To my regular readers or those reading through my posts in a chronological manner, I apologize for not following a more linear path when discussing how I’ve handled my approach to children and finances.  Events happened recently to bring our current financial policies for The Daughter to the forefront of my thinking.  I thought, too, that this current “snapshot” might provide some balance to last week’s Kids & Money post:  Putting Baby on a Budget?.

As I wrote last week, due to my educational philosophies I chose to delay my children’s exposure to financial matters.  To recap, we waited until our children were 7 before starting an allowance and we waited until they were 8 before allowing them opportunities to spend money.

Let’s fast-forward to what my now 15-yo daughter’s financial education and exposure looks like.  Is it still delayed?  Are the strong lines of “adult” and “child” still in place and still so defined?

Her financial assets: 

The Daughter currently has a checking account with a checkbook and a debit card, a savings account earning 4.75% APY, and a traditional CD earning 4.95% APY.  Between these three accounts, The Daughter’s cash assets are approximately $2,500.00.

All three are co-owner accounts since The Daughter is still a minor and I couldn’t find a bank that would let her open her own individual accounts.  In fact, it took a bit of looking to find a bank that would even allow co-owner accounts instead of custodial accounts.

Apart from a savings bond we cashed out 1-1/2 years ago for ~$850.00, The Daughter’s cash assets are solely the result of her own income (see below) and savings habits. 

Her revenue streams:

The Daughter has three main income sources –

1. Her Allowance:  The Daughter receives $6.00 per week, paid monthly.
2. Her Job:  The Daughter is paid $10.00 per week by the church to provide child care during the adult services.  The arrangement is that she gets paid every week whether there are children to watch or not.  However, on the weeks when she doesn’t go to church (happens occasionally, I substitute), she doesn’t get paid.  The Daughter landed this cushy child care position last summer.
3. Gift cards and cash on birthdays and holidays.  Cash gifts are a rare occurrence (in fact, I can’t remember her receiving a single cash gift over the years) but gift cards are frequently at the top of her wish list and family often obliges.
4. Sometimes, though rarely, The Daughter earns extra cash by babysitting.  Her extracurricular (sports) schedule and homework workload preclude her from being able to accept most of the job offers that she receives.  She does babysit more frequently in the summer than during the school year but summer vacation’s only 2 months long and last summer she was gone for half of that time.

A fifth source of “income” that at this point involves no cash is The Daughter’s monthly clothing allowance.  The current arrangement is that she gets $100.00 per month to spend completely at her discretion.  Whatever she doesn’t spend in one month carries over to the next month.

Her financial responsibilities:

I do not place any savings requirements on The Daughter.  She is free to spend as much or as little as she chooses on, for the most part, anything she chooses.  And she is not required to tithe or make charitable donations.  Almost without exception, she is free to spend her cash, her gift cards, and her clothing allowance in whatever manner she chooses.

The Daughter is responsible for paying for all gifts she purchases for friends and family.

At the beginning of this school year, The Husband and I signed a permission form that allowed her to go off campus during lunch.  If she chooses to walk with her friends to the coffee shop or local Mom & Pop grocery store, she’s responsible for funding those forays.

She pays for her own music downloads and for any books purchased for leisure-time reading.

She pays her own library fines and most of her independent recreational pursuits (ie, if she sees a movie with her friends, she pays; if we see a movie or go to a concert as a family, I pay).

Although her clothing allowance is still hypothetical (it exists as a budget category), she alone is responsible for making all clothing and clothing-related purchasing decisions.  Anything that she puts on her body has to come out of that allowance including all athletic gear (shoes, ankle braces, warm-ups, etc), intimates, and the daily-grind practical stuff (winter coat, socks, etc.).

Her financial awareness:

In addition to being comfortable with bank statements, checks, and debit card usage, The Daughter is generally fiscally savvy.

She understands the difference between a debit card and a credit card.

She knows what an NSF charge is and how to avoid ever having to pay one.  She is aware of the difference between the interest her money is earning and the rate of interest she’d have to pay if she borrowed money or used a credit card and didn’t pay the balance in full.  She does not view credit cards as evil but, then too, she does not view credit as free money.

The Daughter knows what a mortgage is.  She knows how prepayment works and she knows that some loans come with a prepayment penalty.  She’s familiar with home inspections, closing costs, broker fees, ARM’s, interest-only loans, VA loans, market value, appraisal value, and sweat-equity.

She understands compounding interest.

She knows about income tax, sales tax, and Social Security.

She knows what a payday loan is and why she should never get one.  She knows what usury is.

Tallying her financial score:

In all honesty, I couldn’t be happier with The Daughter’s financial attitude and awareness.  She has, thus far at least, succeeded in finding a balance between frugality and the strong attraction she feels to clothes, fashion, and all things bling.

She has an excellent grasp on the difference between her wants and her needs and seems able to derive long-lasting pleasure from small indulgences.

She appears to be developing a strong sense of when to buy for quality and longevity and when she’s better served by going cheap.

She’s extremely generous and is a first-class gift giver.  She isn’t extravagant but never pulls her punches when it comes to giving quality and meaningful presents to friends and family.

