How did you learn about money? Did you learn in college when a credit card company sold you on all the benefits, and then you maxed it out not really knowing the repercussions? Did your parents teach you? Did you learn in school?
We can only truly take ownership of our money when it truly belongs to us. I remember when I was nine years old I had a paper route. I would usually keep some of my earnings and would give some to my parents to put into my savings account. My tips usually were my “candy fund” where I would ride my bike on a path that had been worn by the neighborhood kids to the Village Pantry. There I would select something or many things depending on how much money was in my pocket. There was rarely candy in our house, and occasionally we had some at my grandma’s house. So for me, candy was a treat. It was something special.
I truly believed the money I made on my paper route was my money. I worked hard for it. It was my choice to buy the candy. It was not my choice to never receive my money that I was told was put into savings. I have no idea now how much money I never saw. I trusted my parents to put it in my account, never knowing that was not happening. Which is why I loved reading the book: “The First National Bank of Dad: The Best Way to Teach Kids About Money” by David Owen. He talks about how he teaches his children about money. He sets up his own bank and a version of the stock market from his house. One idea he shared was about how kids have to know that the money belongs to them. If they know that, they will make different choices about money.
“My children’s accounts belonged to them alone. When they saved, they reaped the benefit; when they wanted to spend, they didn’t need permission. If my son decided to withdraw twenty dollars, I didn’t ask him why he needed the money—just as my bank doesn’t ask me. What he did with the cash was his business, as long as his balance was sufficient to cover his withdrawal. Why do kids need to control money of their own? Because if the money they spend money of their own? Because if the money they spend isn’t truly theirs, they have no compelling reason to pay attention to how they spend it.” Page 41
An interesting idea. I do remember having a savings account ledger and looking at it from time to time. I was more of a saver. I liked watching it grow and knowing I was working hard as the money accumulated. With the exception of my Village Pantry runs, I really did not spend that much of my money. Although I will never know how much never made it to The First National Bank of Tami. Alas. Live and learn. I will be teaching my kid(s) to take ownership of their money, and to know how to track what they take out and what they are earning. And, no, I will not steal a penny from them. If you have kids, I definitely recommend reading Owen’s book.
Last night I had a much-needed night with a good friend. A night away from the normal day-to-day to reconnect and be reminded of what is really important. An interesting analogy was brought up during our conversation about how a great relationship is like a great financial portfolio. Ponder this with me:
_You get what you put into it. Think of it like a mutual fund or an IRA. If you continue to feed and put money into the account it will continue to grow for you. If you leave it, and never watch or nurture it then it will sit and never do anything. The same is true for relationships – whether a friendship, or a romantic relationship, you get back what you put into it. Think about how you are investing, whether financial or personal.
_Over time your investment grows. I think of the friendships that I have had over time. Some continue to grow and others have a strange nostalgia that make us want to hold on to what we remember. Sort of like keeping money in a savings account. These days it does not really matter how much money you have in a savings account, you are not going to get much return on your investment. The friendships and financial accounts that are worth keeping will grow for us over time. Those that we no longer benefit from should be divested from our lives.
_Never put your eggs in one basket. You always want to make sure you diversify your friendships and your financial portfolio. It does not mean you must have a ton of friends. You can have a few that are deep and important relationships, but make sure you do not limit yourself. Shit happens, and sometimes that means that putting our eggs in one basket can devastate our future, whether pertaining to finances or our relationships. Diversify your friendships, so that you have different support mechanisms when something or someone fails you.
_Be grateful for what you have. Regardless of how many friends you have, or how amazing your romantic relationships are, be grateful for what you have right in front of you. We forget that our lives are often so much better than we can ever imagine, we just forget to look at the shiny spots. I imagine we all can be more thankful for the wealth we have in our life, whether via relationships or finances.
A happy evening, with much food for thought pondering ideas of wealth, gratitude, and all that we have right in front of us. Hopefully this makes you think about how you fuel your finances and relationships.
Allowances. I cannot remember for the life of me if we got an allowance. Somehow what I remember most is that my dad sometimes paid us in candy bars. Not your normal candy bar, the kind you sell for school fundraisers. He would buy a case (or maybe we had some left over). I distinctly remember the ones that had caramel in the inside. If we ever did get paid (even with candy bars) it was for chores we did around the house. Did doing chores and my parents never following through with an allowance teach me good ideals about working, money management, or spending money? Not really.
