Time & Money – Lesson for Parents & Kids

The following blog will be using principles from a book I read recently entitled: Master Your Money by Ron Blue. 

After reading the above mentioned book, I wanted to see if some of the same things the author experienced would hold true in my life.  We often read things about how, what, where, and when to spend our money.  I wanted to run a little experiment and see if I had the same or similar results that the author experienced.  So here is what I am talking about and the conclusions gained and insights realized.

I have a seven year old daughter and wanted to spend some quality time with her, just her and I doing what she wanted to do.  She had earned some money for doing various chores around the house and making some great grades.  I used a lesson on Time & Money from the book, to see what would happen to me.  I told my daughter that we could go to the Mall and she would have $25.00 to spend on what ever she wished.  The only parameters I placed upon her was that our Daddy-Daughter date would be over when she had spent all of her money.  My daughter agreed and was rather surprised, and to say excited is an understatement.  So off we went to the mall…

Okay, to make the story short and not lose many readers I will let you know what happened without all of the boring details.  Instead of staying at the mall for hours going from store to store and looking at everything possible for $25.00, we where pretty much in and out within 30 minutes.  It turns out that my seven year old daughter did exactly what most kids do when you give them money to spend however they want.  They go and purchase the first “neat” thing they see and put no consideration into it’s purchase.  I thought I had taught my daughter better, but this lesson really taught me instead.  I need to do a better job about not only talking about how money works but also the repercussions of our actions when little or no thought is put into a purchase.

My daughter was totally bummed about not spending that much time at the mall.  She thought I would cave in and just stay up there anyway regardless of our agreement before walking in.  I held to my guns and left when the money was gone.  I was sort of bummed out as well.  I was looking forward to my above average (financially intelligent) daughter proving the typical stereotype wrong.  However, at the moment of purchase she was just like most people regardless of age.  She feel prey to the wants and desires of the moment.

We went home and she played with her $25.00 worth of “stuff” and was bored or had consumed it by the end of the day.  There was nothing fun left to do the next day with her purchase.  She had either consumed the stuff or used it to the point where she did not even want to play with it any more.  Now I really “get” why you should not buy a pet for a child until they can “really” take care of them.  So I got a lot from this exercise and now want to share it with you.

The first concept has to do with limited resources.  In this example my duaghter  had only $25.00 to spend.  She realized that once it was gone – it was gone, but only after it was gone.  She thought that good ol’ Dad would supplement her Daddy-Daughter date and bail her out.  Isn’t that what good Daddy’s and Governments do?  Okay, she did not say that but I had to throw a bone to any political readers.  My daughter has a better concept of limited resources now that we have sat down and discussed our trip to the mall.

The second concept is that there will always be more things to spend our money on than what we have available to spend.  Case in point, the mall.  Maybe for you it’s shoes, clothes, jewelry, cars, outdoors equipment, hobbies, or (fill-in-the-blank) but you will never have enough money to buy it all.  Get over it NOW and you may be happier in the long run – just my 2 cents.

The third concept is that our decision’s today effect our future.  If we make a decision to spend our money one way today, then it will have a direct impact on what we can spend our money on tomorrow.  A dollar spent today is gone forever and can never be used in the future for anything else.  Think about that one for a moment…not kind of final – but final.

The final concept is that the longer term the perspective, the better potential for wise decisions.  So when you take some time in deciding how your going to spend that dollar, then you will likely make a better choice for your actions.  Remember the last concept we discussed.  Once its gone – its gone. ($ Dollar $)

I hope you got as much from this lesson as I did the first time I read it.  I hope that those of you who have kids try this out and let me know how it worked for you.  For those of you without children, I imagine there is something here with this story that you can use as well. Take Care!!!

– Phillip

Who Influenced You?

We all have influences in our lives when it comes to the way we interact with money.  I imagine that most of us start to learn about money in some way when we are a little child.  I can not remember the first lesson that I was ever thought, but something had to stick along the way.  Perhaps my earliest memory in regards to money came from my Grandparents.  I am what you call a Gen Xer, my Parents are Boomers, and my Grandparents are from the Great Depression Era.  Like most folks who lived through the Great Depression, they were significantly impacted by the times they grew up in.  They were influenced by their environment and their unique situation.  Ultimately, they too were most likely influenced by their parents in the way they deal with money.  Funny, how things have come full circle (almost) in just two generations.

My largest influence in my life financially was my Grandfather.  I am writing this today because my family laid him to rest.  He has gone to be with the Lord.  All through the funeral I looked at all my family, relatives, friends, and others and saw that my Grandfather had influenced many people on this earth.  Besides being a great man whom I admired more than just about anyone, he taught me how to interact with money and people.  Even though I had strayed off for a while in my life, those influences just keep coming back.  I believe that many of those “life lessons” he taught me growing up have made me who I am today.  So what where those “life lessons” that he slowly taught me over the years.  Well, I will share a couple with you – and hopefully my Grandfather can still helps folks with what he has taught me.

He told me from an early age that if you pay God the first 10%, pay yourself the next 10%, and then live off of what’s left of your paycheck; then you can become monetarily wealthy.  Some folks say that is the way you can become rich.  He told me that some of the richest people he had ever met lived in a house with dirt floors and didn’t have two nickels to rub together.  I learned that there was a difference very early in life between being “rich” and being “monetarily wealthy”.  I realized today that my Grandfather was the richest man I had ever known. 

Now, there is a lot that can be said about the method above.  I do not want to turn this into a church sermon and lose some folks, but there is much wisdom to the second element to that formula.  Pay yourself first.  Seems easier said than done.  I know that in times like these it is ever more difficult to pay yourself first.  However, I believe that if you can just get there then you can start acquiring monetary wealth.  So even if you can not start now, then start as soon as you can.  Start off by saving 1% then 2% then 5% then 10%.  I know you may get discouraged at first, but keep on keeping on.  Over a partial lifetime or good number of years, you can save money that will help you in your golden years.  I know that it works, I saw my Grandparents do it over their lifetime.  My Grandfather was a construction worker and my Grandmother raised her Kids, and Grandkids, and anyone else who entered their home.  They made it through life and retired with dignity and lived off that money for 25+ years – my grandmother is still ticking and has money. 

The next important life lesson was that you treat everyone the same.  No matter how much someone has or does not have you treat everyone as equals.  You show everyone the same amount of respect whether they are monetarily wealthy or not.  If you see someone down on their luck, help them get back on their feet.  You give them a helping hand but not a hand out.  I always wondered what drew me into the Credit Union Movement.  I now know that it was from the teachings of my Grandfather many years ago.  The Credit Union Movement is all about “People Helping People”.  You can also say that we are not-for-profit but not-for-charity too.  Again, it all goes back to what influenced me.  

So that was who influenced me in life.  This affected the way I feel, act, and behave around money.  Who influenced you?  Please take a moment to respond at this forum.  Just click-on the Who Influenced You link above and reply with a message.  I would love to hear from you.

 

– Phillip