probably most Americans here hold. I don't think it is wrong to feel entitled to welfare because that is the way our system works. I AM entitled to welfare. The law says so! There's plenty of talk about "bludgers" over here, but most people have no wish to be on welfare any longer than necessary. (Mostly because the government department responsible for it is a pain in the butt to deal with :tongue_smilie:)

 

Those considered to have an entitlement mentality with all the surrounding negative connotations are the "dole bludgers" who are either not trying to get work, or are having babies to keep their payments coming. There are mixed feelings from those with low incomes about people with above average incomes taking indirect welfare in the form of bulk billing doctor appointments and such. On one hand, if they can afford to pay, and they ought to be able to on those nice wages, they should pay! On the other hand, if they can legally get away with not paying, well, good luck to them!

 

I think it is important to be aware of our children's peer group, particularly with naturally materialistic kids. My inlaws have money, but MIL grew up poor so continued to act that way. That really rankled with the kids because they knew they were being deprived. It's one thing to wear second hand uniforms if you can't afford new. It's another thing entirely to be the only one wearing a second hand uniform at your prestigious private school when you know your parents can afford a new one just as well as everyone else's can. My MIL thought she could erase her daughter's materialistic tendencies by being a tightwad. It most definitely didn't work! It may not have backfired so much if they had sent her to a school where other people wore second hand uniforms, or if they had allowed her to keep up appearances in public.

 

Rosie

[rwjx2khsmj]

One of the things we do is use the word "choose" when ever we talk about money. We "choose" to spend our money on this rather than that. We "choose" not to spend our money on certain things so that we can save more for later. We don't say we can't afford xyz. We make choices about where our money goes and why.

 

Understanding that how we use our money and why is a choice for each and every dollar is a lesson that I hope our children understand. My parents made no choices, the money came in, the money went out, where did it go? DH came from a house hold that was always poor, except when dad wanted something or if you caught a glimpse of the bank account balances. The dishonesty concerning money in his parent's house continues to this day.

 

We give the children (11 &14) control of money for clothes, they have to buy essentials first and then decide what is most important on the list of wants. We offer the ability to earn money by doing chores during the week. If they wait to do the jobs until the weekend then their labor is free.

 

It's a learning process. Dh and I are learning to set a positive example of stewardship in all areas and we are trying to pass our experience and example on to the dc.

[Aggie]

We're doing the same thing as many pps. Teaching economics, having dc work, saving, etc. Each of our dc have 3 accounts: cash on hand, savings for near future (toy or camp, for example), and forever savings (retirement).

 

One of the financial pitfalls I see coming is the experience with gift cards. What a great way to teach kids that it's not real money! A friend recently gave each of our dc a $25 Visa card. I confiscated the cards and gave each child $25 cash. The cash was much harder to spend, from what I saw, than the card would have been. And I'm the same way....I'll keep a $10 bill for a year, but it's nothing to put $10 on a cc.:D

[Peela]

We give the kids a fairly substantial amount of pocket money- $20 a week each- and have done for years. They also have part time jobs that we organised for them. We want them to have plenty of money, we want them to learn to manage it well while they are still with us. If they don't have a decent amount of money, they can't learn properly to manage it.

Both are out of the house now and in the way of many shops each day- it has been a hard lesson for them this year, when they have less time to earn money than when they homeschooled, but they also have a lot more opportunities to spend it, daily. They now know what it is like to run out of money.

Our approach is not to encourage entitlement and not to encourage a poverty mentality, either. We want them to feel they can have what they want- but realise that they may have to prioritise and work for it and save for it.

Its all been pretty organic and natural. We are 2nd hand specialists- and the kids know what things are worth, and love to shop 2nd hand. That has meant they have many, many things their friends do not have because they bought them on sale and/or 2nd hand. Designer clothes, accessories etc We encourage a sense of abundance and fun around it all, not poverty, because we think that is a healthy mindset. The financial environment you are brought up in creates a certain mindset that can either work for you or against you later in life. We live in abundance and we teach the kids that we live in abundance.

But we don't borrow, we limit credit card use to paying bills, not luxury items- we only spend what we actually have.

I think its how you actually live that will have the most impact on your kids.

I remember my parents being fairly abundant with me too. And dh too- we both grew up in middle class. But we don't have a borrowing mentality- and my parents didn't either. They saved. We save. And we teach our kids to save. Its not really difficult.

