I am nearly 50 years old, have a college degree, have worked for the same company for 27 years in the field my degree is in. I am married and have two teenagers.
Sounds like I should be in reasonably decent shape financially, right?
WRONG!!!!!!!!!!
I am broke. I have spent every penny that I have ever had. I do not own a home or property; no savings, stocks, bonds or anything like that. Both of our cars are financed. Essentially I have nothing except for some clothes and shoddy old furniture. I am living paycheck to paycheck and many months not making it so actually my wife and daughter are chipping in to help meet expenses. I will likely not be able to put one cent toward my children's college education.
So what happened?
I could spread the blame around like saying my employer doesn't pay enough and other things, but truth is, most of the blame lies with me. I have always been a very impulsive person and have made many stupid decisions that caused my family to go backwards financially rather than forwards. I guess I do blame one party for my situation: my parents. Don't get me wrong; I love my parents and they are great, but they really did not teach me about money. And they were not in financial ruin. They did not go to college, but they both worked and there always seemed to be enough money. In fact it seems like they had more money then than I do now. They were not in debt (that I know of). They were able to pay for a large part of my college education so that I had no student loan debt upon graduation. We had what we needed and for the most part what we wanted. Of course they did not have some of the expenses that many people have these days: no cable bills, internet, cell phones or computers that always seem to need to be upgraded. (I think the cell phone and computer industry is all a big conspiracy to relieve us of our money).
So I would consider my parents financially successful. Not rich by any means, but certainly well able to provide. But they did not pass their know-how on to me. They did not teach me about saving for purchases versus buying on credit; waiting patiently until I had enough money rather than "whipping out the plastic"; they did not teach how do distinguish wants from needs and to act accordingly. And so instead of being a financial success, I consider myself a financial failure.
So what about my children? My oldest will be a senior in high school this coming school year. She has a job and is saving her money well as she looks forward to college. Her younger brother is more like me. He spends eveything he gets and so at any given time has virtually nothing.
So here is some advice for parents to teach their kids about money. (Do as I say and not as I have done!)
1: If possible, give them an allowance and set up a savings account for them. If you can join a credit union, do it at a credit union rather than a regular bank because they generally pay better interest. make the allowance contingent on doing certain chores around the house. If the chores are undone or not done up to standards, withhold part or all of the allowance.
2: encourage them to get a job; a part-time job in high school makes most kids more responsible and many actually do better with their schoolwork than those without jobs.
3: have them pay with some of their allowance or job money certain household expenses that pertain to them, such as cell phone bills or internet costs, and car insurance, gasoline and maintainance if they are driving.
4: if they need/want more money than they have, lend them some if you can, but charge them interest and be sure they pay you back; otherwise, withhold the allowance. Make sure to help them distinguish wants from needs when borrowing. If they can do without it, it is unadvisable to borrow for it. It is also a bad idea to borrow for something that will be outdated before they get done paying for it.
5: let them in on the famly budget and decision-making process. Have a "family budget meeting" once in a while so they can see how things work in real life.
Don' let your kids end up like me because it really sucks!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
So Sayeth The Shack
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1 comment:
Very, very good - and timely- post Buddy! Not that I can sit here and say yep, I did all that with my kids and they did wonderfully as a result. Suffice it to say I TRIED to get them to understand the "want vs need" thing but much of the time, Mom's instruction there went completely "over the head and below the knees." I did insist if my kids wanted their driver's license while in school, they had to have a job, buy their own vehicle, pay the expenses that come with car ownership -insurance, registration, inspections, repairs, etc - and they all did follow through with that rule. But too, they also knew there was absolutely no way I could get anything like that for them as it hurried me to be able to keep my own vehicle on the road and maintained.
The economics of today though are such that as soon as you -or I -get a raise of even a little quarter per hour or $10 more per week, it seems every utility company, every gas station, every grocery store etc., etc. increases their costs so that the $10 -before taxes -is gone before you even bring it home and then some! It's a constant game of "catch-up" ball, for sure!
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