She has, quite independently (though I take credit for giving her that first strong taste for watching her interest earnings grow) set up an aggressive savings plan with her target being to save 50% of all earned income.

Although her good financial habits are no guarantee of future fiscal responsibility, I have every reason to expect that she will continue on her current path.  There will, in all likelihood, be mistakes made along the way.  All of us eventually have a financial mis-step or two.  Still, I find her natural financial acumen to be comforting and encouraging.  I believe that her current financial habits result from a combination of nature (her own personality) and nurture (the examples set by The Husband and myself) and I feel fairly confident that when she heads off to college in just over two years, irresponsible financial behavior will not be one of my main worries.  

Although I might well be deluding myself, I believe that despite our delayed introduction to money and spending (or, in my personal estimation, quite possibly because of it), at 15 The Daughter is way ahead of her peers regarding personal finances.  None of my peers’ children are as responsible for their own personal finances as my daughter is.  And from what I’ve learned about her current classmates, she’s light-years ahead of them in this regard as well.

There are many schools of thought when it comes to teaching children about finances.  It seems to me that a very large percent of PF bloggers and mainstream parents ascribe to a “the sooner the better” philosophy.  This is no surprise to me since our society at-large tends to take this stance on everything related to children.  The sooner they read, the better.  The sooner they start talking, the better.  The sooner they wean, walk, start school (fill in the blank), the better.

It may not surprise my regular readers to learn that I do not ascribe to this school of thought.  I think that children are children.  They are not miniature adults.  And they are not even miniature adults-in-training.

To my thinking, finance and money issues belong in the adult world.  They are adult issues.  And I feel very strongly that we do our children no favors by introducing them to the complexities of finances at an early age, much less the stresses, worries, and ethical issues relating to money.

I believe a child’s work is to play, to create, and to imagine. There will be plenty of time to teach children the ins and outs of money and finances when it’s more developmentally appropriate.

In the meantime, children learn a lot about money, finances, frugality, and the ethics of money simply by watching their parents spend money (but that, my friends, is an entirely separate post in and of itself).

Sure, children figure out pretty quickly that those coins and that paper and those rectangular plastic things somehow relate to goodies.  And sure, we adults can intellectualize with children and lecture them and even get them to parrot certain facts about money.  But a child, with a child’s mind and a child’s perspective and a child’s innocence, simply cannot comprehend and appreciate the world of money.  Even more so, why should they?

I felt no compunction about conveying to my young children (up to age 6) that money and the act of buying things was something that adults did.  In our family, children did not spend money nor make money nor even possess money.  This is not to say that the possession of money was strictly forbidden.  I’m sure my children each had a collection of coins they found around the house or in public places (shoot, those munchkins are so much closer to the ground than we are, they’re experts at finding dropped coins).  However, those coin collections were no more significant to them than the other items they collected:  sea shells, bits of colored ribbon, bottle caps, pretty stones, etc.  My kids knew that, theoretically, the coins carried a value that, say, bits of colored ribbon didn’t but that was in the adult world, not their own magical childhood worlds. 

Yes, some of the kids around them were receiving allowances or spending pocket change on candy selections but my children were no strangers to the fact that our family often did things differently than the way the neighbors and school mates’ families did things.  [I have since discussed some of these differences with my children and neither profess to have been permanently scarred by my somewhat un-orthodox parenting decisions; influenced, yes, but not scarred.  ]

Again, I’d like to emphasize, the use and possession of coins was not forbidden in our family; rather the use of money was an adult activity just as driving was an adult activity. 

I understand that not every parent feels comfortable drawing lines between parental privileges and children’s rights.  I’m not among them.  In our house, Dad drank Coke but the kids didn’t (no caffeine).  In our house, the kids wore what mom had laid out or required — that meant that The Daughter wore a coat or The Son wore boots and not sandals if mom said so.  In our family there was a difference between the dessert portions served to adults and children, and as much as it scandalized my sister, it was even acceptable for adults to declare to the children that a given night was not dessert night only to have the adults break out the ice cream after the children were in bed.  In our family The Husband and I sometimes said, “because I said so” and that was that. 

If you’re still reading this post and haven’t yet abandoned it is irrelevant, perhaps my ultimate goals would interest you.

1. I felt that exposing my children to the complexities of personal finance was unnecessary at a young age.  I had faith that even if we delayed lessons in personal finance they would still have plenty of time to learn everything they needed to know about money by the time they left home.
2. I wanted my children to grow up with a sense that money and all matters relating to money are serious and complex.  Handling money isn’t child’s play.
3. I wanted to delay their desire for the acquisition of goods as long as possible (see my cardinal rule for shopping with kids).
4. I didn’t want my children’s first experiences with “saving” money to be in any way associated with eventually spending (as in saving an allowance for a number of weeks in order to buy something even bigger and better).

Please understand, I’m not saying that children shouldn’t handle money until they’re 16 or 18 or, heaven forbid, 21.  I’m just saying that I decided to wait until my children were school-aged before beginning to create and encourage any relationship to or interest in money and finances. 