[ThatCyndiGirl]

What you describe with your in-laws is the deprivation mentality common with people who were reared in poverty/low SES. There can be a tendency to hoard/acquire/spend now with little thought of saving. While it makes more sense to SAVE if you don't know if you will ever get any more money (THE FEAR), the reality is that they tend to want to 'enjoy it now, for tomorrow this, too shall pass'.

 

As far as your kids, talk, talk, talk. I was a big spender. Not on any luxery items, but on stupid crap that was later destined for a yard sale. I finally got to the point where I could say to my kids, "let's just enjoy that here at the store" or "let's go home and think about whether we really need to buy that".

 

Not sure if that's what you were looking for or not?

[Hedgehog]

Honestly? The effects of being poor are a wretched familial inheritance.

 

How do you change it?

 

Education.

 

:iagree:

 

It's not necessarily that you copy your parents' attitudes to money - sometimes you do the complete opposite, because you so hated how things were when you were young. But it is wretched, indeed.

[Mama Geek]

I agree with a lot of what has already been said, but wanted to add 1 more thing.

 

Teach kids to look at the cost of things and what their time is worth and evaluate the 2. Let me give an example using dh.

 

He wanted to buy a $100 item. For more than a week he spent all of his free time searching online and I finally asked him if I could help. I started looking and looked for about an hour and I asked him how much he thought he could save on the cost of the item if he found it at the right price. The answer was 5 or 10 dollars. At the time dh and I were both employed as engineers and making much more than $10 an hour. At the time it was probably close to $30 an hour for each of us. I pointed out to him that if he spent his time working rather than searching to save the $10 we would be so much better off.

 

No I don't think he should have worked more, but his free time was worth more than that. Every now and then he needs to be reminded of this again, but he does much better since this 1 instance.

 

I know that dd is still a baby, but at some point I will have her manage the family budget and bills. I am not sure of the age yet, but I think that would be very beneficial.

 

It is also important to make good choices when it comes to picking a career. There are still some jobs out their for college grads...you have to pick the right major and a good school. This takes time and effort to research. Talk to people in fields that you are interested in and find out how much they make, how much work there is etc.

[Jyniffrec]

I don't have much to add except this. When we are in a store and the kids want something I have taught them to say, "I like this" rather than "I want this". Then we walk away appreciating the nice thing but not having bought it.

 

I grew up like many others here did. My parents spent what they had and still do. They are in a very precarious situation right now and I am quite worried. My father was just diagnosed with diabetes, is 60 years old and is being laid off from his job. They owe 3 times on their house what they paid 35 years ago and say they are never going to retire. They started working extra hours for the time when the deficit would come but showed up at my house yesterday with their old comforter and a TV because they had gotten new ones to replace these. And it isn't just this, they hurt my siblings because of their behavior. My sister lives in England and doesn't even buy extras so that she can come home and see us. It is expensive to bring 4 people here for 2 weeks but they budget and are very responsible. My sister says she is still waiting on my parents to offer to buy her a cup of coffee when they are here. That is painful for both of us. :sad:

 

So I work very hard to be responsible but it is hard with the example that was set for me. Dh's family was extremely frugal and so is he. They have a great balance and that is where I try to draw from when I have to make decisions.

[OrganicAnn]

When I was a kid in a family of 3 kids, our parents would give us a little extra money when we went on vacation. One amount at the beginning. No exceptions, so we had to learn to spend it on things we wanted and not to ask for more. My sister would want to spend it right away. It was like it was burning a hole in her pocket. My brother would consider everything and end up buying one big souvenir of the trip. I was somewhere in the middle. On another skill, my sister would always buy candy with her money. She was great at figuring out how to get the most candy for the money. When we traveled in a foreign country, she would always have the money figured out before anyone, because she was plunging in and buying candy.

 

Growing up we didn't have the best clothes or shoes or cars. But we had lots of books, went on interest trips and all went to college with very little debt. We didn't have a car at 16 or 18 or even 22.

 

My mom worked in a bank before she was married and learned a lot of life lessons from her father. She passed on these lessons to us.

 

My sister as a young adult was in the Peace Corps in Africa for two years and in that time really learned how to save money and live frugally. (so there is hope for the young spenders).

 

When the recent economic crisis came along, my mom called each of us (we are all married and own homes) and asked us if we had any credit card debt. None of us did.

