Sunday, November 14, 2010
The Fine Art of Finance
I have struggled with money my entire life. When I was a kid, I got an allowance. I saved my allowance until I had enough money to buy the thing(s) I wanted. I remember saving for months and months to buy my much coveted black and white 9" television. I saved and spent, saved and spent. I never just saved. I never learned how. Is this something that is learned or something that is innate in us? I wish I knew.
My father never understood why I wasn't "good with money". After all, he never paid interest on a credit card in his life and had A LOT of money in savings. What was wrong with me? How could I not be "good with money" like my father? Of course, my father never talked to me about money growing up. He never talked about saving or spending or investing or anything. How was I to know about financial responsibility?
At age 20, I got my first credit card and so began my decades of debt. I am 45 years old and for the first time in my life I am credit card debt free. It is an amazing feeling, one that I can't really describe.
I don't want to make the same mistakes that my father made with me. I want Princess to know and understand money. I want saving to be second nature. I want to offer her the opportunity to learn about financial responsibility without "teaching" her. At first we started with an allowance and a fairly sizable allowance. She was to use her allowance to buy the things she wanted. And with that, I watched her do exactly what I did. She saved until she had enough to buy the thing she wanted. Obviously, this wasn't working.
Time for a change.
We went back to buying her the things she wanted. But how do we share the practice of saving money? Then I came up with this idea. We continue to buy her the things she wants AND give her an allowance with the express purpose of saving this allowance. We've talked about donating money to causes. Princess has decided to donate to Village Home. It is up to her to decide how much she would like to donate.
We also talk to Princess about money. We talk about how much money we have and what we can afford to spend. We talk about saving and credit card debt. We talk about our struggles with money. We don't keep anything a secret and she is free to ask anything she wants to know about our money.
Is this the answer to learning financial responsibility? I have no flippin' idea. We're just doing the best we can in the hope that she won't have to go through decades of financial struggles like we have. At the moment she is pretty darn excited to watch her savings grow.