Our Money Management Experiences as Kids

Ten years ago, I would have been confident teaching my peers about personal finance.  Five years ago, I was taking personal finance classes, because I realized that I knew nothing about managing a personal budget, was unemployed and in debt, and desperately needed help.  How did I get there?OurExperiences

Since we focus on helping parents teach kids to manage money, it may be helpful to talk about the experiences Tracie and I had with budgeting and financial management as kids.

The truth is, as a kid, I didn’t have to budget, I just had to learn to live without.  We weren’t dirt poor; we had food and clothes, but there weren’t a lot of luxuries in our house when I was growing up.  I remember watching my Mom  putting together the grocery list, gathering coupons, and estimating what the trip would cost.  I would help her keep tally with a calculator as we added food to the cart.  When we got to $100, we’d quit and head for the checkout.  It was a way of life: our family had enough to cover the essentials, and I was happy for it.

Tracie’s family was a family of entrepreneurs.   Grandparents, parents, aunts and uncles all owned their own successful businesses.  Tracie grew up learning that her family had resources, and that it was always important to spend less and save more — but nobody ever mentioned “for what” that money was being saved.  Tracie was given the opportunity to manage her own budget as a teen, receiving a lump sum which she had to save for clothing, activities, entertainment, and savings.  No big surprise, she wound up with a lot of money saved up by the time she left home.

Guess what happened when we got married and started bringing in two incomes?  I wanted to spend money, because suddenly I had some.  Tracie wanted to save it, but didn’t know for what.  In the end we compromised by spending everything we made, plus an additional 10%.

This all went pretty well through the roaring 90’s and the early 2000’s, when credit was plentiful, incomes were increasing, and our house was a bottomless ATM.  Sound familiar?

The point is, we didn’t learn a lot about budgeting as kids.  I had no money to budget with, and Tracie had no challenges or mistakes to learn from.  When we ultimately had to adopt a serious budget to get our financial lives in order in 2007, it felt painful — because it was!  We had to learn lessons in our mid 30’s what we should have learned in our teens. These are the lessons we’re trying to teach our kids right now.

Don’t worry if you feel like you’re not the sharpest financial tool in the shed.  None of us are born with financial genius.  The good news is, you don’t have to be a genius, if you’re teaching an 8-year-old how to save and budget.  You can take some of these easy lessons we’ve discovered, and share them with your kids as your own special parental wisdom.  In the mean time, you could be working on your own financial literacy.  As long as you can stay a couple of years ahead of them on the curve, they’ll never know the difference, and you’ll all come out as winners in the end.

In the end, we want our kids to be equipped with the tools they need to avoid the painful (and costly!) mistakes we made in our 30’s.  Every parent wants their kids to have a better life than the previous generation.  Teaching kids to manage moeny is one of the key skills to learn to make that possible.

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