How I Saved a Small Fortune and Taught My Kids to Be Independent
How I Saved a Small Fortune and Taught My Kids to Be Independent
Smart Insights From Professional Advisers
My money-saving parenting strategy boils down to saying one magic word and saying it often: NO
It’s much easier these days to spend money on material things, especially if you can afford to do so. What’s worse is the peer pressure to keep up with the Joneses or their kids. Like many of you, when my wife and I grew up, a family dinner at Ponderosa was a BIG family night out.
I fondly remember the all-you-eat buffet and especially loved the chocolate pudding. I grew up in Arlington Heights, Ill., in a middle-class family of four. We did fine financially compared to our neighbors (the houses were all so much smaller back then).
I have succumbed to the peer pressure of keeping up with the Joneses more than I like to admit. If only I still lived in the nice three-bedroom ranch we first bought in Glen Ellyn for $220,000 I would have boatloads more money today! My mortgage would have been paid off years ago. I would already be financially independent had we not moved to a bigger, more expensive home. I probably would have been able to save close to 50% of my income today had we not moved.
IMAGINE BEING ABLE TO SAVE 50% OF YOUR INCOME!
Spoiling Kids While Living in an Affluent Neighborhood
Just living in an affluent town (DuPage County is in the top 2% for median income in the U.S.) makes it nearly impossible not to spoil my kids. Our kids know what they see and think that’s how everybody lives.
Where’s the reality check for them? How well are we preparing our kids to fly on their own and be financially responsible and independent?
I see myself as an example for my three teenage children. Believe me, your kids watch you and soak up like sponges the actions you take with your money. While I’ve been far from perfect in the frugality war, there are many things I am proud of. For instance:
I seldom give my teenagers money for entertainment or clothes — I usually tell them to use their own money from their summer jobs (they don’t get an allowance).
My kids had their own savings accounts since they were in grade school — I matched their deposits to encourage saving more money.
I keep cash in my pocket for almost all my spending at a register – this is HUGE! When we are at a store and they ask if we can buy … fill in the blank … I usually say, “No, I don’t have enough money,” which creates the concept that money is scarce. If I used plastic, my kids wouldn’t get that message. It’s worked great for me.
This summer all three of my kids had multiple jobs, some days all three were out the door before 7 a.m.!
I go out of my way to teach my kids that every retailer is trying to get you to part with your hard-earned money. The best way to do this is to not pay for your kids’ non-necessities. This might include buying them lunch, but not their drinks. They can get water or pay for the drinks themselves.
You might think I’m nuts and I am taking this to an extreme, but I’m trying to teach my kids to think before they spend. They usually go for water. I guess the soft drink isn’t that high of a priority after all.
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