Who teaches their children about managing money?

Plumjam

My parents never had much money when I was growing up but they never borrowed for anything. They never talked to us about the cost of living or running a house (other than to say they had no money) and so, when I left home I classically got into debt to pay for my social life, holidays with friends and lots of clothes and 'stuff'. I had my lightbulb moment over 30 years ago and have not been in debt since other than a mortgage which is now paid off.
I have been educating my son about the cost of living and the pitfalls of being in debt. When the credit card bills were high (all the spending goes on cards for the cash back and rewards but is paid off in full at the end of every month), I would show him that the estimated interest was higher than the minimum payment so that if I only paid the minimum, I would be in even more debt without spending any more.
He now works in hospitality and so his hours vary. Every week, he pays me his housekeeping and then puts half of what is left into his savings and the other half he uses for his living / social expenses.
When I was 20, I had quite high debts - he has quite good savings!

engineer_amy

My parents had things quite difficult when they were younger, and when us 4 kids came along things were always tight. The only debt they ever had though was the mortgage. Everything was always saved up for. We knew not to ask for things during the year as our parents couldn't afford luxuries, but we always got what we asked for at Christmas and birthdays (because they had saved throughout the year)


it was only in later years that incomes improved and they could be considered comfortable. They only got their first credit card about 5 years ago and that was just because I advised them to get it for the extra protection while shopping online etc.


Their frugalness and debt free lifestyle rubbed off on myself and my elder brother - we only have mortgages and tend to save for things like holidays and cars. We are both accountants so its good that we manage money well. My sister and younger brother on the other hand are dynamite when it come to living beyond their means and are constantly paying their banks for being in their overdrafts.


I don't have kids, my older brother does and I am so pleased that he is teaching them to save. They know there is no such thing as "I want it and I want it now", they don't get it until they have the money. I was delighted when my 10 year old nephew asked me if I would take him into town on Saturday 21st September. I asked why such a specific date and why so far in the future. He told me he wanted a specific game for his Playstation and it cost £x. He told me of his plan of saving half his pocket money each week for the next 15 weeks, and if he added it to what he had left over from his birthday money, he would have exactly enough by the 21st September. I said if he saved all his pocket money, he would be able to get it faster, but he said he needed to buy a comic and a drink/snack at his rugby match each week, so could only save half. His words "cos I still need to live, aunty amy!!".
Beamed with pride at how sensible he is being at only aged 10. I can only hope my 5 year old niece will be the same when she is older!

cado1

enthusiasticsaver wrote: »

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.

How I wish my parents had the same attitude as you !

DCFC79

I wasn't taught it, pretty much taught myself but then Ive always been a saver, no extravegent spending.

I know various people who do spend frvilously, 1 spent £800 on a new phone oh and it leaves me short next month but oh well, there's no preparing for the future eg owning a property.

3011gillian

I feel like this is a difficult question.
Growing up my mum went from double income to single mum with two teenagers and two you get children. She literally lived for every penny and I remember her telling us to hide if there was a knock a the door (later realised this was the door to door loan man). We didn’t get pocket money etc so there was nothing to manage as it were!
Being on such a low income when it was pay day my mum quote rightly wanted a bit of relief and she’d let us buy Vimto and branded cereal that week ha ha!
Although she taught us to bake and have fun with things around the house she did keep a lot of the pressure of finances to herself.
When I went to uni and got a student loan and a part time job I was just so happy to have my own money that I wanted to enjoy it...3yrs later and things weren’t great financially and this continued with low paid jobs, bad spending decisions, redundancies and a £20k drop in income due to inflexible working options. We’re on the up now hopefully but what I think is you can only do your best in the situation you’re in. Good money management can help you a lot of the time but sometimes life throws you a curve ball and keeping your head above water.
Now we have two young children and I’m not sure what’s best to do in terms of savings/pocket money etc we talk about money more as a household but I’m worried about making them anxious and feeling the stress from my husband and I.

Greta_Sharbo

engineer_amy wrote: »

I don't have kids, my older brother does and I am so pleased that he is teaching them to save. They know there is no such thing as "I want it and I want it now", they don't get it until they have the money. I was delighted when my 10 year old nephew asked me if I would take him into town on Saturday 21st September. I asked why such a specific date and why so far in the future. He told me he wanted a specific game for his Playstation and it cost £x. He told me of his plan of saving half his pocket money each week for the next 15 weeks, and if he added it to what he had left over from his birthday money, he would have exactly enough by the 21st September. I said if he saved all his pocket money, he would be able to get it faster, but he said he needed to buy a comic and a drink/snack at his rugby match each week, so could only save half. His words "cos I still need to live, aunty amy!!".
Beamed with pride at how sensible he is being at only aged 10. I can only hope my 5 year old niece will be the same when she is older!

Love this!!

tori.k

It has its downside, we been very honest with our kids with finance if anything probably a little hard when they were young if they really wanted something outside of Christmas/Birthdays they would have to earn the money with chores and we meet them pound for pound, don't think I ever valeted my car the whole time they were growing up
Both of them managed to get part-time jobs when they were 16 as It paid better then Mum and Dad, So the more advance chats started happened about savings, pensions and compounded interest.
Was very pleased when one got his first ISA started and followed by starting a pension at 18, now the downside :rotfl: he's decided for the best rates he needs no less than a 20% deposit and has no intention of paying someone else's mortgage so staying at home until his has enough saved, with him also saving to pay his car insurance/ road tax in full each year with the kind of house he wants ( more a second purchased not first) I reckon he will be 35/40 before he cuts the apron strings :rotfl: may be easier for us to move out and leave him our current home.

tori.k

3011gillian wrote: »

Now we have two young children and I’m not sure what’s best to do in terms of savings/pocket money etc we talk about money more as a household but I’m worried about making them anxious and feeling the stress from my husband and I.

Just make it fun give them a calculator when your doing the shopping so they can add up, if you book a holiday get them to work out how much you have to save each week to pay for it, just get them used to handling money as we are moving to cashless and automated society these basic number skills are being lost.
As they get bit older they will see money doesn't stretch far, its far easier when they are small and a £10 is a lot of money.
when our kids were older we got them to think in hours of work, I still do this myself for big purchases im unsure about, is the thing you want really worth the hours you have to work to have it its surprising how unappealing some bit of tat became when its was worked out that they have to mow the grass or clean my car a dozen times before they could have it.
Its why I have a larder fridge and larder freezer instead of a big american style one I didn't want to work an extra 40 hours to pay for it :rotfl: