Note: This is a post from Joan Otto, Man Vs. Debt community manager. Read more about Joan here.
Since we started homeschooling our 12-year-old daughter, Sarah, in late February, it’s really been on my mind what a crucial age this is for her in terms of financial awareness.
I see so many of her peers in middle school with $200-a-month cell-phone plans, with outfits that cost more than my weekly grocery budget… but even more scary, I see them having no idea where the money for these things comes from. “I don’t know, my mom buys all that stuff,” is the common answer.
And, by the same token, I see so many kids’ parents working at jobs they hate, coming home and telling their children how much they hate the work they do, that they’re just doing it to pay the bills, and I worry that Sarah will grow up thinking, “Work is somewhere you go to be unhappy.”
I know I’ve certainly been guilty of that in the past, even when doing “work” I mostly enjoyed… talking about it with Sarah as something I have to do instead of describing the way I’m making a difference in the world. If that sounds familiar, well, Baker talked about that concept before in the context of a conversation with his daughter Milli, and that post was the start of a change on my part in how I talked about life and work with my own daughter.
So much about parenting for us can be summed up in two words: Be intentional.
We’re intentional about discussing our own financial situation, and we’re intentional about having Sarah make financial decisions herself.
The picture above is a good example… that’s Sarah with her brand-new Nintendo 3DS, which she spent all her birthday money and a little of her savings on, in addition to “selling some crap” of her own to help fund it. She did the work, figured out how much money she’d need, and made it happen. And we didn’t question her decision (though I was the dorky mom who said, “OK, but you need to make sure you buy screen protectors!”)
The thing is, I know Sarah puts thought into her life and her money. So instead of wondering what her attitudes about money, work and happiness are, I decided to sit down and ask her.
Me: So what kind of work do you want to do when you get older?
Sarah: Be a pet groomer.
Me: Do you want to work somewhere like Petsmart that does grooming?
Sarah: I want to own my own business. … Well, I guess I would start out working at Petsmart, to save money, because opening your own business costs a lot of money and you have to hire people and give them money as their paychecks. So I guess Petsmart would be my first bet.
About our family’s money decisions
Me: What are some things you think Dad and I think about money? Like, what do we do with our money?
Sarah: That you keep everything in a certain amount of budget. … You’re careful, about what you buy. You don’t, um, buy things that we don’t need. You don’t buy things that you guys want because you don’t need wants, you need needs.
Me: But I bought a Coach purse.
Sarah: Well… that was your Valentine’s present from Daddy.
Me: So do you think that’s OK?
Sarah: Yeah. Now if that wasn’t your present, then you wouldn’t really NEED it, you would want it. And you’d have to save up for it and make sure you have all your needs first.
About living like a grown-up
Me: How much money do you want to make when you get older?
Sarah: I want to try to make a billion dollars.
Me: In your whole life? In a year?
Sarah: In my lifetime.
Me: So what kinds of things do you want to do with your money?
Sarah: I want to give some of it to charity, to raise money for homeless and animals that need it. I want a Mini Cooper, I would use some of it to buy a Mini Cooper. Some of it to buy a Smart car. A pool. A spa. A pool table that can go in your pool. A 52″ flat-screen TV. And a castle. I would buy the castle first.
Me: (Drily) It would be hard to imagine you having all that stuff in an apartment. But what about food and clothes and things like that?
Sarah: I would still buy that stuff. If I need socks, then I will buy socks. If I need shirts, then I will buy shirts. But if I want a cool-looking shirt that has Angry Birds on it, yeah, I like Angry Birds, but that doesn’t mean I will buy it.
Me: So you need a pool table that can go in your pool?
Sarah: It would jazz up my pool. But I don’t really need it. I want it. To put in my pool, because then when I have a pool party, me and my friends can play pool in the pool.
Me: So what would make you happy?
Sarah: In what sense?
Me: OK, well, what makes us happy, you, me and Daddy as a family now?
Sarah: A lot of things. Each other… Pets… Being together as a family.
Me: So is that the same stuff that will make you happy in your castle when you’re older?
Sarah: Being with family, hanging out, having pets and a fat robin on our deck (she was looking out the window.)
Me: So are you going to have a big family?
Sarah: I’m going to have Coby (our dog), our cats, a hamster, a guinea pig (well, I don’t know about a guinea pig, that’s a question mark). 4 Hermit crabs. A German shepherd.
Me: What about people?
Sarah: Oh, don’t worry, there are people in my house. Me. I guess my husband.
Me: So what will your husband do, in all of this?
Sarah: Well, his job will be “the animal sitter.”
Me: So is he going to go off to a job somewhere, or stay at the house?
Sarah: The house. I mean, I’ll help some, but… I don’t know if I’m really going to have that many pets. That’s just an idea.
Me: Are you going to have kids?
Sarah: I don’t know. That’s ahead of the time.
Me: OK. You have to get the husband first?
