- Living in a bigger house
- Driving a more expensive car
- Wearing designer clothing
- Birthday party for Billy and his 15 friends
All of these are great to have but I’m an advocate for having what you need before having what you want. I teach my clients the tools of building and protecting the ‘4 walls’ (food – shelter- transportation- clothing) and building a solid foundation BEFORE you put the roof on.
Many single parents today “feel” (yes emotion drives 80% of our money handling) as though their children will suffer if they don’t have the newest bat, the UGG boots, and the party for 15 at Chucky Cheese. I truly believe this started with our 80’s generation because I don’t remember my parents being focused on making sure I had $100 pairs of NIKE’s, and a birthday party that cost as much as a monthly car payment. They knew better. Sure, they had there set of ‘keeping up with the Jones’s too’~ but the credit frenzy was just beginning when I was a teenager. We had the Sears and JCPenney cards (didn’t everyone?) but I didn’t watch my parents charge the washer/dryer on “6 months same as cash”. They didn’t finance our childhood pet. They did what most American’s did before credit became a ‘normal way of life” they paid CASH and only when they could afford it.
So how is our easy access to credit affecting our children?
Really think about the long term effects our buying decisions and behaviors have on your kids. If you are using credit cards to get your nails done, take the family vacation, and stopping at Panera, Papa Gino’s, and Outback for dinner this week, these are the behavior patterns our kids see AND become accustomed to.
They don’t SEE cash leave your hands. They don’t SEE half of the weekly paycheck going out the door for the family cell phone plan with unlimited minutes, texts, and data. They don’t SEE the cable bill came in $70 higher because it snowed for three days and school was canceled, and the added cost that ‘hitting the rent movie button’ actually takes away from the normal budget. Unless you are talking to them about what it takes to run a household and modeling the things you know will create healthy adults down the road, you are missing out on an opportunity to teach your children what Mastercard & Discover will teach them if you don’t.
So what can you do differently to shift this? Implement an “envelope system”.
It can be cash envelopes or try using a virtual envelope app. Regardless of which method you chose, pre-naming dollars to categories each pay period is empowering and can show your kids how to manage money. This one tool provided a huge shift because my kids could actually see something happening. When we stopped for a bite to eat at a drive thru for example I had my son pull out the envelope and the unfamilar cash to pay for the order. Same at the grocery store, if they are with me, they open up the envelope and can see the money leaving .. they were also quick to count what’s left and tell me ‘when we’ve done better for example on grocery shopping and how we should re-allocate those dollars to something fun!’
I’m proud of this because I know there is a huge difference in their awareness (not just mine) that has benefited them with my changing my pattern from ignorance to understanding.