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?

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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.

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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?

I came, I conquered, and I’m here to tell: the story of my twenties

We must be willing to get rid of the life we’ve planned, so as to have the life that is waiting for us. – Joseph Campbell

This year in February, I turned 33. Exactly ten years ago I graduated from college–the first in my family, in fact. It was a proud moment of my life. What was supposed to be the grandest achievement in the greatest year of my adult life was about to become the greatest challenge that I would face in my youth.

One of those challenges was figuring out what I wanted to do with my life. I knew I had to have a job, but what? I didn’t spend a lot of time while in school trying to figure this out. That was my first error. That error, along with a great force of divine intervention, put me directly in the middle of one of the greatest recessions of all time–the Great Recession of 2008-09.

We all know about that. The one where the real estate market crashed. Just about everyone who owned a home lost value. People lost money left and right. There were no jobs available anywhere. It was an economic downpour that led to an enormous thunderstorm which would take years to recover.

This particular period wasn’t the brightest one in my twenties, and it was something that I was willing to never think about again, until I read this article.

I felt that the article was talking about me, to me. It talked about a concept that I’ve never heard of before called transformative resilience–the ability to improve because of a setback.

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Photo by Helloquence on Unsplash

My story began in 2008. I was a new college graduate, eager and excited for the real world. But as I’ve mentioned above, my first error in navigating the “real world” was not spending time trying to figure out what career path to pursue. Thus began a journey of almost a decade of struggles, both personally, professionally and financially, before I was able to see any clarity in what many would call “the prime years” for working.

I was in a comfort zone in college, a bubble that didn’t burst until after I graduated. I was lucky to find a job right away. It was an internship doing marketing for a local health benefits administrator. I had a good working relationship with my boss, and because of that (and my expressed desire to obtain a full-time, regular position) she referred me to another department in the company when they had a full-time opening. The job was nothing fancy–doing data entry work, but nonetheless, I was on cloud nine because I was making more than I’ve ever had in years. This equates to about $13/hour, great for 2008.

Then the gossip came. My coworkers whispered that we might be out of a job, due to the recession. I didn’t think that was possible. I was doing well, so it came as a surprise to me when I was called into the manager’s office and told that I would be let go–they had to cut labor. Of course, they could not do that to the older, long time employees. It would have to be me, the newest bud.

Earlier that year, right after I graduated, I got married. My husband also just graduated from the local community college and had gotten a job at a hotel, working the front desk. The pay was nothing short of minimum wage, but it was what he wanted to do at the time–work in the hospitality industry. Little did he know that during a recession, not many people travel for pleasure. It was mainly for business.

The next blow came when I called the unemployment office to seek out benefits after being laid off. After waiting thirty minutes on the phone, I was told that I didn’t qualify. I was flabbergasted. The representative told me that the hours I did work during the last year were not regular hours because they were mainly work-study, subsidized by the government. I hung up the phone in tears.

Next came another strike when my husband and I sat down to do our taxes. I remember us so clearly–hunched over tax booklets and forms (we were still using paper and pencil at the time), one person reading the instructions, and the other writing down numbers and doing the math. Several hours later, we discovered that we owed $1500.

We had never done our taxes before, so I figured we must’ve made a mistake. I demanded that my husband take our taxes to the nearest H&R Block for a free review. He came back with the same consensus–yep, we did owe that money.

Problem is, we didn’t have that money in the bank. We were living paycheck to paycheck. Heck, we had just gotten married, so funds were dried up from the wedding.

So we decided to ask his dad for money. We knew that our moms didn’t have much money, so his dad was most likely to help. I was shocked when my husband came back and said, “Nope.”

The reasons are still unclear–he was either unwilling or unable to help. We decided not to dwell on it and moved on. The next task would be to find me a job–any job, really. Living on one income, especially one $9/hour income wasn’t feasible, especially when you have to pay back $1500 in taxes and student loans and a car payment.

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Photo by Aidan Bartos on Unsplash

 

I was lost. All my life, I was brought up to believe that once you obtain an education and get a job, you’d stay there and move up in the world. This upward mobility, stay-in-one-place path would prove to be something that many millenials do not do, and certainly not I. Nobody told me about the challenges of finding a job that fits your values while also utilizing your skills. Nobody told me that getting a job, any job, would be so hard. But that was the reality.

By this time, I was in the third stage as mentioned in the article–in the middle of chaos, where self compassion is absent, denial is in full swing, and panic sets in. Add on the lack of self-esteem, confusion over one’s abilities, and desperation, and you have a recipe for a full blown career crisis. This kind of crisis would put me in a blinding confusion that would last for many years to come.

I bounced from not having a job to having a job within a month. Sounds lucky, right? Except this was the first job that I found. It only paid $9/hour. The hiring manager made it clear that it wasn’t a very fancy or high paying position, but I took it anyway. I was desperate. It was either this or wait for who knows how long before I can get another job. I clung on to the first raft that I found, not realizing that it would drag me down so tremendously for the next year.

Almost every day, I came home from work crying. I had a devious, controlling coworker who’d watch everyone like a hawk and went to the manager immediately upon seeing an infraction of any kind–whether it be that the person was not putting things in the correct order, or was not telling people that they were going to the bathroom–in general, very small infractions that clearly did not dictate their overall capacity to perform the job. But she found it where she could and made everyone’s lives miserable. She assumed managerial responsibilities and barked orders at everyone even though she was not a manager. We all hated her, but there was nothing we could do, so we ignored it. I ignored it for awhile, until it bothered me. It filled me with a rage. Finally, I went to my manager to express this, and although she listened, she did not do anything to correct the issue. Not only that, I was doing three different jobs–something they did not disclose to me during the interview.