I started working when I was nine years old. I babysat, cleaned a neighbor’s house, polished their silver, and had a paper route. Yes, crazy to think I did that at the age of nine. I guess I worked just as hard then as I do now. My parents would have me put my earnings in a savings account, so I guess you could assume that they taught me about saving. The problem? My dad usually “borrowed” from my savings account never paying me back. I did not have the best money role models. Kids should be taught about money early on, and not be graced with everything with no knowledge or conversation that money does not grow on trees. Which is why I especially love this article from Slate.com titled: “You’re Doing Allowance Wrong.”
“Spending is about modesty, thrift, and the prudence to shell out (and even splurge) for things that bring kids the most joy while avoiding mindless outlays for plastic junk they will quickly break or forget. Saving instills patience in a world that increasingly conspires against waiting, delivering television without commercials and movies without Blockbuster. And giving is about generosity as well as gratitude for how lucky you are to be able to help others.”
The article goes into depth about giving an allowance, a budget, and a list of things they want or need and let them make the decisions on what to purchase. It means letting them fail. As the article states: “Better now then at age 24…” It teaches critical thinking skills, how to rationalize why one purchase makes more sense than another one. Many adults today do not have these skills. What if we started early on learning these life skills? We have gone away from being a saving culture, instead we spend, and rarely give. If you have kids what are your thoughts on this article + topic?
I am a personal finance fanatic. I grew up poor, and while for the most part my basic needs were met, I look back and never want to live the way we did. Nor do I want my children to live that way. What has that done to me? I have become passionate about personal finance, and how to be careful over what I spend my money on, how I save, and how I think about my future.
Which is what leads me to my blog title. There are a few subjects I think are taboo in our society. We rarely talk about our sex lives, and we rarely talk about money. Yes, we talk in surface ways about money, but never about how much we make, how much we save, and how much we feel most comfortable about having in our savings account. Why is that? I often wonder why it is such a taboo subject. Is it because comparisons make us feel like we are lesser than, or better than others? Possibly. What is funny, is you could live next to a run down home, that gives the facade that someone does not have the finances to keep it up, and maybe they do. Maybe it is just a choice that they live that way.
So, about checking accounts. Do you and your spouse or significant other have joint or separate checking accounts? I know that I will probably piss someone off today, as I am from the joint checking account camp. When Chris and I got married we decided to pool our finances, or rather I should say to be politically correct, we decided to pool our debt. We did not have much cash when we got married, we just had debt. Credit cards, school loans, you know normal twenty-something-year-old debt. Not too crazy, but still money we owed. So maybe it was easier for us to pool our finances, and make financial choices together. Would we have thought differently if we had plenty of cash in the bank? I hope not. Why? It works for us. We talk about everything, we discuss our purchases, and it all makes sense to us.
Yet, I know that a lot of couples fight about money. They fight about debt. Having separate checking accounts work for them, and I want to know why.
I can remember when I was nine I had my own paper route. I delivered the evening paper, which meant that after school I would come home, roll and rubber band each newspaper, load them onto my bike and begin delivering them. Rain, shine, snow, and slush. There were gross snow days where my dad would come home early and we would load up my papers in the back of his truck with the tailgate down. I would sit on the tailgate with my legs dangling and he would take me on my route, stop at each house, and I would jump off and throw the newspaper to its spot on the subscriber’s porch.
coin changer like the one I had for my paper route
I sometimes loved those snowy days, as cold as they may have been, just for the chance to hang out on the tailgate, and know my dad was there with me driving along. My money memory is from my paper route. I cannot remember if I actually got paid for delivering papers, or if the only payment was through tips. Each month I would take my collection book to each subscriber’s house and collect the amount they owed for the newspaper. Often I would get a tip. Tips ranged widely in amounts and really depended on who answered the door that day. The generous wife, the miserly husband, the kid who would just pay me the exact amount. Usually the best tips were around Christmas time.
It was a tough time for my family, my mom often worked many jobs to help ensure there was food on the table. I would give my parents my tip money so they could put it in my savings account, and many years later I found out that my parents were not putting it in my savings account, but that my tips were being spent. Maybe it was for the electric or phone bills, or maybe for the food on the table. It does not matter now, I will always remember that as my first money memory. Not the best lesson to learn, but maybe that is what has made me so careful with my money now.