Wednesday, May 21, 2008

Money money money

I'm having contractions, or else Dinkypie is digging his fingers into my cervix in a wild escape attempt, so I decided to think about money instead.

Recently, I have avoided thinking about it at all, and until about a year ago I was pretty manic about checking the online banking, etc. Then I relaxed a bit and only checked a couple of times a day. In the last few weeks---that avoidance has become utter oblivion. And today I thought, what the hell, let's get back to earth; pay a few bills.

Mostly because I've been thinking about how we teach our kids about money and bills and budgeting---and what impact does this have on our economic choices as adults?

Mr.Cotta grew up with a lot of money, and at one point, they no longer had it. So he has known highs and lows and hates being in debt and without the ability to spend freely. He also though, is not really into the middle ground of budgeting and spending calmly. He doesn't want to know how much things cost. Even though he knows he has too. Poor guy.

I grew up with nothing and my parents never taught me anything about finances or how to handle money except for overheard conversations about losing the house, and how we had no money for food that week, but my mother had run up yet another $300 phone bill calling her relatives up north, or how my dad had done something else stupid and run up a credit card bill he could not pay. I never had an allowance and never had any spending money, so if I ever did get money, I didn't know what to do with it and blew threw it in seconds. My parents stole the money my grandmother had put into a college saving account for me, and when I got into university, there was no money, and the student loan program disqualified me because of their bad credit rating. I had to wait until I had lived on my own for three years to qualify for any loans at all. I worked as a waitress and a bartender to support myself in the meantime, but since I had no idea how to save or budget, I racked up my new credit cards and bought too many dumb things I simply did not need.

Paying that off and learning how to plan out my spending during university saved my ass, and let me eat. I hate debt as much as my husband, but I also know that sometimes you need to use it for certain things, like mortgages, or buying cars, or home repairs, etc...and yes, sometimes for buying necessary items when you are cash short. I've admittedly become unreasonably obsessed with RESPs for my kids due to my own history. I'd rather die than ever tap into them for my own uses or household bills. (Yes, some people get so broke they have to take money from the kid's college accounts, to pay for food and rent, but we've always been a loooonnnng way from that. My parents never needed the money for anything necessary, they just felt like being shitheads.)

So I've tried to teach my own kids about money, telling them how much things cost, talking about paying bills, and giving them an allowance so they could practice saving, spending, and giving money to charity. At one point we debated tying it to chores and only giving them money on special occasions or from the tooth fairy and we started out that way. But it became too difficult for Kaz to earn enough money to do anything. And the whole point of the exercise was lost, because he never had any money to manage. We changed it so that chores are simply an obligation of belonging to the family that they have to do no matter what. No choice, although we do change chores around during exams, etc. because we want Kaz to focus on homework then.

So now, we give them one dollar per year of age per week, 11 dollars per week for Kaz, and 8 dollars per week for Mac. They both have savings accounts and they deposit money, they give money at church and they have money for candy at the store....for my part, I (mostly) only give them presents on Christmas and birthdays, and if they want something in the interim, or something too expensive for Mommy and Daddy to justify, they pay for it themselves. Kaz is a miser, I think he has the first dollar we ever gave him and Mac is totally spendthrift.....can't stop himself from buying stuff. So we've had to make Kaz spend money on stuff, and forbid Mac from doing it. It's pretty funny actually. It's amazing what they decide isn't necessary to buy when it's their own money coming out of their very own wallets.

So that's what we do. And our neurosis around it.

What money habits did you grow up with? And what have you taught your kids? (if you have any) If you have no children yet, then what do you intend on doing?


  1. Now that I look back, I know my family was fine financially, but while I was growing up I thought we had all kinds of money problems. I think my dad is a bit of a miser and he was always complaining about the money my mom was spending and then he'd go spend a lot of money or 'd bheuy us really expensive christmas presents sometimes. But all the moaning about bills made me sooo afraid to spend money. I started working and buying my own clothes in highschool, not because my parents wanted me to--they never even mentioned it, but because I was so afraid to ask for anything that wasn't necessary.

    Fast forward to graduating from college with massive loans, getting married and moving cross country and trying to find a job. I felt bad because he was the one paying off my debt and it took me a while to find a job, and even when I did I wasn't getting paid enough to make all my payments. I think I spent the entire first year of our marriage asking my husband if it was okay every time I wanted to buy anything, even a book or new socks. He got so tired of it that he set up this budget with a certain amount allotted for each category and I was free to spend whatever I wanted so long as I paid attention to the budget and didn't go over (and he had to follow the budget too).

