Difficulty getting children to save

I was talking with a co-worker the other day about teaching kids about money. She mentioned that she had problems getting her child to save money. In her experience, getting her child to save worked only when she and her child would fight. Her child wouldn’t save on its own, money given was almost instantly money spent, and her child had even lied to her about how much money her child would earn or be given. She was frustrated that she, a teacher, wasn’t able to teach her children the importance of smart money management. So she threw the question at me:
 

How do I make my kids save money?
 

Before we get to the answer, let’s look at what we are dealing with. First, let me say that I’m not talking about EVERY person in EVERY situation, but many people in this particular situation. If this isn’t you, congratulations! You are ahead of many of your friends. If this is you, don’t feel too bad about it, most of your friends who deny that this is them are lying to themselves anyway.

Any parent will tell you that you can’t make your child do anything. They’ll tell you stories going back in their children’s history about toilet training (or housebreaking, as I like to think of it- not a breeder), or getting their children to eat the right foods, or even about sleep patterns. These parents, after fighting for almost half a decade just to get their children to the point where they can function at school, often give up trying to teach about money and hope their children will pick up money skills somewhere else.

Then we send our children off to school where many teachers do their absolute best to get their charges to learn the absolute basics needed to move on to the next level. This is where I currently come into the picture. Let me give you a little picture of what kids are dealing with today.

Kids are given a worksheet for “Cornell Notes” that is pre-printed with much of the information they need to know already filled in.
The rest of the notes are displayed on an overhead projector with the teacher telling kids “Write down where your notes say subtopic that calls for random bullet point>.”

In English and History classes, kids are no longer required to READ FROM THE BOOK!! That was so big it deserved two exclamation points. When many parents were in school, you had to read from the book. Now, textbook publishers include .mp3 files or cd’s with all the reading so a teacher can just play the file and the kids just sit and read.

In many districts and schools, teachers are required to teach a specified list of topics by the state, leaving little to no room for financial topics.
Many teachers would love to teach many different topics. For several reasons, whether it’s about money, time, experience of the teacher in different skill-sets, or whatever else, we too often run out of time with your children before we run out of mandated education topics.

At the end of the 12 years of mandated education, we are lucky if we did our job and created an adult that is ready to function in society at large, hold down a job, and maybe even move on to higher education (if we’re lucky)!
 

Still not hearing solutions, Stanton!

This is where it gets a little more difficult. The key to making financial education for kids easy is catching them when they are young. My friend had a kid that was a little older, so she has to come up with other solutions. Here are a few. Some are going to be more difficult than others, and some are going to seem too far outside of your parenting philosophy. Hey! I’ve never claimed to have the only answers. If you have something that works better, or even something different that also works, feel free to chime-in in the comments.

Don’t give them a choice!  Remember that you are the parent, and should be able to set the rules for how money is handled in your house. If teaching your children to save for long-term goals is important to you, then your children are going to save for the long-term, because they won’t know that there is another option. If tithing is important, then your child will tithe because that is all they will know. If they start fighting you, trying to avoid your priorities, or making your life difficult, take whatever money they might have and put it in a savings account for when they are mature enough to follow the rules.

Start as early as possible!  The earlier you start your children down the path of learning financial responsibility, the harder it will be to break the habits you instill in them.

Reinforcement, reinforcement, reinforcement!  Both positive and negative reinforcement has their places here. Let’s say you do the three piggy-bank thing that is the current flavor of the month when it comes to teaching young people about money. When your child puts money in each bank accordingly, without being prompted, make a big deal out of it! Tell them how proud you are that they are becoming more mature and responsible. Kids have a need to please adults. On the flip side, when they do something inappropriate with their money, there has to be a consequence. If your child raids their “bicycle” savings account to buy a Selena Gomez poster, you need to temporarily take away their ability to access that money and maybe even the poster until they have replaced the money.

Communicate openly and honestly!  Talk with your children about the importance of learning to manage their finances. Make sure you keep the conversation at a level that their individual development can handle, but make sure you communicate. Be honest with them about difficulties you might have had or setbacks you might have had in the past and your desire to make sure they don’t repeat your mistakes. Also communicate the feelings you have had when you have experienced success with money issues. Finally, talk to your children about the way they might meet financial challenges, and work your way through the hypothetical. You want to make your children comfortable about talking with you about financial issues so they will still feel comfortable when they are older and might need your advice.

Feed their curiosity, even if it isn’t as deep as you want it to be!  Expose your children to as many possible views on money management as you feel comfortable exposing them to. Find blogs like this one, or others that you might read, and read them with your children. Make it a thing. For example, I post on Fridays. I do this so people have a whole weekend to peruse my posts and not interfere with their weekday schedule. Maybe you and your children can read and discuss my latest post on Saturday, over breakfast. You spend some great quality time with your kid, they get to learn something, and you both have something in common to discuss. Warning! Sometimes the language here gets a little saucy. I try to keep it PG-13, but every once in a while it gets worse. I try to let you know when that is going to happen ahead of time, sometimes what I consider PG-13 and what you might consider could be different.