When our oldest was seven, we decided that it was time for her to learn to save money.  In a bank.  As I described last week, shortly after her 7th birthday, The Daughter and I visited a local bank and opened a custodial savings account.  Also at this time, we started giving her a weekly allowance.  So now she was receiving money and saving money.  The privilege of spending money, however, was still a full year away.  More on that next week.  Stay tuned…

Long, long ago when our children were mere preschoolers, The Husband and I had a series of conversations relating to children and money.  We discussed the ins and outs of allowances as well as what types of skills and attitudes regarding finances we wanted them to acquire while still in our care.

When imaging The Husband and me at work on parenting decisions, it’s important to keep a few facts in mind:

1. My significant other is significantly older than I am (29 years, 2 months, and 28 days, to be exact, but I usually just round up to 30 years 
2. We each spent our formative years in completely different eras:  he in the late 30’s and 40’s, me in the late 60’s and 70’s
3. We come from drastically different social and economic backgrounds: he from humble southern folk who made good, me from wealthy cultured southern and european folk who didn’t
4. The Husband had a lifetime of experience prior to our relationship in which he raised and supported three children from birth through under-graduate degrees and also raised and provided for a special-needs child

I came to our discussions with one initial goal — to teach our children to enjoy saving money before they ever experienced the allure of spending money.

I was quite familiar with what was then, and remains to this day, a typical parental decision to require children to save a set percentage of their allowance and income.  Additonally, many parents require their children to tithe (I don’t and have written about my reasons here).   I didn’t agree with the typical save/tithe/spend scenario back then and, after nearly 10 years of experience with my own children, feel that I made the right decision to follow my own path.

The argument for the typical save/tithe/spend arrangement is that it helps children develop good money habits.  But habits only get you so far.  Plus, it seems, good habits are difficult to develop and easy to break.  I wanted saving to be more than a habit for my children.  And I definitely wanted the act of saving to last way beyond the parental-restriction years.

I wanted my children to develop a strong taste for saving and watching their money grow.  To truly derive pleasure and a sense of accomplishment from watching their bank balances get larger with each new deposit and each new bank statement of interest earned.

My resulting plan was simple — for the first year of receiving an allowance, no spending was allowed.  In all honesty, I can’t remember if we started each child on an allowance when they reached 6 or if we waited until they were 7.  But the point is, that for that entire first year, all allowance went straight into their savings accounts.

Within a week of my daughter’s birthday, she and I went to the bank and opened a custodial 2-year CD.  Even though the account, because she was a minor, had no opening minimum and no monthly minimums, her dad and I kicked in an initial deposit of $100.00.  From that point on, at somewhat irregular intervals, we’d make visits to the bank so she could make her deposits.  I taught her how to fill out deposit slips and make the proper entries into her bank book — activities that dovetailed nicely with our homeschooling efforts.  Every quarter she’d get an envelope from the bank with a paper statement and we’d sit down with the statement and enter her quarterly interest earnings into her bank book.

Just as I’d hoped, she loved seeing that number grow.  By the time her 1-year “probation” period had ended, she had both developed a savings habit and acquired a taste for watching her bank balance grow.

When The Son turned 6 (or 7 — whichever it was), I did the same thing all over again.  We went to the same bank and opened another custodial account, again kicking in the first $100.00.  Now they were both filling out deposit slips and recording their deposits and interest earnings into their bank books.

The Daughter, to this day, is a terrific saver and a very wise spender.  I’m particularly in awe of how well she has balanced her very generous spirit with her very strong taste for saving and desire to watch her money grow.

The Son, too, is a strong saver.  Stronger even than his sister because he has expressed absolutely no interest in spending.  But he’s really only now, at 13, fully awakening to the benefits of keeping his money in the bank instead of under his mattress or hidden in his little metal safe in his closet.  I think this probably has much to do with his clear preference for staying home over going just about anywhere — especially anywhere as boring and mundane as the bank.

Helping my children develop a taste for saving before giving them a taste for spending was just one of many policies The Husband and I developed regarding our children and money.  Only time will tell how truly effective this strategy was but I feel it has provided them both with an excellent financial foundation.

I’ll be sharing more the details and the evolution of our allowance policies over the next several weeks but you can read more about my general thoughts and philosophy on allowances in my post, Allowance — Yes? No? and Why?

Wednesday evening, while The Son was busying playing his cello in orchestra rehearsal, I ran a couple of errands.  The hardwood floor store didn’t have what I was looking for and I still had about 45 minutes to kill so I stopped in the Marshalls down the street.  I needed to return that pair of “swish” pants.  Having plenty of time left and no reading material with me, I decided to kill the rest of the hour looking around the store.  I ended up finding a nice $54 Lanz of Salzburg flannel nightgown for $16.99 that I thought The Daughter would like.  And she did — like it, that is.

  But as I entered the purchase into my YNAB budget that night, it occurred to me that I’d just spent The Daughter’s money.  We’ve been working up to her having a set monthly clothing allowance but now the YNAB Program* makes it really easy to keep track of exactly what I spend on her clothes and exactly how much she has left in her allowance at any given point.  So after entering the purchase in the register, I clicked on the “Budget” tab and saw that her clothing allowance had just decreased by $18.36.

