Who teaches their children about managing money?

Drawingaline

My two teens have their own budget on my ynab. They have the app on their phones and have it set to their own budget and know not to move onto the household one. I am happy to share the household one, but need to be there to ensure no accidents happen!

They both have accounts, the 15yr old started to get an allowance on her last birthday. She has to save 10% of anything she 'earns' (she looks after her brothers in school holidays while I work, babysitting cousins etc) and this goes into a category labelled education. If she gets to 18 and chooses to work full time then it can be used for a car or rental deposit. She decides on her categories, but I no longer buy her toiletries or clothes (bar underwear) and so far she is managing well. Her face when she was looking at jeans in next next than primark and the realisation of some prices!

My teen son is going to be like his dad with money. Not great. But using ynab has focused his wants a bit. He gets £10 a month and money in school holidays when he comes out and works with me. 10% saved. He will get an allowance next Yr when he is 15.

The 10yr old and 7yr old have a line in my budget for birthday money and the 10yr old gets £5 a month. He will go up to £10 and get his own bank account and budget when he is 11. He is really tight with spending money, amazing how on holiday he would pick something up and 'need' it, we would look at the budget and say he had £50 (birthday money mostly) so he could treat himself, oh no it would go straight back!

I also discuss with the older two how much running a household costs. I like to think as a household we are pretty money savvy, my sister and bil earn double what we do and have had an interest only mortgage for years and have nothing saved. They are moving soon into a new house and will have a huge mortgage, I really hope they will stick to a new budget and not go mad kitting it all out.

Mrsn

Enthusiastic saver I wish I would have been given this sort of financial education/guidance from my parents. My mum spends it as quick as it comes in and my poor dad has a very small allowance as mum “handles the finances”.

Dads past retirement age and is still working and mum is due to retire in 3 years, they should be sitting in a very comfortable position but they aren’t and that’s down to mums spending and can’t take it with you mantra.

I spent years living like my mum and it’s only been the last 18 months or so where I’m trying my hardest to repair the damage that’s been done and to learn from past mistakes. It’s going to take time and hard work but I want my children 8 and 5 to learn the value of money and how to be sensible with it

enthusiasticsaver

Mrsn wrote: »

Enthusiastic saver I wish I would have been given this sort of financial education/guidance from my parents. My mum spends it as quick as it comes in and my poor dad has a very small allowance as mum “handles the finances”.

Dads past retirement age and is still working and mum is due to retire in 3 years, they should be sitting in a very comfortable position but they aren’t and that’s down to mums spending and can’t take it with you mantra.

I spent years living like my mum and it’s only been the last 18 months or so where I’m trying my hardest to repair the damage that’s been done and to learn from past mistakes. It’s going to take time and hard work but I want my children 8 and 5 to learn the value of money and how to be sensible with it

Well done for turning things around but I do feel sorry for your poor Dad. The can't take it with you, money going out as fast as it comes in philosophy is common I think. It is the reason some people do not think about pensions, take on interest only mortgages and do not save. Short sighted thinking. The thing is that financial security gives you choices, when to retire, where to live, time to do the things you want to. Financial independence. It won't be reached though without preparing for it.

girlatplay

I've always taught Little Miss Gap to manage her money. She got her first bank account with debit card when she was 11. She got weekly pocket money and had to make it last. She never once asked me for more money (probably because she knew there was none spare) and when she turned 16 she went out and got a job. I told her to put at least 25% of her wages each week into savings (she had no outgoings other than personal spends) so she did and now it's a habit.

She turned 18 at the end of last year and I helped her to get a credit card. This is because she has absolutely no credit history and I know that it can be difficult to get credit with no history. I have explained about paying it off every month and not spending more than she can afford.

My favourite thing was when she told me that her boyfriend is going on holiday with his pals and he is struggling to get the money together to pay it off. She said
"When he first told me about the holiday I told him to put away £50-£100 per month out of his wages and that way he would have the money there when it was time to pay. He didn't. Silly boy."
At that moment I felt my heart swell with pride. I must have done something right if she's figured that out.

izzy65

I was brought up to believe never have debt, my parents weren't great with money but saved for what they wanted, my dh came from a spend today what's tomorrow household his dad still works at 78 because he has too, my kids were taught about money unfortunately our eldest just doesn't manage , mortgage and bills are paid but a credit card has got out of control so we stepped in and got it on an interest free one now , dd on the other hand has +£30k saved for a deposit on her own house , both taught the same but sometimes it's down to their nature.

girlatplay

enthusiasticsaver wrote: »

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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.

My original debt was due to a relationship breakdown. My current debt is through choice and, actually, I could sell an asset and pay it off if I had to (I won't).

I sometimes think I have been harsh but your views and actions seem to be similar to mine and it's nice to know others think the same way as me.

enthusiasticsaver

girlatplay wrote: »

My original debt was due to a relationship breakdown. My current debt is through choice and, actually, I could sell an asset and pay it off if I had to (I won't).

I sometimes think I have been harsh but your views and actions seem to be similar to mine and it's nice to know others think the same way as me.

It sounds like you have given your daughter a really good start in life. Managing money is a primary life skill and if she is able to save and wait for things hopefully she won't be tempted by easy credit.

Karonher

My only comment about not taking it with you is that it sprang to mind today when a friend attended the funeral of her 57 year old colleague. She had been saving for and planning an amazing life for when she took early retirement in 2 years time.

Its one thing to not let debt take over, but as the future is not guaranteed maybe enjoy life a little as well.

trailingspouse

I always felt my parents went too far the other way. My father was a bank manager before he retired, and getting in to debt was anathema to him. You simply didn't do it (apart from a mortgage) - so he never talked about it. A discussion of when it might be appropriate to take on a bit of debt, and how to manage that debt would have been useful!!


But in other ways, he taught me valuable lessons. I remember when I was about 14, I was still getting weekly pocket money (30p - it was 1974). I felt that it should be increased, and raised the subject with him. I would have been happy for it to go up to 50p... He turned round and said 'How about £4 a month??' I was the first in my group of friends to get an 'allowance', and to have a bank account to put it in. I've never felt so grown-up as I did in that moment!!



As a result, I learnt to save, to budget (if I buy Jackie every week, I won't have enough for that David Cassidy LP...), but most importantly I learnt that it's OK to ask for a pay rise!!

Mnd

It wasn't my son who needed teaching about money management, he was just brought up understanding budgeting etc, it was my wife. She was clueless about managing her money when we met, and while she didn't owe any 1 creditor a lot of money, she owed a lot of people a fairly small amount of money.

Fast forward 18 years and she now is brilliant. Next, Amazon and New Look still hold their attractions but she realises that it has to be controlled.

The biggest single thing I think that brought about this change was making her responsible for the day to day spending money, I stay out of that and look after everything else