How to teach your kids about money

I stumbled upon some rather interesting content today on the web about the intersection between money and children. For example, this article on Inc.com says that parents are not discussing a crucial topic with their kids–student loans and credit card debt, based on “research” done by an online lender called SoFi, which was really just a survey of a thousand people between ages 36 and 65 (most likely their customer base only) about their attitudes on money.

The author then went on to provide three tips on helping your (millennial) kids become more financially savvy, from – you guessed it – an employee of SoFi (somehow I feel that this article was just another advertisement for the lender) – things like “teach them healthy habits early” and “help them develop a good credit history” to “create debt grids” (write down all your debts and keep track of them).

While there is some merit to this advice, I think that ship has sailed for many millennials. Their baby boomer parents were no doubt, lacking in details about personal finance when they were growing up, so of course, they didn’t teach their kids about money. Can you blame them?

eric-prouzet-1483691-unsplash
Photo by Eric Prouzet on Unsplash

It’s no surprise that all parents will come across this in their parenting journey–how to teach their kids about money and what to teach them about. I think that in many ways, teaching kids about money has the same elements as teaching kids about sex–you’d rather avoid it until it’s absolutely necessary because…well, it’s uncomfortable, especially if you don’t know much yourself or you’ve made some bad choices with money, you definitely don’t want to ‘fess up to your kids, right?

Or maybe you do, and you want them to learn from you. Nonetheless, it’s still an uncomfortable subject even for adults to talk about. No wonder why money is like the number one thing that couples argue about, because chances are, you probably married someone who has opposite money philosophies than you do.

My parents fit this mold completely. Not only do they differ in their parenting styles, but they also differ in their money philosophies. My mom is a saver, and my dad was a spender. Both of them taught me some very important lessons about money.

We didn’t have much money when I was growing up, due to my dad’s inconsistent job history and the fact that we lived in a third world country, where everybody else around us was poor. It was a normal thing to be poor. I knew this right away as a child–that we didn’t have much money and that I was much luckier than my brothers, who was born and grew up during the war. A famous line of my mom’s is “We didn’t even have enough money for food so I had to divide the portions into three meals! And I didn’t have much to eat so I couldn’t produce enough breast milk to feed my kids!” Luckily, when I came along, there was enough food to go around, so she was able to produce the milk.

Despite that, my dad was a major giver–he’d give away whatever he had left, telling people, “It’s okay. You don’t have to pay me back,” or “This one’s on me, buddy.” As a child, I didn’t understand why he did this. I thought, “Why on earth would he give away money when we’re already so poor?!”

Now, as an adult, I finally understand.

MoneyToon

From watching Ellen Rogin’s Ted Talk today, I learned that giving can be just as rewarding as receiving. It can make you feel even richer. In her talk, she advocates for giving back to the community through charity donations and volunteering your time. This was something my dad did a lot. He volunteered his time at our church (the main hub of our community) and he gave away whatever money he had left (after he’d spent the majority of it, that is). This solidified his position within our community–everyone respected him and loved him, and we were always invited to parties and gatherings. He was also a funny guy–that helped too. His philosophy on money and on life was so simple, and yet it worked.

My mom, on the other hand, is the opposite. Besides the tithe she gives every week at church, she is not typically a charity giving kind of person. Instead, she hoards her money in random places and tends to them in the same meticulous manner as one would tend to a flower garden. Unlike my dad who couldn’t keep a job long enough, she worked hard at the same job for many years. She was the financial rock in our family. Without her, we probably would be worse off.

Ironically, my dad was the one who bought a life insurance policy and convinced her to do the same. But that’s another story.

The point is–kids are like sponges. They absorb information so much, and so quickly. As discussed in Ellen’s talk and in this article, kids learn a lot from how we act around them.

…how our children will manage money in the future is being shaped by the atmosphere around finances at home right now. – Ted blog

Reading this reminds me that as an adult, as a parent in particular, I need to pay attention to how we talk about money at home. In fact, my husband may agree that we don’t really talk about money in front of the kids. Besides saying, “We don’t have money for this and that” sometimes we typically don’t give them any idea as to how we are financially. I think they’re too young right now. My daughter is old enough to understand certain things though.

My parents didn’t talk about money either, but I learned so much from observing them in my youth. I think it’s worth noting that in order to teach your kids to be responsible with money as adults, we must first model that behavior. But I also don’t think that you should go around and say, “Don’t do what I did!” until they’re old enough to understand, probably around teenage years, when the majority of them start earning their own income.

I don’t want to be like my mom, but I also don’t want to be like my dad either, so I strive to be somewhat in the middle in terms of money. Every once in awhile, I’ll take the kids out for a treat–bubble tea, baked goods or a Happy Meal. They love it because it doesn’t happen very often. It’s my way of saying, “We don’t always have money to do this, but when we do, it’s fun!” Delayed gratification, right?

Perceptions of poverty and how to overcome it

First, let me get one thing straight.

I’m not here to extend a confession as if someone is not reading, or as if I want any kind of sympathy or charity. I’m here to tell you about my experience with poverty, and how my thoughts and perceptions about poverty have evolved over the years. I’m here to tell you the truth about poverty.

