How to Teach Kids to Understand Money When You Yourself Are in Financial Disaster
In general, we want our children to be better than us. We insist that they eat their vegetables and then turn off Cap’n Crunch when they go to bed. We teach them how to floss by running their tongues over our many fillings. We advise “forgive and forget,” even when we think of the spotted-faced woman who kept us out of motion when we walked out of the 1997 Hagerstown, Maryland car dealership.
Yes, in short, we hope that our children will be better, more generous, more mobile than us, and especially that they will not be bullies like us, and in this case I am talking specifically about people who are just I never … got together financially. People like me.
I grew up in West Virginia in a financially chaotic family. My mother was an artist, so the resources were a holiday or a hunger, and although we (usually) were not poor, I developed the typical poor habit of immediately spending all the money on something comforting, because, no matter what, that money will soon will go away. If money always disappears tomorrow, then today you can enjoy drinks / cigarettes / new clothes / vacation.
Obviously, this is a self-fulfilling prophecy that turned into a vicious circle, a cycle that made me feel like a failure and a failure almost every day of my adult life. Then I moved from West Virginia to New York, which caused cultural trauma and made me think about what is financially “okay”. Does my grandmother bring her scotch tape in a jar of jelly to restaurants so as not to waste money? It turns out to be abnormal.
But having children makes you no longer want to be a failure and a failure, and, like many people who grew up in eccentric circumstances (I once lived with my parents at the post office, but this is history for another day) I think every day about creating the most normal environment for my children. We have dinner at the same time every night. I set limits on screen time . I put on my shoes to pick them up at school.
But I was unable to solve the financial problem. Credit card bills are like a monthly punch to the stomach, and the thought of retirement savings and college savings makes my heart beat faster. Even the smallest financial discussions (for example, whether to replace a rat carpet) generate a wave of shame and reproaches that make rational decision-making impossible, and they console myself … I buy things. Our financial troubles came to a head last year when our childcare costs rose unexpectedly and I went on to graduate school. Our monthly expenses were causing my heart to pound.
I’ve seen friends who have children, do what they do — find regular jobs, fight eating disorders and alcohol problems, and generally play in the press about “growing up” —and I wanted to join them. But every time I’ve tried to pull myself together – budget and stick to it, or research where we need to be in our retirement savings (another blow: our IRAs seem to be in the right direction for nine years – old who wants retire after 120 years) I was so confused that I gave up. And I bought something.
A couple of years ago, when my oldest son was four years old, Ron Lieber, a New York Times columnist , wrote a book called The Opposite of the Spoiled: Raising Grounded, Generous, and Smart Children . I knew I had to start giving my son an allowance , and I wanted to teach him common sense. But this was the classic case of a blind man leading a blind man, except that one of the blind also had a habit of spending money, crying, and falling into fits of rage. And it was not a child.
Lieber offers bold tips for teaching kids money, starting with three “ per diems ” cans — one for spending, one for savings, and one for giving away. By the time a child enters high school, he recommends shifting the entire annual clothing budget in his favor, so that he can distribute it as he sees fit.
It might work for you, it might not, but it wasn’t the case for me: I didn’t even know how much we spend on baby clothes every year. Lieber’s suggestions are based on the idea that parents know what they are spending on, and the idea that I should know – and didn’t – seemed like a serious neglect of parenting. Feeding even more shame, I avoided the subject for another full year, until the issue of childcare / graduate school got me thinking.
For me, a major shift in my thinking has happened with something rather simple: I rephrased my annual New Year’s decision. Every January I make the same decision: I’ll deal with the budget. And every year, faced with cost overruns or inconsistent bills, I give up by February. But this year I changed my mind to “For an hour a week, I will live with the shame and recrimination that comes with learning about budgeting.”
I chose the online budget program You Need a Budget , or YNAB, because it seemed the most intuitive: unlike other budget programs, in which you risk pre-guessing how much you spend each month, and then find out a month later that you were wrong. YNAB allows you to budget only the money you have right now in your checking account. (This is the electronic version of the pre-digital envelope system, where you put money in envelopes labeled “rent,” “grocery,” and so on, and when it disappeared, it was gone.)
You can move money from category to category (or envelope to envelope) to cover overspending, so if your medical expenses are over budget for one month, you take some money from the “entertainment” category and convert it to “medical” and miss the Dave Matthews tickets. (Or whatever.)