It struck me that I had just spent her money and that we had a potential problem here.

The reasons for giving The Daughter a monthly clothing allowance are 1) to demonstrate to her how quickly expenses such as clothes, shoes, bras, undies, sportswear, ect add up; and 2) to help her learn to live within a limited budget and make the corresponding necessary decisions now, while she’s still at home, rather than later when she’s on her own.

So as I entered the expense and saw her budgeted allowance drop, I realized that I’d have to make a few changes to my own shopping habits.  In truth, I don’t shop for The Daughter very much.  She’s a pretty typical 15-yo girl — she thinks my taste sucks, she likes to choose her own clothes, and I’ve taught her from early on to always try something on before buying.  The nightgown purchase was a whim.  I knew she could use another nightgown, I thought she’d like the pattern, and, well, just because.  [Note to self:  work on this impulse shopping thing. ]

Wednesday night, while tucking her in to bed and saying “good night”, I mentioned that I’d spent her money and that she needed to decide whether that was money she really wanted to spend and whether the nightgown was what she really wanted to spend it on.  With school and sports and life-in-general, we didn’t return to the issue until this morning.

Yesterday, The Daughter went window-shopping at the mall with her schoolmates/teammates/friends and ended up finding a $50 pair of American Eagle jeans she wants.  Having no money on her at the time and knowing that such a big purchase should be carefully considered first, she put them on hold as I’ve taught her to do.  Her plan was to ask for the jeans for Christmas.  I said “no” to Christmas — I’ve already decided what the kids are getting and a pair of jeans isn’t on the list.  “But,” I said, “you can take them out of your clothing allowance.”  Hmm.

Now some people would freak at spending $50 on a pair of jeans, myself included.  But I know that that’s actually a pretty average price for a pair of “designer”-type jeans.  I don’t like spending money on clothes but I sure can appreciate that some brands fit better than others.  I personally see no point in paying $15 for a pair of generic jeans that don’t fit well and one doesn’t enjoy wearing.  I also know, from experience, that AE jeans do consistently fit The Daughter well and that she gets her money’s worth out of the two pair she currently owns.  So I agreed to take The Daughter back to the mall today to purchase the jeans.

This talk of jeans and clothing budget brought up the topic of the nightgown.  It also brought up the fact that currently her “allowance” is completely arbitrary.  I’ve been assigning that budget category $100 each month for the past three budgeting periods (months) but I have no idea, really, of how much I think she should get.

One hundred dollars a month seems like an outrageously large amount of money.  But if you add up what we’ve spent to clothe her over the past few years, I suspect that $100 is pretty close to what we average every month.  She’s 15, after all.  Tastes and preferred brands aside, the past few years have been a complicated period for her.  She’s grown.  And developed.  And her style preferences have matured and gone through several changes.  In addition, she started attending school full-time, stopped swimming competitively, and joined two new sports.  So between basketball shoes and cross-training shoes, track pants and volleyball socks, sports bras and ankle braces, the dreaded “muffin-top” induced cup-upsizing and a change in underwear preferences, normal-growth- and weight-gain-caused outgrowing of pants and shirts, dressy-clothes and accessory requirements on game-days — all of this really adds up but I had no idea of how much it all added up to.  So I assigned a very arbitrary and most-likely generous $100 per month.

Now that her growth has slowed or maybe even finished and her weight stabilized, one would hope that the influx of new clothes would slow down. But, at this point I’m going to stick to that budget allowance — while also informing The Daughter that it might be lowered if deemed prudent by the parental units. :-)  And I’m going to stop spending her money.  Every single clothing and accessory purchase for The Daughter — except gift purchases — will come out of that budgeted allowance.

Oh, and the nightgown?  It’s going back to Marshalls and when the return is done the funds will be returned to The Daughter’s budgeted allowance.  And not because she has decided that a new nightgown is low on her priority list but because, after trying it on, she doesn’t love the fit and doesn’t think she’d wear it much.  I completely agree and fully support her decision.  That will teach me to spend her money!

Yesterday morning I read a post about Chasing the “It” Toy by Trent over at The Simple Dollar.  I haven’t been able to get that post out of my mind.  I posted a comment at the time but feel compelled to return to the topic here on my own blog this morning.

Trent talks about his own and his wife’s experience with “it” toys — Cabbage Patch dolls, Super Mario games, and a Tickle Me Elmo.  He writes:

I know, certainly, that my best Christmas memories are of receiving that one toy I most wanted for Christmas, but I realize now that on some level, I realized that it was more than just the mere gift. I knew that my parents had gone through a lot of effort to get the item and make sure that I had it that year for Christmas, and I knew it was because they loved me very much. [emphasis mine]

This statement keeps ringing in my head.

My response was as follows:

Hi Trent. I love  your blog and respect your opinions but I have to say that the very idea and existance of “it” toys offends me deeply. On principle alone I wouldn’t walk across the street to get an “it” toy for free.

