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Teaching Kids

Teach Your Children Well

Teaching your children good personal finance habits is one of the most important things you can do as a parent. Teach your children well.

LMM Wasn’t My First Lesson

It was a dark and stormy night in an early 2014. The wind howled; the thunder crashed. Lightning lit up the sky and suddenly, I had a terrifying realization: I knew nothing about investments.

Okay, so maybe that’s not quite how it happened. It was a terrifying realization, however, because I had just taken and aced a class at my university called “Investments”… and there was essentially a “Part 2” coming up in a few months – a class that built on the things we should have learned in Investments. But I hadn’t retained much from the first class.

I turned to my cell phone’s podcast app in hopes that someone could help fill in the blanks. I stumbled through a few key word searches, and clicked on LMM out of sheer curiosity – how on Earth could a personal finance podcast have the explicit tag?!

Podcasts were fairly new to me at the time, but listening to money talk wasn’t.

I Started Young

Throughout grade school, it was a sure bet that my mom would pick me up with either classic rock or Dave Ramsey on the radio. The “Hi honey, how was your day?” conversations would wait until the commercial.

Even that wasn’t my first exposure to personal finance or money in general. As my childhood best friend likes to remind me, my Barbies paid taxes. It didn’t seem weird at the time to color sheets of printer paper with a green colored pencil, cut out tiny rectangles, write a number on each one, and use them to buy the new outfits or shoes. (Barbie switched to a credit card – paid off in full every month – when I ran into the issue of the money not fitting in the tiny plastic purses.) It doesn’t seem weird now, either. It just explains a lot about my personality.

Thanks Mom And Dad

My parents’ behavior explains the rest. I’m becoming increasingly aware that my parents taught me more about personal finance than is the norm. While this makes perfect sense hindsight, I don’t remember ever feeling like they were teaching me that particular skill set.

This is only reinforced when I try to figure out what, exactly, my parents taught me that everyone else’s parents didn’t. It’s taken me an embarrassingly long time to come up with the conclusion that it was their entire attitude towards money that set me apart from my peers.

I’m so beyond lucky to have parents that figured it out before I was born. They got all their ducks in a row, and I got all the benefits of that (and there are A LOT of benefits to that).

The Difference

I’ve been taught money management literally my entire life. Every dollar I was given (birthday presents) or earned (chores) had to be split – half went to savings and half I could spend. Most of the time, it all went into savings, because I didn’t need it.

That’s not all that unusual. Lots of parents teach their children to set money aside. The difference is, normally it’s earmarked for a “big purchase” like a high priced toy or something. Mine was for my future. To this day, my mom’s most repeated piece of financial advice is “Pay yourself first”. Of all the things she and my dad have taught me, that’s the bit they hope I remember the most.

My parents used to get fake checks in the mail from banks wanting them to open an account. They didn’t want them, so I’d collect said checks and look for any excuse I could come up with to “write a check”.

The excitement and joy I got from this experience is hard to put into words (nerd alert, I know), but the point is that without any real prompting, I learned how to write a check before the age of 10. I still write a check to pay my credit card bill, though the excitement is diminished slightly knowing that actual money is going to come out of my actual bank account.

A Love Of Accounting (Really)

I’m currently 22 years old, living at home because it made financial sense (and also my parents make dinner when I’m studying for a test). I’m 10 months from an MBA after having gotten my Bachelor’s of Business Administration in both finance and accounting.

Prior to that, I did three years of high school competition in three different business clubs, competing at the national level in accounting subjects. Despite the “Barbies paying taxes” thing, I actually got started in all of that when my mother’s suggested that taking an accounting class “Would be fun!”… and then by not wanting to disappoint my accounting teacher when she asked if I’d join the two organizations she was in charge of. (Great job, Cassidy. Admit that you are where you are because you have a hard time saying “no” to people.)

Truthfully, it was the best thing I could have done. By this point, my dad owned his own air conditioning business and my mom did the bookkeeping for it, so I was and had been exposed to the language of accounting for many years prior to being a 15-year-old high school sophomore. When anyone asks how I got started on the business track, that’s the party line. In reality, the foundation was laid long ago.

An Unconventional Romance

My parents got married because of a Grateful Dead concert. My mom was an airline ticket agent so she and immediate family got to fly on non-revenue standby passes (you don’t pay for the flight, but you also only fly if there’s space on the plane).

My dad wanted to fly to the concert but didn’t want to buy a ticket. So he and my mom got married so he could use her airline perks! Romance isn’t dead!

My dad tells me that he finally made an appointment to get married because he didn’t want to lose $12.50 – his half of the cost of the marriage license. There was no white dress, no venue, and no invitations – just them and the Justice of the Peace.

My mom remembers that afterwards, they dropped a car part off at the post office, went out to lunch, and then literally took a nap. (Years later, when I went through Sunday school and got to the First Communion ceremony, they got married in the Catholic church in jeans and Harley t-shirts, with church employees as their witnesses. I didn’t know about it until I got home from school.)