    Now a few years later I was just telling him the other night that maybe he should've stuck to the way things were because I spend waaay more money now, ha ha!

    In general though we are pretty good about spending and live debt free. We use credit cards but pay them off all the time. We'd like to buy a house in a few years so obviously we'll go into debt for that, but we try to avoid it as much as possible. I have to say it is pretty nice to live debt free. Part of me would rather rent long-term than buy a house.

  2. We both grew up poor, and my mom always said my "job" was school. I working during college, but mainly relied on loans so when I graduated I had a LOT of debt. Took 10 years to pay off; DH paid as he went so he always worked a lot during college. He wants to pay for our kid's college outright because he never had much time to do anything else during college, but I disagree. I feel like I didn't really learn how to manage money growing up, and it sure didn't hurt me to have to pay off the debt... I learned a lot about budgeting, and how to value money, etc.

    We just had a month of conversations just to be able to agree about an allowance for our 5 YO! I wanted to do the $1/week per year of age; he thinks that's too much. I want her to save a portion each week, he doesn't care about that. We agreed to try his amount first ($0.50/year/week), and we'll figure it out as we go. At least we are not tying the allowance to chores; that last thing we need is another topic for battles with our girl! We agree that chores are just things we all do as members of the household; none of us get paid, unless she wants to do something extra or something we might otherwise pay someone to do.

    I just hope our kids become more financially proficient that I was growing up.

    Hoping your labor progresses!! :)

  3. Bad ones. I am not sure what we will teach Samuel. Josh and I were just discussing how we'll handle grades and homework yesterday, and my only answer was, I'll need to wait until I know his personality a bit better before I can know what will work best for him. So we'll see.

    I'll probably teach him capitalism is heartless & deceiving and really, all the talk about saving is about making those without think they're too blame for it and those with a lot to think they earned it. Not to say that on an individual level saving and careful spending doesn't help.

  4. I think that attitudes towards money are influenced as much or more by innate personality as by environment. See, e.g., Kaz and Mac.

    My son is very responsible about dealing with money, but I don't take any of the credit for that. It's just the way he's always been.

  5. My husband thinks I'm completely financially inept because of the errors of my parents. My dad was an alcoholic compulsive gambler who pilfered my college funds to support his habits, and my mom spends like she has more money than she really does. I'm not like either one of them, though because my husband is erm, financially prudent (read: stingy - just don't tell him that), I seem like I'm really liberal with finances. Hopefully our daughter will be somewhere in between, though I don't hold out much hope. Last year, with no apparent interest in crawling, she spontaneously crawled across our entire living room to get to her dad counting money on the floor. I'm fucked.

  6. Oh, I'm just laughing at your last line, sooo hard, Ms. P.

    I'm betting it's just because the coins were shiny! Don't worry, over time, he'll relax about money and trust you more and she will bend him a bit as well.

  7. My parents both grew up really, really poor and were really, really poor for the first 10 years of their marriage. After that they were fairly well-off but still really frugal; my dad still takes apart dead appliances for screws and working motors, and my mom still shops at Goodwill. We got very small allowances and had savings accounts and all, but could ask for things, though mostly we didn't get them. My parents would actually sing the Rolling Stones song 'You can't always get what you want' every time we whined. Every time for 18 years.

    I started working when I was 16. Dr. S grew up really really REALLY poor so we're both pretty frugal. It's funny b/c he just never buys anything and I still feel guilty that I bought two paperbacks last month. In one month.

    But on the plus side, we have saved/invested really a lot of money in the last few years. Being cheap pays off.

  8. We grew up comfortable - neither wanting, nor having. No fancy vacations, but new shoes when needed.

    My mother used charge cards - she had a card for every single department store in the area. And they always paid the bill - it was just a convenience thing. But me? I was shockingly old before I realized that you could go to Macy's and PAY CASH. I didn't know they took cash. I thought they only took charge cards.

  9. I was brought up to belive that living in debt is the American way of life, by parents who did not know how to live within their means. I was acutely aware of money growing up; we had cousins who were multimillionaires so I could see the diffrences between what they had and what we had. Worse, my parents, in their own way, tried to compete with them! We went on vacation together (twice), and went to the same, very expensive private school as their kids. While these costs wer noting to my cousins, it just drove my parents deeper into debt.

    I was always cheap, but I really learned the value of budgeting when I moved in with my husband (as a roommate). $25K in debt at 25 years old, he showed me how to budget my money and pay off my highest intrest rats loans first. It took 4 years & 2 jobs, but I got completely out of debt and started saving my money.