I was doing three jobs for $9/hour–it was not worth the stress, I knew it. But at the same time, I didn’t know what else to do. I had gone from a situation of a comfortable job to no job, no unemployment, no savings, and no parental help. Our country was in the middle of a recession–there were hardly any jobs to be had. So it came as no surprise when my husband found out that his company instigated a two-year pay freeze. Nobody would be allowed any raises for the next two years. Ouch.

Not only that, we had to pay back our taxes, so my husband and I devised a plan to save as much as possible in order to make the payments. Part of that involved being diligent about what we were spending our money on. We decided that we would limit our grocery budget to just $30 per week. We had no money for lunch or dinner dates, so the $30 would have to last an entire week for two people. This equates to around 72 cents per meal.

Now that I think about it, I remember it so fondly–us dragging our “grandma cart” down to the nearest Grocery Outlet (because driving costs money) talking and laughing, all the while calculating our total before we got to the register. We had to be precisely on budget or under.

I have to tell you that we did not frequent food pantries at this time. I suppose we could have, but being young and somewhat ignorant, we did not know how to seek out help. We vaguely knew about food stamps, but we never seek it out. We figured we had to be self-reliant. I thought food stamps were for low income immigrants, and I didn’t think of myself that way. In reality, that’s exactly what I was. The combination of pride and shame prevented us from seeking out government help, especially after getting rejected by one of our parents.

Looking back on it now, I remember we were in the stages of chaos and struggle for several years. During this time, we followed the $30/week grocery budget strictly, never went out, never bought alcohol or got massages, spent $10 or less on haircuts (which were rare), always shopped for things on sale, utilized coupons, used second hand furniture, and rarely drove our car. For fun, we stayed home and watched movies that I got for free from the library, and went camping & hiking in the summer.

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After a year, I left my miserable job, and I found another one at a bank as a teller. Eight months later, I moved on to a credit union, where I would stay for the next four years. The experience at the credit union is another story altogether, reserved for another day, but the point remains–I was still confused about what I should do with my life, I was holding onto a raft that was dragging me down again. I explored and researched many career paths but never actually made any leaps of faith. Having just barely survived the recession, I favored stability over adventure, or rather misery over excitement.

Luckily for my husband, he survived his company’s pay freeze, and went on to become manager in the dining department. He stayed there for several years until he became stifled himself, seeking out new opportunities. But after having worked in only two main industries, it was difficult to transition to another industry without a certain level of education or experience, so he decided to step down from his position and go back to school.

Then a month after he enrolled, we found out that I was pregnant. Thus begins the next chapter of our lives–he started college with no kids and ended with two. It was challenging to say the least. We would not have made it without his grants, scholarships, student loans and government assistance. He was working part time, and at one point, I left my job to stay at home with my daughter so I could figure out what I was going to do career-wise.

Time flew by. We focused on raising our kids; he focused on finishing school. We were in a trance for a long time. Despite all of this, we still managed to come out on the other end slightly untethered. We paid off the taxes that we owed to the IRS. I educated myself on taxes so we would never be in the same boat again. We increased our credit rating and kept it at a consistent high. We paid off our used car loan of roughly $7000. We also paid off my husband’s community college loan. We started retirement funds and took advantage of 401Ks. When we had kids, we started their college funds too. We also saved over $10,000 in the course of four years, which was later used in 2014 when I was a stay-at-home mom while my husband worked part-time and went to school full-time. With the help of my mom, we bought a new car outright in 2015. We haven’t had a car payment since 2011. We took a trip to Vietnam to visit my family in 2009. We saved up for a trip to Hawaii in 2012, and it was amazing because every dollar spent was worth it knowing that it took almost a year to save up that money–our money.  If you were to measure our wealth in terms of experiences, we were rich.

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When you fall down and get hurt, it’s easier to stay in one spot and complain about it, and wait for someone to rescue you. But it’s also another to get back up and move on, to face the unknown ahead and say, “I can do this.”  As the article mentioned, all of us will experience a challenging circumstance in our lives, regardless of our socioeconomic backgrounds or ages. It’s what we do with it that matters more.

I truly believe that everything happens for a reason, and the main thing that I’ve walked away with about my twenties is this–it was a challenging period in my life, both professionally and financially. I had no sense of direction whatsoever. I made lots of mistakes. But I’ve also learned a lot. It was from those mistakes that made me the person I am today. If I had not been forced into unemployment, or been depleted of funds, or worked at jobs that paid very little, then I never would’ve learned the value of frugality. I never would’ve consciously chosen to live within my means. I never would’ve felt the desire to save money, and I never would’ve felt the pure joy of spending the money that I saved. There were periods of time when I went crazy and spent more than I should have, and sure enough, I paid the price for that.

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Photo by Fabian Blank on Unsplash

Late last year, I met with a financial advisor (for free, of course–who can afford one with my salary?) and we reviewed my retirement funds. He told me that my husband and I are above average for people our age. It felt great to know that we were on track, that we were much better than the average millennial. Having kids really changed a lot of perspective. Being low income for a long time really put things into reality. I no longer felt shame that I had to rely on food stamps while my husband was in school and I wasn’t working, or when I was working but part-time with two kids. Although we have ways to go in terms of our career paths, things are looking up, and it only took about a decade to see it in its full clarity. I just wish I had seen it sooner.