 

Our family doesn't have new cars, cable tv and other things that we could spend, spend, spend on. But we do have a nice expensive mower, because we needed it for our 2 acres. We make different choices that 'the average' american probably. That is okay by us.

 

I do think that PBS is great for little kids to avoid commercials. I really notice the commercial the few shows that my DD watches on commerical TV.

 

So to distill my ideas:

Talk about your values

Give kids opportunities to learn about money & spending

Set up someway for a kid to save money (piggy bank if nothing else). If relatives give too much money to the kids, set up a savings account for them (*)

Don't save kids when they make money mistakes. Sometimes you learn more for your failures. It is better to fail at 8 than at 28.

Live your values (walk the walk, don't just talk the talk)

Start early talking about money, but don't quit early

Don't fulfill every want. Let kids learn what it feels like to sometimes do without something they want.

Teach kids about cooking from scratch

 

 

(*) I had a friend who said that her parents would give her kids (age about 5/6) $50 for their birthday and Christmas and so their piggy bank was always bursting with money and they always had enough to buy any treat or toy. I suggested that she put a $1 in the bank and the rest in a saving account. Their kids would appreciate that money more as teens or in college. She didn't want to upset her parents by doing that.

[nono]

SO many great replies since I wrote...just wanted to say :iagree: to almost everything written.

 

 

And, I had to mention, we don't give allowance. Why? My kids are too tight to spend a nickel. SERIOUSLY! We started giving an allowance, and they refuse to spend. So, we just put it in the bank along with the bit we save for them each pay period. They save it all....so I wanted to mention that too, because, as OrganicAnn points out, kids come wired differently. Environment matters, but some of it will be intrinsic to the person.

[PiCO]

Now for my question. What can we as parents do to help our children grow-up into financially responsible adults? How can we bring home the difference between needs and wants?

 

I like the book The Millionaire Next Door. It's a statistical study of the spending habits of American Millionaires. Most of the millionaires in this country do not live an expensive lifestyle.

 

I just lead by example and talk about having financial priorities. My older dd is a natural spender, younger dd is a saver. But older dd is coming around- I started making her budget her own money for clothing and personal items at age 12. She quickly realized if she wanted to buy something that she *really* wants, she needed to stop buying everything that struck her fancy. She also learned to leave her debit card at home.

[Tap]

One thing that we have done is to teach our kids the difference between paying interest on an item and saving to buy it. Using credit wisely is a common topic here. From a young age, we have been pretty open with our kids about the 'why and how' behind our spending habits.

 

We talk about how interest isn't just what you ultimately pay for the item, but also talk about how interest payments affect how much money you have to buy other things while you are paying it.

 

I want my kids to understand debit, especially credit card debt, because I use an American Express to pay for almost everything I buy and I shop online often. I pay the cc off every month so we don't pay interest. Our bills are paid online, so they never see 'bill day' with parents writing out checks to pay the bills. They are growing up in a world where money is electronic and the cost of things is often hidden in "buy 3 get 2 free" advertising.

 

We talk about getting a good price on something and stocking up, but we also discuss 'will you use it enough to justify the cost of buying 5 of a sale item, vs the one that you really need that isn't on sale'. We talk about advertising A LOT.

 

Our kids have learned the value of a dollar, not by having so much to spend themselves, but by having to work to earn what they get. We don't pay a standard allowance, but the kids can do extra work for money. I don't pay a lot either, $2 per hour, because the point is to appreciate the work that goes into a job. They have a few hundred a year to spend with this money and gift money combined. I have pretty much let the kids spend thier money on what ever they wanted, unless they were just having a day or week of binge spending. I have also matched money for the kid's money 'dollar for dollar' when they were saving for a big item (that I felt held great value-like a laptop) instead of spending it on a bunch of little things.

Edited June 4, 2011 by Tap, tap, tap

[Rosie_0801]

I don't have much to add except this. When we are in a store and the kids want something I have taught them to say, "I like this" rather than "I want this". Then we walk away appreciating the nice thing but not having bought it.

 

That's nice. :)

 

My mother used to say "Is it worth cleaning the bath to earn the money?"

 

It never was. :lol:

 

I like the book The Millionaire Next Door. It's a statistical study of the spending habits of American Millionaires. Most of the millionaires in this country do not live an expensive lifestyle.

 

*giggle* Yeah, my inlaws dress worse than I do a lot of the time, and I mostly wear stuff I bought a decade ago!

 

Rosie

Edited June 5, 2011 by Rosie_0801