While we’re at it, find a book by someone who can teach your kids about finance and have a “book club” within your family.  Find times to read and discuss the book.  If I might make a suggestion as to which book…,

  

Whatever you do, don’t give in to the frustration that comes with trying to teach some kids anything!  I get it.  It’s frustrating, but once they get it, everything is magical!  Teach them well (sounds like an intro to a song!)  Enjoy!

Allowances: In favor of not giving them at all.

Last week, a reader asked a question about giving allowances to children. I deliberately didn’t answer it at the time because I feel this is an important issue that has a lot of potentially correct answers. I’m going to spend a few posts talking about some of those answers. If you want to share your experience as either a kid or an adult, send me an email at wil@finance4youth.com. Maybe your experience will help somebody else who is struggling with this issue.

The first stance we are looking at is the one that my parents adopted. They just didn’t pay an allowance. Not no way, not no how. If we wanted to buy something, we had to ask our parents and they would make the decision on whether or not to buy it for us. As a kid, this method sucked! As a parent with a whole gaggle of untrustworthy kids, this was most likely survival.

See, in their minds, they were responsible for us. That meant providing for our needs, and deciding on what wants of ours were worth providing as well. They believed that giving money to kids opened up many large cans of worms that they didn’t want to deal with. They also believed that if we wanted money of our own to spend, we should do what they did and get a job. That is exactly what we did.

When we were young, all of us had paper routes. For those reading this who are too young to remember, there used to be a thing called a newspaper. Think of it as the news.google.com of the day. Back in the day, young teens would go to a specified drop-off point, take tons of these newspapers, put them in plastic bags, and deliver them to the front doors of the neighborhood. This was all done before daylight so that when people would go out in the morning, their paper was waiting for them on their front steps (or in the bushes if they didn’t pay regularly, or even strategically thrown on the nighttime leavings of a dog if you were a particular a-hole!). Even I, as a VERY young man who still had training-wheels on my bike, was up when it was still dark, separating and delivering papers! Granted, I was basically tagging along with my mother and brothers, and given just enough work to feel like I was part of something, but at least I was part of something!

When we got paid, my parents would take all the money and bought savings bonds in the name of whichever child had earned it. The rule was that once one of the kids a) reached 18, and b) had enough money in a savings account to match the face value of the bonds, they would receive their bonds. This was my parents’ way of helping us prepare for a future with down-payments on cars, houses, college tuition, marriages and possibly even divorces. Okay, when I say ALL the money, what I mean was all the money they were given. While I was too young to collect from “my” customers, my brothers would collect from theirs, and would shave a little off the top so they had some flash cash. I’m sure my parents knew, but they never said anything about it, and life went on. Additionally, several of my older brothers took on other jobs in the neighborhood and didn’t tell my parents about them. Again, I’m sure my parents knew, but didn’t say anything. After all, this was the lesson they were trying to teach us.

Fast-forward to when I was 13 or so. I told my parents that I had an after-school activity that was going to look good on college applications. What I didn’t tell them was that I had gone to the mall, lied about my age and got a job (back then, it was so much easier to do things like that. Employers weren’t nearly as sophisticated with checking Social Security records or anything like that). It was a crappy job, but it paid a little above minimum wage. I kept it until I got fired because my parents had gone to the mall and my boss caught me trying to hide from them.

The bottom line:

My parents were successful with their method of teaching us the value of money and work. Of course, there were sacrifices made. Their kids weren’t honest with them about money, which I believe is very important. I teach people that being honest about money is the foundation to good financial literacy. Maybe I give them too much credit in assuming that they caught on to everything my brothers and I did behind their backs, and my parents had no clue that we all did things for money that my parents wouldn’t have approved of.

They also taught us a lesson I’m sure they never intended to. We learned how to hide money. We got good at spending only enough money to buy things we wanted, but not enough to raise questions as to where the money came from. We certainly never invested any of it ourselves, or even put it towards savings. My older brothers bought stuff that they didn’t need and really only kind of wanted. When I was older, I definitely bought stuff I didn’t need, or even a little bit want.

Finally, by not allowing us the opportunity to enjoy the money we did give them, while they did help us prepare for our future, they also took away the incentive to work. Why should I bother working at all if I don’t get paid for it at all? Not even the satisfaction of a job well-done. I believe not experiencing that incentive to work and do a good job tainted my ability to enjoy later jobs and to do well at them. I’ve certainly made up for it in later life, but I sometimes wonder if all my brothers did. To them, work was something you did for no reward whatsoever.

So, should you forego giving your children an allowance like my parents did? The answer is that it depends on what your goals for your children are. For my parents, their goal was that we learned to work for every dollar we earned, and to earn every dollar we had. In that, they were successful. Do the trade-offs they had to make bother them? I don’t know, but I think they would be okay with them knowing the end result they achieved. Are you willing to make those same trade-offs?

The girls in this video seem to be having a lot of fun, and are actually more like what I picture when I hear this song than the original.  Enjoy!