I defend the right of marketers and manufacturer’s to try to build the aura of “it” for their products but I equally defend my right, as a mother, to keep my children from being exposed to the media that encourages “it” toys. And, if exposed, I stand firm on my efforts to help my children see that their lives will not be ruined forever if they never receive an “it” toy.

What struck me most was Trent’s equating the willingness to stand all night in a line or to fight over a coverted toy with love.  I know that this type of behavior over an “IT” happens all the time – parents who pay 10 times the retail value of a gift or a halloween costume or a Hanna Montana concert ticket just because little Johnny or Suzy craves it with their whole heart and just has to have it.  I would hate for my children to measure how much I do or do not love them by the number or value of the material gifts I have or haven’t provided.

Now, I don’t know Trent (though I do enjoy his blog) and I don’t know for sure that he was measuring his parents’ love by the bribing of a dock-worker in order to score a Super Mario game.  But I know that some parents operate that way and I know some children think that way about their parents.

I don’t want any part of it.  I’d rather shoot myself in the foot than give my children the impression that acquiring anything by a particular date was worth paying usury rates or losing sleep over. If Tickle Me Elmo tickles your kid’s fancy, so be it but what kind of value system would induce you to pay several times the retail value plus inflated shipping to some eBayer just so you could wrap it and put it under the Christmas tree?

My kids have received some pretty cool and coveted things over the years including American Girl dolls, Razor scooters, and iPods. Like any parent, I get a thrill out of seeing their faces light up when a gift is spot on. Although I can’t personally imagine spending money on a Tickle Me Elmo or a video game, I do understand their appeal. I’m not questioning the value of the toys themselves. I’m questioning the concept of giving even one iota of creedence to the thought that buying the toy by December 24th has any greater value or demonstrates any greater love than buying the same gift in, say, the middle of July.

My kids are not yet full-grown and therefore I can’t point to them and say, see, my method is proven to work.  But based on their current levels of media immunity, their savvy-ness in regard to “IT” things, and their highly developed abilities of delayed gratification, I’m pretty confident that we’re on the right track.  It might be that St. Peter will turn me away from the pearly gates because I never bought my kids an ”IT” toy but that’s a chance I’m willing to take.

The Women’s Personal Finance Network (of which I am a proud member) is currently highlighting the subject of How to Raise Financially Responsible Children.  I have a lot of thoughts on this issue — some of which I’ve already shared on this blog in my Kids and Money category.  Other thoughts will come out in the coming weeks and months.

I do consider educating my children on the basics of finance to be a moral imperative.  As with all subjects, I approach the subject of finances from three different directions.

First, I do my best to convey the facts in an unbiased and logical manner.  There are many objective facts that children should be acquainted with before they leave the nest — things like compounded interest (interest you earn and interest you pay), balancing a checkbook, taxes, etc.

Second, I share with my children my subjective views on all things money and finance.  When should quality trump quantity and vice versa?  How important is money when considering a career path; how does having money affect people and relationships and how does not having any money affect people and relationships?  I try to be honest with my kids about what I value; on what I will spend money and will not spend my money on; on what I consider to be money well spent and money sorely wasted.

Third, I make an effort to be as frank, objective, and as open as possible regarding conflicting viewpoints.  For example, I choose to not spend any money at all on beauty products but I don’t expect, require, or demand my daughter share those same values.  The point of this angle is evaluate how other people spend their money; to explore and discuss other paradigms of fiscally responsible behavior that differs from the way The Husband and I do things.  I’m sure there are many women with dozens of pairs of shoes and a whole array of make-up who live within their means ;-) 

All parents know that the best way to avoid meltdowns and tantrums is to leave the children at home when you shop.  Of course, we also know that shopping without the kids is a pipe-dream, a logistical impossibility.

Today I’m going to share with you my sure-fire, tried-and-true method for avoiding the gimmes while shopping with children.

Never, ever, under any circumstances, purchase anything for your child for their immediate consumption while shopping.

There are many variations on the parents-trying-to-survive-shopping-with-kids theme and I’ve witnessed them all.  Buying a toy or a treat or a snack and then either giving it to the child to keep them quiet and placated or holding it in reserve as a reward/bribe for their good behavior during shopping.

No matter what the variation, don’t do it!

The cardinal rule for shopping with children is to never establish a correlation between shopping and acquisition.

Don’t get me wrong — I am not advocating torture or deprivation or cruelty.  I’ve been happily shopping with children for 15 years now and my children are anything but deprived.  But they also, never to this day, have asked me for a candy bar or other treat at the grocery store or for a toy or game or any other trinket for their immediate pleasure.  My children do not equate shopping with immediate gratification because they’ve grown up with the complete and total absence of immediate gratification while shopping.

Shopping is a necessary chore — something we do because we need something — be it food or clothes or a gift for cousin Bob.  Sometimes we buy things that weren’t on the shopping list but these things always go into the cart and from the cart to the bag and from the bag to the car and from the car to the house where it is then put away in its proper place until it is needed.

I’m a practical woman and also a bit of a soft touch.  Even though I never made an immediate gratification purchase for my children while shopping, the doesn’t mean that I didn’t see to their needs and wants.  With rare exceptions, my children always had something to eat and something to play with during our shopping excursions.  All it takes is a little bit of forethought and planning.