I’ve been poor for all of my life, and currently just barely out of the running for state assistance benefits. I make about $100 too much to be considered “at poverty level” or “the highest need.” Yet, when I file my taxes I still qualify for credits intended for the poor. In fact, for the past few years, I belonged in the State Assistance Club. When my son was born I enrolled in the WIC program so I could get extra food benefits, only to drop out completely after several months of being limited in the things that I could buy at the store. Cheerios, plain only, in a certain size. Only a certain type of tuna, not all types. Only block cheese, whole wheat bread only, etc…you get the idea.

From approximately 2014 to 2016 I was on food stamps. Or I should say rather—we were on food stamps, my family and I. We subsisted on an income of less than $2000 per month. Our rent was about $1000 per month, cheap by Portland standards. At least we had that on our end. That, and financial aid money from my husband’s school kept us afloat.

Then in the summer of 2016, I got a job that I coveted for so long—an accounting position at my alma mater, Portland State University. It wasn’t so much the fact that it was an accounting job, it was more so the opportunity to work at a university that I enjoyed being at so much during my undergrad years. Even though it was a part time position, things were moving in the right direction. But we still qualified for food benefits.

It wasn’t until I got a full time position that put us out of the race for food stamps. Although my husband graduated last June, he’s still on the job hunt and things are still hard, especially when there are no longer financial aid money to utilize.

There have been many days in the past where I’ve felt shameful about my lack of prosperity in life. During my four years working for a local credit union, I handled a lot of accounts. Numbers flashed before me every single day. High numbers, that is. I helped a lot of individuals from my generation and knew exactly how much they made. I also knew how much they spent, and the numbers were both equally monstrous. Often, I’d sit there next to the quiet hum of the computer, and browsed through people’s accounts during slow times. Those who were around my parents age, I understood if they had a lot of money. But for those who weren’t, for those who were younger or my age, I’d stew in silence at how much they had and how much they made, and wondered what was wrong with me, why was I still stuck in the position of bank teller, a position that only pays a few dollars above minimum wage. After all, wasn’t I a college graduate? What the hell was I doing there wasting my time looking at other people’s accounts? Why wasn’t I out there earning more money??

IMG_3807

This attitude unfortunately was born out of self pity, and it’s not something I feel great about admitting. And that’s the thing that is worse than being poor—your attitude about being poor. I grew up in poverty, and one of the things I’ve realized lately is that poor folks are perceived poorly by their upper middle class peers. You’re lazy. You sit around all day and complain about why you’re so poor, why the whole world is against you, why God hasn’t given you a piece of the pie yet, when in reality you haven’t so much as gotten off your seat and made some changes. In reality you haven’t experienced an enormous amount of rejections and disrespect yet. In reality you’re scared, and you don’t know what to do, how to make the changes happen.

Without realizing it, I trapped myself in the mindset of a true poor person—someone riddled with self pity, not self confidence. Someone who fits the stereotype, which is ironic because I’ve been trying to avoid stereotypes all my life.

This epiphanic realization came to me recently following the publication of Elizabeth Kolbert’s article in the New Yorker. It was called “The Psychology of Inequality” online, and “Feeling Low” in the print version. In the article, she discussed something called a “tax on the poor”—the fact that people from lower socioeconomic backgrounds are more likely to play the lottery versus those who are not. And they play it so much that it feeds into the system, thus becomes an informal, unwritten tax. Poor people put their money, whatever little money they had, into a bucket for a chance at a larger bucket of money, never knowing that the odds are stacked against them.

That example reminded me of my father immediately. I exclaimed in my head, “my dad used to do that all the time!!” We were always poor when we lived in Vietnam, but he never failed to play a game or two. Even after we came to America, he remained an avid lottery player. He never won anything except for $50 one time. And I’m certain he must’ve spent thousands on those lottery tickets.

So it goes without saying that when you’re poor you hope to get rich and any chance, no matter how small, is worth trying. But as Elizabeth Kolbert wrote in her article, research shows that even for those in the 1%, the truly rich do not consider themselves rich, nor do they acknowledge that they are rich. Instead, they dismiss their prosperity as something minute, something that they worked hard at earning, something less in comparison to their peers. For example, “My neighbor has a private jet that takes him anywhere he wants. That’s rich.” Never mind the fact that they have a million dollar mansion with four new vehicles and a half a million dollar income.

This proves that no matter if you’re rich or poor, you will never be in perfect alignment with how you actually are. When you’re poor, you submit to a lot of self pity and when you’re rich, you submit to a lot of self entitlement.

IMG_5341

I’m glad that I don’t work at that credit union anymore. If I am, I would still be subjecting myself to the same level of self pity. I’ve come to realize that the first step in getting out of poverty is changing your way of thinking. It’s not saying “hard work will do you good!” because it’s easier said than done. It’s not hoping and wishing that others will understand you. It’s the mindset. It’s taking the “feeling low” factor out of the equation and refusing to let it back into your head. I know that I’m not always going to be low income. I’m going to be middle class someday, and it may not happen as soon as I would like but I know it’s going to happen because I’m going to try. And I feel like I’ve accomplished something here today by admitting that hey, I used to be that person who was jealous of her peers and engaged in a lot of self pity, but now I’m not. I can only do what I can, and as long as I’m trying that is what matters.