Who teaches their children about managing money?

enthusiasticsaver

My Dad was very debt averse. Neither a borrower nor a lender be was his mantra. He was a high earner but he never threw money around and he was adamant we should stand on our two feet financially so I think that taught me to manage my money well. I got a part time job at 16, saved a percentage of my wages and have avoided debt beyond a mortgage, the occasional low interest personal car loan or interest free credit card usually paid off within a year maximum. Any extra income we got was divided between short term, medium term and long term savings.

We have tried to pass the same lessons on to our now adult daughters and in general they seem to follow the same path. We maybe help ours out more financially due to high housing costs and high cost of childcare and simply because we can afford to. I have drummed the dangers of over extending themselves debt wise until they are probably sick of it but I like to think that the warning has not fallen on deaf ears and they will stay financially solvent.

So my question is who passes words of wisdom or warnings on to their children?

We gave our daughters allowances/pocket money from age 12/13 and opened savings accounts at birth. When their allowance was gone we did not step in. They had to wait until the next allowance date. I think that taught them about budgeting.

We encouraged saving and for expensive school trips or for more expensive items like phones/laptops we made them save a proportion usually half and we would pay the rest. That way they learnt the art of saving and waiting for things.

We encouraged them to get part time jobs at 16 and they both worked in school holidays, weekends, sometimes evening after school and through university. They certainly learned the work ethic and my eldest was doing three jobs at one point saving for a car. It also taught them that doing those low paid jobs is hard and gave them an incentive to do well at school to get better jobs.

Finally at 18 I encouraged them both to apply for a credit card but stressed it was to help them learn to manage credit sensibly. It was there as emergency money as they were both travelling on holiday with friends and had cars so having a credit card as a backup was a necessity and they had already proved they were able exercise some self control on spending.

Did anyone else pass on financial nuggets of wisdom and for those in debt do you think your debt arose from the way you grew up and your parents attitude to money? Do you think I was maybe too harsh with our daughters? Both of them now say they think we were right but at the time I know my DD1 had friends who got EMA without having to work as their parents were low earners and I wonder if we should just have given them money.

MallyGirl

We have certainly taught DD about money. Her pocket money had gone into a bank account with a debit card since she was 11. Once I linked Amazon to that rather than my account she discovered the joys of 'free teen fiction' for her kindle! Now she gets a clothes allowance in the same way (via SO).
We have not pushed the part time job idea as she plays a lot of music and volunteers at an animal rescue every week. She does expect to get one at uni though.
We have saved CB (when we got it) for her into a secret account which she will get at 18.

nancmat

Great subject wish schools did more about budgeting too. Do you just give you daughter a clothes allowance & pocket money or does she earn it?

At Uni will she then have the skills to help her budget?

enthusiasticsaver

nancmat wrote: »

Great subject wish schools did more about budgeting too. Do you just give you daughter a clothes allowance & pocket money or does she earn it?

At Uni will she then have the skills to help her budget?

I think that is critical. Both my DDs knew people who blew their whole student maintenance loan payment for the first term within a week or so of receiving it and then had nothing for rent/food/travel or books for the next three months. Crazy to expect kids who have never handled that sort of money to be disciplined.

couriervanman

Well my wife's sister & husband were never taught money advice as it goes through their hands like water
They have about £60k coming after tax.live in a £180k house in the north west that looks like a building site/stinks of dogs/never hoovered or cleaned and they literally haven't got a pot to p...s in,and struggle to pay the mortgage every month
She will go out and buy pointless cr4p for the house and looked at me as if i was an alien when i asked how often they changed gas/electric supplies.......(same supplier 11 years standard tariff)
A so called family friend.....ex financial adviser has talked them into borrowing more money to renovate the house which will end in disaster,unfortunately their daughter displays the same blase approach to money.When we go and see them its comical watching them hunting around for money if we go to the local pub

strawb_shortcake

We've drummed it in to our 3 children (10, 14 &15) that if you can't afford it you can't have it. They have savings they can't touch, savings they can (but don't) and spending money. The 15 year old is currently saving for a suit of armour for his last day of 6th form. We explain the dangers of debt and living beyond your means, I just hope it sticks.
My siblings and I were all bought up the same and each of us have different attitudes to money with myself most similar to my parents. My siblings could do with spending a month on MSE!!

MallyGirl

nancmat wrote: »

Great subject wish schools did more about budgeting too. Do you just give you daughter a clothes allowance & pocket money or does she earn it?

At Uni will she then have the skills to help her budget?

There are no specific conditions to getting the money - she cooks some meals, gets texts from me to pick up milk (or whatever) on the way home from school, does the washing if she spots a full wash bin, feeds animals, that sort of thing. She works very hard on schoolwork and music practice - when she has neither then I can always find something for her to do.
We have talked about budgets - she has already experienced her card being rejected as she didn't have enough in the account and was mortified so I don't expect that to happen again. She is in lower 6th so nearer to uni time we will discuss money matters with more specifics. We will have to top up her maintenance loan and it is a 5 or 6 year course so she will be very aware of the support she is getting from us. Both myself and DH grew up in very low income families so she has heard much talk about being careful with money / saving for the things she wants.

nancmat

That's great, we definitely need to be open & talk to our children about money. Sounds like you are getting the balance right.

We have a 9 year old and really should be doing more in terms of showing her benefits of saving up for things.

Karonher

nancmat wrote: »

Great subject wish schools did more about budgeting too. Do you just give you daughter a clothes allowance & pocket money or does she earn it?

At Uni will she then have the skills to help her budget?

I think schools would love to teach about budgeting, but when many primary schools have to teach children to use a knife and fork, tie their shoe laces and undress/dress themselves for PE, and many other things that parents should be doing, they don't have the time.

By the time they reach secondary school they are playing catch up with school work so unless it is part of a specific subject I cant see it happening on a wide scale any time soon.

Nick_C

"Who teaches their children about managing money?"

- all good parents!

enthusiasticsaver

Nick_C wrote: »

"Who teaches their children about managing money?"

- all good parents!

What happens if the parents were never taught though? Is it a self perpetuating cycle where if the parents are bad with money so are their children? My parents were good with money and I like to think I am and my children due to skill sets we have passed on. Is there anyone on here (presumably money savvy as this is a money savings site) whose parents were bad and they have learnt their skills elsewhere? If so who taught you?

I would hesitate to say any parent who doesn't teach their kids to handle money is a bad parent. It is more complicated than that. I am sure there are many on here battling high debt so do you discuss it with your kids? Older ones, that is.