The key is to keep it special.  When my kids were little, I always kept a stash of finger food in the cupboard that was saved for special occasions like boo boos and shopping trips – snacks like Goldfish, Sunspire candies, animal crackers, etc.  Costco has huge plastic tubs of yummy cinnamon alphabet cookies and big bags of trail mix that my kids loved.  I found that the snack that worked the best at keeping my kids occupied and happy were bags of mixed snacks (a combination of fishies, candies, letters, etc) — good for occupying little minds as well as hands and mouths.  Of course, these snacks will leave the kids thirsty so don’t forget the juice box or travel sippy cup!

The same goes for toys — keep it special.  Just as I held snacks in reserve, I also kept toys in reserve just for shopping.  And here, too, variety works best.  After some trial and error, I finally established three or four small bags containing a collection of toys. Then I’d rotate the bags so the toys wouldn’t become familiar and boring.  Matchbox cars and Little Rollies vehicles and animals were among my kids’ favorites.  When they were a bit older, a Dover little activity books would keep them well occupied.  The bags of toys stayed in the car, tucked into the glove box or trunk and came out only for a shopping excursion.  Once shopping was done, the toys went back into the bag.

My kids learned to look forward to shopping trips as an opportunity to munch on a special snack and play with special toys — not as an opportunity to wheedle a purchase out of mom.

Based on what I’ve read in articles and books about children and allowance, encouraging and/or requiring one’s child to set aside a portion of their allowance for charity or tithing is a common practice. I make no judgement on this practice. I respect each parent’s right to choose how to teach their children how to handle money. However, I have chosen not to adopt the practice and I’m going to share with you the reasoning behind my decision.

The church we attend is my choice and weekly attendance is my decision. The children attend a Christian church because I am a Christian. We attend church on a weekly basis because I say so. My children go with me because I say that their attendance is not optional.

My children see me write a weekly check to my church. They’ve also seen me write additional checks — sometimes to support specific purposes and sometimes just because I have some extra funds. They’ve seen me donate my time and energy to the church. They’ve accompanied me to weddings, baptisms, and funerals. They participate in events, eat at pot-lucks, attend religious instruction, and go on Easter Egg hunts. But at this point, they are members because I am a member.

I feel that when my children are grown they need to be given the freedom to follow their own paths and engage in their own seeking. If they find comfort in the same teachings that I do, so be it. If they find fulfillment elsewhere, so be that too. They may choose a completely different faith — my paternal grandfather was Jewish. They may choose, as two of my own siblings did, to not have no religious affiliation at all. They will make those decisions, as adults, in freedom. And once they’ve chosen their path, in freedom, they will support and participate on a social and economic level of their choosing. As adults.

May the Peace be with you also.

I was planning another installment in my series about kids’ allowances [the first being Allowance — Yes? No? and Why?] but I’ve decided I need to backtrack a bit and cover some background philosophical ideas first.

I believe that the foundation of a healthy relationship to money (and healthy interpersonal relationships, also) is a solid understanding and inner acceptance of Wants versus Needs.

My mother, bless her soul, is a terrific woman. She raised four children mostly on her own. Now she’s the world’s greatest grandmother. She’s generous, kind, thoughtful, fun, talented, and highly intelligent. She’s also a shop-aholic. Really. It’s a sickness. She’s deeply in debt, constantly borrowing money, and the source of a great deal of stress for my siblings and me. It’s very painful to watch an otherwise intelligent adult engage over and over in self-destructive behavior. My mom has no boundaries when it comes to materials goods — basically if she wants it, she needs it.

Thirteen years and a lifetime ago , I was the mother of an infant and a soon-to-be 3-yo. During the first 6 months of The Son’s life, I spent a lot of time nursing and pondering the changes I had seen and was seeing my first child go through. The Daughter had gone from that same babe-in-arms helpless-infant stage to this terror-in-cherub’s clothing. Gradually it became evident to me that what I was seeing was her transition from being 100% needs-based to having both wants and needs. Actually, if you’ve ever had a 3-yo in your life you’ll know that they appear to go from being 100% needs-based to 100% wants-based!

Anyway, this recognition of a child-development stage lead to one of the most important tools I carry in my Mothering Toolbox — a Wants/Needs hierarchy. It looks like this — in descending order of importance:
1. Children’s needs
2. Parents’ needs
3. a) Children’s wants and b) Parent’s wants

As simple as the hierarchy is on paper, identifying the difference between a want and a need is often no easy task.

Infants are easy — they are 100% needs based. They need to be fed, changed, and loved. They simply do not have wants. A crying infant doesn’t want to be picked up and comforted, she needs it.

But toddlers are a different story. They’re learning that the world does not revolve around them and it’s a painful experience — for everyone involved. Toddlers need food, comfort, and basic care just like an infant but they also need to be taught the intricacies of wants and needs. This is very long learning process and unless we, as parents, understand and internalize the concepts of Wants and Needs we cannot effectively teach our children to understand the differences.

