Do you think our children have learnt from out mistakes?

ChopinonaBudget

In the spirit of avoiding doing the housework that so obviously needs to be done, I thought I'd take the opportunity to post a question I've been meaning to post for a good few days now.

Excluding small children who may understand the difference between pre-LBM and post-LBM by the differences in what gets purchased, or the amount of trips out etc etc, do you think our kids have less chance of getting into serious financial problems than people who have never been in debt crisis?

I'm curious about this as I try to be as honest and upfront as I possibly can to my daughter, and I explain to her about APR, the minium payment trap, payday loans, credit cards, loans etc (she ALWAYS reads the small print in the adverts before asking if such and such is a reasonable interest rate), and although she still fails to understand the difference at times between my Barclays debit card and my Barclaycard (understandable), she is pretty clued up about debt now. She even got into a heated "discussion" with one her teachers when he said that anybody could get a loan, (I think it was a lesson on finances, he was teaching them about interest etc) and she immediately corrected him and said no, not if you have poor credit rating, and not if you've had companies falsely placing defaults on your credit file. (Bright kid, mine, I'm dead proud!)
I like to think that after her seeing me panic for so many months about the rent being paid, and seeing first hand the stress and tears of not having enough money to pay the bills, that at the very least, she has come out of this debacle with enough savvy and knowledge to not make the same mistakes I did.

What does anybody else think?

DD265

I'm not sure - but I do think it's great that you're being so open about it!

I'm making the same mistakes as my parents. Would I have made them if they'd talked to me more about money? Maybe, maybe not! But I think being well informed is one way of avoiding stupid mistakes, and the rest maybe you just do need to make them yourself to learn.

ChopinonaBudget

DD265 wrote: »

I'm not sure - but I do think it's great that you're being so open about it!

I'm making the same mistakes as my parents. Would I have made them if they'd talked to me more about money? Maybe, maybe not! But I think being well informed is one way of avoiding stupid mistakes, and the rest maybe you just do need to make them yourself to learn.

Thanks, it's good to hear I'm doing the right thing with that!
I guess it is all down to the individual in the end, it's such a shame that your in the same boat now that your parents were in, but I suppose you're right; you'll never know whether you would have taken this path or not given more open and frank discussions on money.

My parents were the same, by the way, they never discussed money in front of me, although they are financially VERY secure so debt isn't an issue. I talk about money with my Mum now, (I had to, plus she lent me a lot!), but I think she really does still fail to understand why I didnt put money aside for a rainy day. I think she doesn't get it that when you're in the darkest depths of debt crisis, every day is a rainy one

happytails

I made loads of mistakes because my parents skimmed over things. Man am i paying for it now. They meant well but TBH id rather they did what you are doing. I got 'Never get a credit card EVER' and 'Save half, spend half', 'Never get a car on finance or a bank loan, the only debt you should have should be a mortgage...' ETC ETC Not very helpful. By the time i was 18 i was renting a flat with my Boyfriend (now Husband) and got an overdraft, didnt understand about the charges or going over the limit. Things got worse, took out another overdraft to try and correct it. You get the picture, i didnt tell my parents because i shouldnt have gotten one in the first place according to their lectures. We suffered on our own and got ourselves into thousands of pounds worth of debt before we were 20. Never managed to save a penny in that time either.

I plan on explaining how finances work and how banks work, APR/overdrafts/credit agreements etc to our kids as id rather them be armed with the right info and also be able to come to us for advice if they do mess up (to be read as 'advice' not 'bail out'.). They will be taught work ethics and pulling their weight around the house too, unlike my brother who cant cook more than pizza/a pre-made meal or operate the washing machine at 21.:o

I can see my parents were trying to help us not repeat their mistakes of getting into debt but without explaining their reasons or putting it into prospective it didnt make a difference except make me not want to tell them we were in a mess financially.

Sarah x

Treadmill

I am not sure that I have learnt myself yet :-)

unimaginative_user_name

I love the sound of your kid, OP! I would love to have been a fly on the wall in that maths lesson!

I often talk to my 12year old about money and since starting secondary school I've been concerned that she's getting more and more materialistic and brand conscious. At junior school she was happy with the cheapest mobile phone we could find, but now it has to be a smart phone. She used to be happy with cheap make up, but now she wants Estee Lauder!

She is constantly asking for stuff and doesn't know what's reasonable, and then goes into a strop when I say no.

I've been trying to get her to save for what she wants. In the past year she has saved enough for half the cost of a blackberry contract so I've agreed to pay for the other half. She's currently saving for half the second year of the contract. I'm trying not to give her everything on a plate while being sensitive to her not wanting to feel left out at school.

She has said that she will never get a credit card. She has a bank account with a cash card which she has been quite sensible about. However I am concerned that once she is independent financially her desire for the best things in life could get her into trouble.