Sarah: Eventually. Not right now.
(That’s Sarah with one of our cats, Mitts. While I have my doubts that this cat in particular will make it to the time when Sarah lives on her own, I’m positive she’s not kidding – she’ll be the lady with every kind of pet under the sun!)
About finding your business niche
Me: Well that’s good. So do you think a pet groomer makes enough money for all this?
Sarah: Well… yeah. Because my own dog will be there with me every day. I would groom him before the store opens, and because of that, I would let him go greet the people, let them feel his coat, because I’d be using the Furminator, using the smooth brushes, bathing him probably… I’ll need some more people to do that too, maybe. And then they’ll get to see how good of a job I’ll do on their dogs, so they don’t think, “I wonder what she’ll do on my dog and what it’ll look like. It won’t look ugly.” And I’ll be like, “Don’t worry, your dog won’t look ugly, I’ll make it look exactly like you want and I’ll try my best.”
Me: So that’s kind of your business, like, your business’s gimmick? Having your own dog there?
Me: So what would your commercial be?
Sarah: If you want your dog to look better than the old-fashioned way, then come to Sarah’s pet grooming. I’ll get the job done and make your dog look new-fashioned.
Me: And smell better too?
Sarah: Of course!
About “good money advice”
Me: So if you could give the people reading Baker’s blog any piece of money advice, do you have any ideas for them?
Sarah: Yeah, I have a good idea! Don’t buy what you want, buy what you need and save your money!
Me: So when is it OK to buy the stuff you want?
Sarah: Well, never. No, sometimes. For your birthday.
Me: Well, we don’t just buy stuff we need only. We have some wants too, right? When do you get the stuff you want?
Sarah: As long as you keep a limit of how much you want to buy. If you just keep buying and buying stuff that you want, and then you run out of money for stuff that you need, then you’re stuffed in a doom trap!
About credit cards
Me: And if the man at college says, “Hey Sarah, do you want to open a credit card?”
Sarah: No, because that would be something that I might want to do, but that I don’t need to do.
Me: Because do you know how credit cards work? (I admit, I was interested in this – Sarah doesn’t remember a time when we’ve made purchases on credit cards as a family, so I wasn’t sure what she’d say.)
Sarah: You swipe them and it takes money out of your account.
Me: Well, that’s our bank card, it works like that.
Sarah: Grocery cards give you extra bonus points.
Me: Yes, those are good too. But real credit cards, you don’t have to have money in an account somewhere. It’s like when we went to Target when you saved up the money to buy your 3DS. You spent $300, right? But what if you only had $5? The people at Target would say, “Do you want to open our credit card?” Then they would basically loan you the money, let you buy something that cost $300 now, then send you a bill.
Sarah: And then you pay it?
Me: Well, you can. Or you can pay a part of it, then they will charge you interest on what’s left and next month you will still owe what you owe, plus the interest.
Sarah: That kind of makes sense, but I don’t know if I’d want to do that.
My mom, chiming in: GOOD. Because then you end up paying twice as much as it costs.
Sarah: Yeah, then I don’t want to do that.
Me: Anything else you can think of about what you think about money and being happy and working and stuff?
Sarah: Being happy motivates you to have a good attitude, and to focus on what you’re doing. And if you get unhappy, change your mood around to happy. Because when you get unhappy, not all people, but a lot of people want to go out and buy things because they think that would make them happy. … And use your money wisely.
Me: I think that sounds like pretty good advice. You’re pretty smart.
Sarah: Thank you, thank you very much. (In her best Elvis voice.)
Me: Thank you very much for doing an interview with me for Baker’s blog!
Sarah: Thanks! Do I get a dollar?
Me: Um, wait, what? Why do you want a dollar?
Sarah: Well, because I sat here and helped you, and I could’ve said, “No, I don’t want to help you with your blog post.” I did do all this work with you. Please? I said the magic word?
Guess what? I gave her the dollar.
All in all, I was pretty pleasantly surprised. Maybe it was the birth of Baker and Courtney’s second daughter, Charlie, this weekend, but it’s been on my mind a lot this week to think about the financial legacy I’m leaving behind – not just in terms of money, but with regard to ideas.
If I had to pick my top five things to impart on my daughter about money and life, they would probably go something like this:
- Do work that you love and that helps others.
- Treat yourself sometimes, but don’t buy everything you want just because you want it.
- Make sure your family’s basic needs are taken care of first.
- Don’t spend money you don’t have.
- Experiences and people are more important than things.
Sounds like she’s pretty close, huh?
I know there’s a lot more life ahead of her, and I know she’ll make her own decisions about all these things as her life changes. But I’d like to think we’re off to a better start than we might be!
So how do you deal with this idea of your “financial legacy” with your kids, especially as they get older? What sorts of ideas about money, “work” and happiness do you hope they’ll take into the future with them?
Would love to hear your thoughts!