I think we have all heard of the term DINK, which is an acronym for: dual income no kids. Until recently I had not heard of the term DEWKs: dually employed with kids or SITCOM: single income, two children, oppressive mortgage. Right now I am feeling for the SITCOM, at least the OM part. All these acronyms come from the many ideas I read in: “All the Money in the World: What the Happiest People Know About Getting and Spending” by Laura Vanderkam.
She mentions talking to your children about money, and making it part of their upbringing. I do not have children yet, but I have a feeling that my kids will think I am like a broken record, because I will definitely be teaching them about money just as I will teach them about respect, love, trust, the list goes on. I want them to feel comfortable talking about money. I like what the author says in the following quote about an internal locus of control. This allows kids to chart their own course and work hard on their own merits. I know it has always felt nice when I have attained something on my own, rather than on the shirt tails of another.
“The best thing we can do for our kids, economically, is to teach them to be entrepreneurial. A big chunk of this is helping them develop an internal locus of control–that is, the belief that they are responsible for making their way in the world. No one is going to hand them a job or an opportunity. They will have to seek it out.” page. 139
Another ideal that I would like my kids to see me follow is that we are living within our means. I want to show them, whether with our own finances or with examples, how it is possible to live within your means based on choices that we make. I have seen so many horror stories on Oprah and other shows about parents that give their children everything they want and are not even remotely able to pay for it. To me this is “keeping up with the Jones.” Laura says that children’s mindsets are shaped between 8 and 12 years old.
“Talk about why a lower interest rate on a mortgage matters in terms of monthly payments, and if you’re working extra hours to afford a particular vacation or to get out of debt, make sure they see the connection. Keep in mind that in a cashless culture, kids may have a harder time grasping what money really is.” page 213
It should mean that children will have more respect for their parents and the material possessions they do have, and hopefully connect the dots to see all that a parent is doing to provide for their children. I can understand parents wanting to protect or shield their kids from knowing if things are tight, or that their financial situation is dire, however, I think it is possible to educate without instilling fear.
“If your children see you paying your bills on time, living on less than you make, and putting money away for the future, this becomes the norm. If your young children have savings accounts and simply learn that a percentage of birthday and holiday money always goes there, this will be an incredibly difficult habit to break later on. Saving will feel like brushing their teeth.” page 212
She also tells us to let children fail, that we should teach our kids the “value of the dollar.” She says to encourage children to figure out their values about money (and that means we should probably know ours). I learned my values about money the hard way. I had many jobs during college, juggling them to pay for school, while also babysitting on the side. Some friends got to sleep in and take classes all day (or have just 3 classes all day and that was all they were responsible for). I was in a work/study program and then worked extra on the side so I could go out and have a little spending money for food or a movie with friends. I definitely did not take what I earned for granted, I worked hard to pay for school, and knew what an opportunity my college education was for me.
So regardless of if you are a DINK, DEWK, or SITCOM, what are your money values?
This is a great lesson. While I have no kids either right now (or a spouse) and am finishing up my final semester at college I am nothing but grateful for the financial values my parents have taught me. I worked hard in high school and went to a public-state school where I got a full-ride scholarship and am relieved to be graduating debt free.
I have plenty of friends who fall into the “parents paid for everything” category and were taught (or assume) that loans are just free money and working on an undergrad degree for 5 or 6 years isn’t a big deal. Now, of course, reality is setting in and they’re panicked.
I can’t agree more that teaching kids to leave within their means and make good financial choices (which sometimes mean sacrificing or making the practical choice) is imperative, especially when jobs are harder to get and carrying lots of debt can sink you pretty fast.
Congrats for graduating debt free – that is a HUGE accomplishment. Thank you so much for sharing!