As the saying goes, “necessity is the mother of invention.” It was in a moment of necessity that I stumbled upon the first lesson I used to help cement the concept of Needs vs Wants in my own head and begin teaching The Daughter the harsh realities of life as an older sister One morning soon after The Son was born, we were playing out a typical home-life scene: The Son and The Daughter were both crying. As a normal postpartum mother, I was tired, sleep-deprived, bleeding from one end, leaking from another, and ready to cry myself. In desperation, I had a conversation with The Daughter that went something like this,

Sweetie, do you hear your brother crying?”

The sobs quiet slightly so she can listen, “Yes.”

“Here’s the rule: only one baby can cry at a time. Since he’s the ‘new little, little baby brother’, he gets to go first. As soon as he’s done crying it will be your turn. Okay.”

Tears dry up. A few brain cogs tumble as she processes this.
Then, “Okay.” And she sits down patiently to wait for the baby to stop crying.

What an incredible and eye-opening experience that was for me! What a learning experience it was for both of us. The Daughter, although certainly not consciously aware of it at the time, learned that the baby’s needs came before hers. And I learned that she was capable of delaying her needs.

Since that fateful day, we have continued to explore and learn about the hierarchy of wants and needs. I believe there are two keys to helping children learn to recognize the difference between their wants and needs. They are 1) to model behavior and 2) to introduce the terms and use them often.

Do you really want Jr. to come to the table now? Or must he come because he’s been called? Do you want her to eat her veggies or do her homework? Do you need that new skirt or that new power drill? It may seem like such a silly subtle matter of semantics but don’t underestimate the power of a seemingly simple word. Next time you’re contemplating a purchase, ask yourself if it’s a want or a need.

Our children are both teenagers now and I’m proud to say that they both have a solid grasp on the basic difference between their wants and needs. They know what groceries are needed (milk, dairy, fruits, veggies, grains, meat) and what is wanted (chips, soda, juice, etc). They’re also clear on the idea of what clothing is needed (a winter coat, practical everyday shoes, underwear) and what is wanted (3 pair of pants instead of 2, that extra pink polka-dot bra just because it’s pretty). And they are quite clear on the fact that anything beyond food, shelter, and comfort is a want. More importantly, they understand the hierarchy of wants and needs and are capable of putting aside their wants for needs and, sometimes, their needs for the needs of others.

Still, we continue to model behavior and language about wants and needs. The situations are more complex and often the questions are harder. When is one person’s needs more important than another’s? How do your wants impact mine? How about how our needs and wants impact the future and our ability to meet projected needs and fulfill future wants? How best do we accommodate every one’s needs and wants within a limited budget (because no matter how large a family’s budget, it is almost always limited). Then there’s the issue of our needs and wants as a couple; and the needs and wants of all of us together as a family unit. Obviously, balancing the needs and wants of one person is easier than balancing the needs and wants of a couple or a family.

For nearly four years, I’ve wanted a new ‘fridge. This summer the scales really tipped from want to need. Our children were party to all of our conversations about whether or not it was really time to replace the appliance. They were involved in all of our debates on what style, which brand, with or without ice-maker, etc. When we finally made our choice and bought the refrigerator, they knew how many of the features chosen were what we wanted and how much of the purchase was filling a need.

The children were also party to the process of purchasing a new car this summer. I wanted a family-sized car and I wanted an iPod input jack. We ended up with a small commuter car without an iPod jack because it was all we needed.

Now that Christmas is bearing down on us, dinner conversations are starting to center on how the car and refrigerator purchases need to be taken into consideration when looking at this year’s gift budget. Clearly our needs earlier this year will impact our ability to fulfill wants this Christmas.

At this point, if you’ve read this far, you might be wondering if I see all needs and wants as involving material goods. The answer is, no, of course not. But this is, after all, a Personal Finance blog In all seriousness, though, the point I’m trying to get across is that, as parents, it’s our responsibility to, first, be clear in ourselves what is a need and what is a want and then, second, model for our children both the process of differentiating between our needs and wants and the implementation of our own personal needs/wants hierarchy.

Whether it’s of our own making or through sheer dumb luck, our family life is free of sibling rivalry, accusations of one child getting more than the other, and recriminations that we just don’t care or understand. Better yet, our children seem to trust us implicitly to meet their needs and their wants to the degree that our budget allows and our discretion determines prudent. But then, our kids have grown up secure in the knowledge that their needs will always be met and that, with a bit of patience, they very often get the things they want too.

Since starting this blog almost 2 months ago, I’ve spent quite a bit of time reading other Personal Finance blogs. It’s been fun; it’s been informative; and it’s been an eye-opening experience.

After this morning’s visit to my Google Reader, I’m come to the conclusion that I’m definitely a black sheep among the more popular personal finance bloggers. Being a black sheep does not bother me. Rather it’s the absence of voices sharing my opinions about money and my perspective on life and finances that worries me. Will all newcomers to the world of on-line personal finance advice come away with the impression that there’s only one perspective on how to relate to money?

Granted, I haven’t visited every single personal finance blog being maintained. But I’ve visited many. I make daily excursions on which I start by picking a big-name PF blog and spreading out from there by following its BlogRoll links and comment links on wildly meandering jaunts into the depths of the on-line personal finance community.