ChopinonaBudget

happytails wrote: »

They meant well but ...... I got 'Never get a credit card EVER' and 'Save half, spend half', 'Never get a car on finance or a bank loan, the only debt you should have should be a mortgage...' ETC ETC Not very helpful.

Yes, I've heard that a lot by parents, and funnily enough by my ex, and you're right, it just means you hide all your debts. Plus, without help in the right direction, I don't think we learn about good versus bad debt, something I keep trying to explain to my daughter, and I hope I've got there.

We were talking about credit cards over the weekend (I think triggered by my recent success in finally garnering a shiny new 0% deal after a year of trying to clean up my credit file), and we were talking about how buying expensive electonics on a credit card can be a good idea as you get better insurance if things go wrong, but you must make sure you have means to pay it back. I told her I'd made a silly mistake when I bought her laptop as I should have bought it on the Barclaycard and then paid the full purchase amount off immediately, rather than paying out of the current account.
Also, sometimes, s**t happens, and when it does, credit cards can be a more flexible way of paying off stuff than a loan, and can work out cheaper than an expensive overdraft.

ChopinonaBudget

Treadmill wrote: »

I am not sure that I have learnt myself yet :-)

Hahahah! Funny! I think some days I feel like that too

ChopinonaBudget

unimaginative_user_name wrote: »

I love the sound of your kid, OP! I would love to have been a fly on the wall in that maths lesson!

I often talk to my 12year old about money and since starting secondary school I've been concerned that she's getting more and more materialistic and brand conscious. At junior school she was happy with the cheapest mobile phone we could find, but now it has to be a smart phone. She used to be happy with cheap make up, but now she wants Estee Lauder!

She is constantly asking for stuff and doesn't know what's reasonable, and then goes into a strop when I say no.

I've been trying to get her to save for what she wants. In the past year she has saved enough for half the cost of a blackberry contract so I've agreed to pay for the other half. She's currently saving for half the second year of the contract. I'm trying not to give her everything on a plate while being sensitive to her not wanting to feel left out at school.

She has said that she will never get a credit card. She has a bank account with a cash card which she has been quite sensible about. However I am concerned that once she is independent financially her desire for the best things in life could get her into trouble.

Thanks! I would have loved to have been in on that lesson too!

My daughter went through a phase of all this expensive stuff, it was frightening, and for various reasons I'm not really going to go into here (she had never been really allowed anything over the past number of years, and I was trying to make up for lost time), I acquiesed on pretty much everything. Also, she was in a school that had a horrendous academic record, and all the kids were hellbent on having THE latest fashions, gadgets, expensive bags, shoes, etc etc etc etc, and she was asking for stuff she didn't even really like.
She's now in a better school, and is able to focus more on academic stuff, and doesn't care less how much her clothes cost or whether her lunchbox juice is Tesco Value or not.
I hope your daughter grows out of this, it takes enormous strength as a parent to resist the demands of a teenager, and I'm seriously impressed with your idea for getting her to save for the contract
The make-up and stuff is more tricky. Personally, I don't buy make-up for my daughter, but I give her an allowance large enough for her to buy her own, and to buy clothes if she wants anything outside of the clothing budget, or she can save for big items is she wants (She just worked out this morning she has enough to get an iPad for Christmas with the combination of her eBay sales, saved pocket money, Chistmas money from me and my Mum in lieu of presents, and her saved birthday money (TODAY!):T
This means she has the choice of either buying really expenxive make-up (which she does very occasionally, she bought an eyeshadow palette for £35 with last year's Christmas money) :eek: (I didn't mind, it's her money, her choice, she knew the value of that £35 but chose to spend it on the eyeshadow) or lots of cheap stuff, or small amounts of cheap stuff which leaves her enough left to spend or save on other stuff (her option 99% of the time, hence the saving to buy iPad).

Good luck with your daughter, the teenage years are a really difficult time, especiallu when it comes to budgeting, but i found it helped to give my daughter a pocket money raise while at the same time telling her I would be buying less things for her. She then gets the choice about price ranges, and most of the time (;)) makes fairly sensible decisions.

I'm really wary of kids saying they'll never get a credit card, as they will at some point, that's almost guaranteed. (I know she's young, but this was the sort of thing I was querying). I'm trying to get my daughter to understand what Martin Lewis keeps saying time and time again, that debt isn't bad, only bad debt is bad, and I'm hoping that when she goes off to University she'll manage her money and her debts (which I've told her she will have, and it'll be a significant amount, but that's ok, she'll need a loan, probably an overdraft and maybe a credit card, if she wants to go to Uni, which she does) with some sort of capability.
Of course, I could be wrong, she could get to 18, get a credit card, be a total plonker, and end up where I am :eek:

Edit: I should mention here, my daughter's allowance isn't large enough to go clothes shopping every week! What I meant was that if she really wants something that we can't get on the budget, she can save for it, or if it's really cheap then she can buy it fairly immediately. The way I wrote that sounds like I give her a couple of hundred each month!!! :eek::eek::eek::eek::eek: