Most of us learned about money management from our parents – whether they intended for us to learn from them or not.
In a previous blog entitled, “Your (and Your Spouse’s) Financial Philosophy May Determine Whether You Get a Divorce,” I talked how different financial philosophies (and sometimes the lack of any financial philosophy) can cause a divorce. But when you think about it, all of our financial philosophies (or again, the lack thereof), are mostly a result of what we learned or saw from our parents’ philosophy about or handling their finances. That is why this is such a fundamentally important issue – this can be a self-perpetuating multi-generational problem or gift that our parents and their parents, and so on and so forth, have left as their legacy in our families, just as impactful as their genetic impact.
Most all of us learned about money management (or again, the lack thereof) from our parents – whether they intended for us to learn from them or not. All kids, from preschoolers through adulthood, watch how their parents model money management – their financial philosophies. If families are poor, but the parents model living within their means, those children may grow up with a healthier financial philosophy and peaceful feelings about money than a wealthy family who is always living on the brink of financial ruin. Those wealthy parents may think they are giving their children a great gift of affluence, but if they are stressed about money, trust me, their children sense that.
Remember the case about Ethan Couch, the teen who’s criminal lawyers claimed the defense of “affluenza”?
His mother wanted to provide a lavish lifestyle for him that resulted in his never being held accountable for his actions, and eventually, that resulted in him being convicted of manslaughter for killing three people while having 3 times the legal limit of alcohol in his system (in addition to being under age) and ending up in the Texas penitentiary (and so did his mother, who took him and ran to Mexico to further escape any accountability). While that is an extreme case, we all know of people who spend their lives in debt and running from the problems, both financial and emotional, that come from a lack of learning accountability and developing a healthy financial philosophy.
So, parents, now is the time to help your children develop a healthy financial philosophy that will be an ironic gift that came from the whole COVID-19 outbreak.
Now is the time because many of you are at home more with your children and they are at home with you – probably not wanting to participate in conversation or activities with their parents. But remember, you are STILL the parents, and now is the time to convince your children by your modeling and teaching that this IS the best opportunity for them to learn this valuable lifeskill. You and they will be the better for it coming out of this financial crisis and far into the future. Please seize this opportunity and use it – you will never have another opportunity quite like this one to help them learn these lessons.
First, it’s ok to share with them that you are stressed, even fearful, because this Coronavirus has thrown you a financial curve.
Kids need to know that their parents and the world won’t always be there to rescue them. Then, I think it’s ok to share with them that from 1929 and for several years after that, our country suffered from the Great Depression, and at least in my family’s case, they stood in lines for milk (actually, it was canned formula) and other government issued food (one in a while they got a government issued can of meat), but they mostly lived on pinto beans. And a funny side note is that, until the end of her life, my grandmother continued to regularly cook and feast on pinto beans.
Looking back, that seems kind of funny – why didn’t she loathe pinto beans? After all, she had to get sick of them through the Depression, but instead, her philosophy was that they were delicious and saved her family from starvation and malnutrition. So, instead of being bitter about all the years she lived on them, she savored them for the rest of her life, and what’s really interesting is that she and many of her friends and relatives from that era, of little or no meat or processed food, lived healthy lives into their late 90s – hmmm – makes you wonder when our up and coming generations are having, for the first time in history, a decrease in their life expectancy from the previous generation.
So, parents, here is my offering. At the end of this blog, I am going to give you some resources to help you use this time at home to give your children the gift of a lifetime, financial literacy/knowledge and a great preventive from one day getting divorced. When my children were getting ready to go to college, we “persuaded” them to attend the Dave Ramsey, “Financial Peace” course with us. We did this because we wanted to go, but more importantly, we entered the workforce in the early 1980’s when the philosophy was, “if you can dream it, you can charge it.”
Contrary to our parents, we have had credit card debt most of our adult lives, and we DO NOT want our children shackled by that.
The funny thing is, while we didn’t think they were paying any attention, we now see that they do NOT have credit card debt, or at least they have very little and they are much better money managers and more frugal than their parents (we) have ever been. And one of them cooks different kinds of beans every Sunday night and eats on them just like his great-grandmother did! And he happens to be the healthiest member of our family. So, I think, somehow they heard what Dave Ramsey’s course taught, even if we thought they were not listening.
While I don’t always agree with all of Dave Ramsey’s philosophies, I think his programs are a great informational option; he is his website for resources available to teach these lessons to your children. They are pretty reasonably priced. Here is the Dave Ramsey site for Middle School, High School, College and Home Schooled (and who isn’t that right now?) kids. And here’s the one for kids 3-12, called “Jr.’s Adventures.”
Right now, many people cannot even afford those programs, so I have researched some other programs for you that are even free. Earlier this year, Paul Schattenberg had an article, called “Teaching Kids About Basic Money Management Skills.” That article has another website, the High School Financial Planning Program, which has free resources, and that took me to the National Endownment for Financial Education, which is a national program with free resources and information, including an article entitled, “With this Financial Crisis, Does Financial Literacy Even Matter?” Of course, we all know it does, now more than ever.
With every financial crisis, divorce rates go up. Don’t let lack of Financial Literacy or Philosphy cause those divorce statistics rates to include you or your children.