This was not an immediate and perfect decision. YNAB is pretty intuitive, but not completely intuitive, and it takes a learning curve to endure – and this is where my weekly hour of pain comes in.
The site offers video tutorials and webinars, help documents, and email support. There is a YNAB subreddit which is very useful for crowdsourced responses. For those of us with emotional blocks around money, learning to endure the learning stage is the hardest part – not throwing the towel away, once I’m not figured out how to keep track of cash or haven’t been able to open an account to reconcile properly. In fact, every time something didn’t work, I had tears again because I felt so stupid and helpless.
But gradually everything is changing. I sit at my desk for an hour a week and refuse to leave the site for 60 minutes (I set a timer). I am watching a video or contacting support for support. I took on additional work to cover the January disaster preparedness costs . Four months have passed, and I heard that it takes six months for the program to become a simple two-minute-a-day “do it with your eyes” system. (Naturally, you need to spend more time discussing priorities and setting goals with your partner, if you have one. The program does not depend on how you spend your money: it will not tell you to dump it with takeaways and beer.; there is no pop-up saying “this is a lot of money for a synthetic blend” or “ are Braves really worth that MLB.com subscription?” As a good teacher, he presents information and lets you draw your own conclusions.)
My husband and I did have to cut down on some of the luxury items, but we console ourselves that we can add them back when we get past this humiliating childcare / graduate stage. I’ve learned to reconcile bills (usually), and when that doesn’t happen, I can now look for the error with a clear eye, rather than through tears. We set savings goals for the high-value items we need, not our old “system” of just putting something on a credit card, and then, instead of enjoying a new booster or baseball tickets, get a prick of anxiety every time. when we think of this.
There is something depressing about “budgeting,” a sense of deprivation. But there is nothing more depressing than the feeling of loss of control and shame when, as my husband said, a giant boulder falls on you. Everyone lives with limitations, even very rich people. (In fact, when I started talking to people, some of whom were quite wealthy, about their budget system, a lot of weird shit surfaced: credit card debt hidden from spouses, obsessive cost overruns or insane frugality, a husband who would go bankrupt on eating in restaurants but buying the latest linen before the internet was around.Many people will die on sponge hill versus paper towel for countertops.This is all strange about money.Many people are shy. The opposite of spoiled has three entries in the “shame” index. )
Of course, I would like us to have more – everyone would like us to have more. And I live in New York, a place that reminds me every day of all the properties I didn’t buy 20 years ago.
I have become quite an evangelist about YNAB. I have changed my grocery shopping habits since I started the program, but I still have to walk by my local trendy grocery store every day and am always tempted by their artisan ho-ho and cleaning products that smell like dew in dryer lint baby duPont’s neck. I was peering through the window when I noticed a friend, also from the Appalachians, queuing up to buy something like potato chips in a bricklayer’s jar wrapped in dune grass.
“How cute,” he said helplessly, about to lose $ 8 on eight calories, so I threw it out of his hands and told him to eat mayonnaise sandwiches until he regained his financial composure. “You need a budget,” I said. My husband, reading a New Yorker ’s story about the lavish spending of a rock star , dropped the magazine in disgust and told eagerly, “Jack White needs a budget.”
I think (think! It’s only been four months) I understand better how to manage my children’s financial education. My son gets $ 6 every Sunday, which he splits into Spend the bank, save the bank, and give the bank. As long as he understands the deal very well, does not waste his bank of spent funds the minute he receives it, and does not show any signs of shame or recrimination. Curiously, though, he really regrets – he saved five weeks on Batman’s $ 10 flashlight, played with it for an hour, and then admitted that he would like to get something else. I confessed that I regretted buying Netflix stock in 2002. But regret is good for learning; spiraling, free-floating shame – no. This winter, I will give him his entire budget for Christmas gifts and let him distribute it as he sees fit. (Follow the furious post about how Hero Daddy got a new Martin D-18 guitar and Lunch Lady Mommy got a leftover turkey with a handprint.)
My son and I set out to save money on an overnight stay at the American Museum of Natural History next spring; he has to deposit 10 dollars and I’ll keep the rest. This year, for the first time in my life, I think I can do it.