To be sure, the stories differ (I love reading these) and the writing styles differ (these are fun too) but the perspectives are becoming a bit boring, monotonous, and, as I stated, worrisome.

~o o O o o ~

Is there NO ONE out there in Personal Finance Blogdom whose ultimate personal goal isn’t to retire obscenely wealthy at 35 years of age? This obsession with retiring early is such a mystery to me. If all that you can think about is the day that you no longer have to work, you are in the wrong line of work my friend! I recommend that you take a good hard look at your priorities and your value system.

The Husband is 72. He is at this moment actively working toward retirement. But wait, before you draw a mental image of what his retirement will look like, let me explain. The Husband is the President of a Corporation. It’s a small, two-employee company (I’m the second employee) with a handful of stockholders. His version of retirement, which will most likely take another 2 to 3 years to fully implement, has him doing exactly the same work he’s doing now but without the stockholders to answer to. In other words, when The Husband retires he’ll continue to commute every day to his executive office space to do the same work he does today but he won’t have the burden of stockholders to answer to or shuffle paperwork for. My husband, like his father before him, won’t fully retire until God himself retires him.

The Husband is a product of the Great Depression and World War II. His values and work ethic reflect that. He provides for his family — that’s who he is; it’s what he does. I love that and respect that about him. He’s a quiet man. He’s a humble man. He’s a generous man. He’s a man who has twice survived cancer and is currently fighting it a third time and yet you’d never know it. He never complains. He never whines. His family is his first priority. He’s loving, and gentle, and demonstrative. He’s an involved parent; he’s changed a million diapers, wiped a million snotty noses, seen a million games, sat through a million concerts, squished into a million school desks to listen to a million teachers, spent a million hours at the kitchen table helping with homework.

If our son grows to be half the man his father is, I’ll be proud of the job we’ve done. If, as a grown man, he knows that the measure of a man is in his soul and not in his bank account, I’ll be proud.

One can work until death without working oneself to death. Isn’t there something wise said about idle hands…?

~ o o O o o ~

Someone, please tell me that I am NOT the only suburban mom who doesn’t consider DisneyWorld/DisneyLand to be the ultimate vacation destination!

Need anything else be said? We had the ultimate luxury of inheriting a condo on the Florida coast. We travelled with our children to Florida for 7 years in a row and never once considered making a stop at DisneyWorld or Epcot or any of the other theme parks in Orlando.

I used to be an eBay Powerseller. I swear to you, at least half of fellow eBay sellers I encountered on-line were involved in their efforts for the sole purpose of saving for their family’s next trek to a Disney theme park. Now I’m beginning to find the same financial goal on blogs.

It’s not so much that I judge this value — I believe very much in “to each his own” — but am I really the only suburban mother who doesn’t have a burning passion to buy that particular experience for my children?

~ o o O o o ~

And speaking of children (and this one really bothers me) I definitely appear to be a personal blogger black sheep in regard to children and money.

Am I alone in thinking that 1) children should not be paid for chores?; 2) it’s easy to teach a child to save for their own self-gratification but much harder to teach them to be truly generous?; and 3) learning to spend money is not the same as learning the value of money?

Everywhere I look PP bloggers are talking about their methods of giving children money so they can practice buying things. Isn’t it possible that this is the wrong way to go about things? I mean, come on, how difficult do we really think it is to teach a child how to save for 2 or 3 or 4 weeks until they have enough to buy themselves a coveted toy or electronic game?

I’ve got a 15-year-old nephew whose room is filled with expensive Lego sets that he has purchased for himself over the years. The most difficult challenge he’s been presented with is sharing those Legos with his younger brother. He doesn’t have a savings account and he doesn’t have any experience in spending his money on other people. When he goes to a party, him mom buys the gifts. To my knowledge, his allowance has never been spent on anyone other than himself. And I know that his situation is far from unique.

~o o O o o ~

If being frugal means consigning myself to a lifetime of self-deprivation, then count me out!!

We’re solidly into Autumn here in the Rockies which means that Winter is just a 1/2 step away. I’ve owned cheap flannel bedding before and I’ve made a personal commitment to never do so again.

I love that I can go to the grocery store and buy what I want to eat. I love using coupons and saving money on sale items but I don’t want to be controlled or feel restricted to coupon- and sale-only items.

When my children were little they were dressed entirely in thrift store finds and hand-me-downs. I’ve got nothing against thrift store clothing but rarely shop there any more. The hassles just aren’t worth it for me — allergies, clothing steeped in perfumes from detergent and softeners, having to look that much longer and harder for the right sizes and the right styles to suit the kids’ tastes.

~ o o O o o ~

I guess the truth is that personal finance is just that, personal. Blogging about my family’s finances for the past two months has brought me back in touch with my natural financial conservativeness. It has also caused me to take a good look inward and re-evaluate my values and goals as a wife and mother. After some pondering, I’ve decided that I’m content being a PF Black Sheep.

If you’re a PF Black Sheep, please give me a shout out (leave a comment) and let me know I’m not alone