You Say Cheap, I Say Frugal

That story usually gets a laugh, especially from people that have met my parents. Unfortunately, not all of their decisions get the same reaction. They’ve been called cheap by close family friends, sometimes said to me in an almost pitying tone, like I should be ashamed of it.

Cable TV was gone long before I was born. We’ve never been to Disney as a family, or taken a vacation that didn’t involve seeing relatives. My mom drove her last car for 18 years, until it made funky noises and the paint was peeling. (The inside, however, was still perfect.)

I can remember wishing sometimes, as a middle or high school student, that my mom didn’t drive a car that looked so old. It wasn’t that I was ashamed or embarrassed… I just got tired of explaining to judging classmates that the car still worked and therefore didn’t need to be replaced.

It should be noted that I wasn’t deprived as a kid. I had toys and gadgets. I did gymnastics and dance for as long as I wanted. My parents threw great birthday parties, and didn’t try to cut corners to save a few bucks.

They did, however, both get creative, which usually resulted in DIY contraptions instead of the store-bought alternative. (For one birthday, we used an old sewing machine base with a pottery wheel top to make one of those cool spinny paint art machines. Huge hit, zero dollars.)

They were always more concerned with what something was worth than what it cost, and I learned the difference. I remember wanting a toy, and showing my dad after a couple weeks of thinking about it. It was $20, and I thought my chances of getting it were pretty slim.

Twenty dollars was a lot of money. I told my dad why I wanted it and promised that I’d use it and he agreed to buy it. My entire world shifted at that moment with the realization that purchases should be made with the backing of thought and reasoning.

Sometimes, I honestly forget that most people don’t live like we do. We have one TV, and it’s 12-15 years old. Up until last year, we recorded everything on VHS tape (and sometimes still do, if it’s something not worth using a DVD).

My parents both use pay-as-you-go flip phones ($100/year for each of them, with more minutes than they’ll ever use). They bought our microwave in 1981 and it still works perfectly. The business computer runs Windows 95 and isn’t connected to the internet. We don’t have caller ID on our landline. My dad uses a pager for work. We go out to eat once every few months, maybe, if we really feel like it.

Anniversary presents aren’t a thing in my house, along with birthday and Christmas gifts (now that I’ve aged out of the morning rush of presents). Things are reused whenever possible, and saved if there’s a chance of needing it in the future.

I say all of that to preface the real point here. My parents choose this way of life. They’re not cheap; they’re frugal. They’re not living this way because they can’t afford the alternative. They saved like crazy and paid off their house early, eliminating $60,000 in interest payments as a result.

They don’t replace appliances, or vehicles, just because they’re old. Having the newest piece of technology isn’t just unappealing to them – it’s downright undesirable. They don’t think in terms of monthly payments; they think in terms of total cost.

Credit cards are paid off in full every month, $27.99 is mentally rounded to $30 when comparing prices (and comparative shopping is always done), and the sales rack is my mom’s first stop when shopping.

I accidentally dropped the lens cap for my camera down an elevator shaft once and my dad got the maintenance man to get it, because five dollars is five dollars. My mom had a car payment once 30 years ago, for about a year, to build up her credit score.

When we joined the same gym, she paid for six months; I gave them my credit card. (You can probably imagine how that one turned out – her getting out without an issue, and me being charged for over a year without using it. I learned my lesson.)

My parents have never had a sleepless night wondering if they could pay the bills. They’ve also done everything in their power to make sure I can – and choose to – live the same way.

My Message To Parents

This isn’t a story about winning the financially savvy parent lottery. It’s a plea to parents – and future parents – everywhere. It’s a call to people my age and people that aren’t my age. It’s meant to be the opposing voice, telling you that you don’t have to follow the social norms.

In fact, you probably shouldn’t. Money and finances have always been an open topic in my household, especially regarding the business. We ate dinner together – around the table, not the TV – and talked. It was never a lecture on personal finance; it was simply another topic.

In my lifetime, they never lived depending on the next paycheck. In fact, I only realized that my mom got paid every two weeks when we used it as an excuse to get frozen yogurt (a tradition that didn’t last too long).

I grew up with my mom frequently giving away her hours at work. She didn’t much care for the “you work for me, I’ll work for you” trade – she just wanted more time off. My mother values her time more than her paycheck. Due to the low expense life my parents live, and the saving they’ve done up to this point, she can afford to not get the full 40 hours every week.

She’s actually done the math recently to figure out just how many hours she has to work in order to qualify for the full-time employee health care prices. If that freedom is the reward for being “cheap” in the eyes of some, I’ll take it any day.

I’m not the only one impacted by the lifestyle choices my parents made. I’ll leave you with an actual lesson, this time from my mom to one of her coworkers. The coworker was recently engaged and thinking about getting an apartment of her own up until the wedding.

My mom suggested that she stay living at home, since the lady wasn’t having issues with her family and save the money she would pay in rent each month. The coworker did so, and a year or so later, came to my mom amazed at the amount of money she had been able to save. It’s all in your way of thinking.

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