    Now, years later after buying a house and going though 5 rounds of IVF (not covered by our insurance), we're in debt again, but we're almost out. I handle all the finances (my MIL handles our investments - the woman, while she sometimes drives me nuts, it absolutely trustworthy).

    We plan on teachng our son that money needs to be earned and cared for. Investments must be researched. He's only 2, but as he gets older, I'd like to hear from more parents about their advice and how to teach kids about money.

    What a fascinating topic, A! I hope you're feeling better. I wish you and your family all the best during this exciting time!

  10. Whooee! I was born back in 1949. My parents grew up in the Depression. We weren't poor but there weren't any big extras like vacation trips or second cars or restaurant eatin' or university education funds. When I was in grade school, I got a quarter a week and Mum would encourage us to save it up for something big. We usually blew it on some trinket or junk, though.

    I often got a buck or two for rakin' an old lady's yard or cuttin' somebody's lawn.

    Best thing I learned from Mum an' Dad about money was simple budgeting. First time Istarted gettin' any steady income (workin' sortin' and stackin' pop bottles at the corner store, $4/week) I was taught how to make a list of where I intended my money to go and earmark a certain amount for various categories. Have a budget and spend within your budget.

    That simple method has pretty much seen me through til now. I'm debt free, mortgage-free, Ma an' I own our little shack and there's a wee bit o' money set aside for retirement.

    I ain't sayin' I haven't had some times when I let the debts pile up but I learned early on there ain't much sense in payin' interest on loans on stuff you don't even need.


  11. In typical bipolar style I go back and forth from spending wildly to pinching every penny. All the while of course, having the same amount of income, which is pretty low. I grew up without much money in the family until my mother remarried then there was a lot more money around, although that was after I had left home. One thing I am constantly amazed by is how little I really need to make in order to be happy.

  12. My memories of money as a child are not pleasant. Mom was (honestly I don't know) mentally ill and very obsessive about spending and bills and stuff. Most of the time I had two pairs of jeans for school and a few shirts. And I had more clothes then my brothers. We had paper roughts and split the cash for toys and spending money. But at the same time, mom would blow a thousand dollars on gardening or crafting supplies (her intersts, not ours).

    We always had food though. And because she was a disabled vet, I was able to get through my undergrad years relatively undebted.

    My dad, on the other hand, was known in three counties for passing bad checks. He was a sloopy alcoholic most of the time he was around when I was a kid. He would filch money from mom, from us, where ever he could to get what he "needed". He even pawned the tools he needed to work, mom or someone would have to go get them out as soon as possible. I think he baught his own drill a hundred times over and over.

    My attitude towards money? I try very hard not to spend what I do not need. I have tried allowances with my oldest, but he ends up spending it on junk food for him and his friends. I have tried making him save, but its a huge fight. Earning it with chores and good behavoir, that doesn't work. He doesn't do the chores and then tells me he didn't want allowance anyway. I am thinking that a hybrid system, where chores are comulsury and not doing them causes him to loose money is what might work. Too soon to tell.

  13. Money, shmoney, my blogreader says this was posted 19 hours ago and I want to know what happened to those contractions!

  14. I have a terrible, awful, debilitating fear of being broke, in debt or poor. I have no idea where it stems from. I grew up with all kinds of luxuries and things. I don't know where my irrational fear stems from, but it can be paralyzing. I hate debt. I hate not having a nest egg. I won't spend money I don't have. I hope to one day teach my kids the value of a dollar without passing my irrational fears on to them.

  15. Your allowance program for your kids sounds like a good one. As for me, we did not have a lot of money when I was growing up -- although growing up in small Prairie towns in the 1960s & 70s, nobody really did. It wasn't like today, when every kid seems to have a TV in their own room & expects to go to Disney World or Cancun for spring break. We'd maybe go to Winnipeg or Grand Forks to shop for a day, if we were lucky, and Levis corduroys were were considered the height of fashion, lol (you'd only wear cords to a dance, and only after checking with all your friends to make sure they were wearing them too, instead of just jeans).

    Ironically, my dad was a banker, & because of that, everyone just assumed we were loaded. Yeah, right. We're talking small-town branch manager, not Bay Street executive. We lived in bank housing (paid rent) & didn't own a house until I was almost done high school.

    Anyway, my sister & got weekly allowances, until we were old enough to start babysitting & working part-time & earning our own spending money. We both had student loans for university & worked summers to chip in for the cost.

    I'm the spender in our relationship & dh is the saver. We did have some credit card debt problems early on, when we were both just starting work, but the last 10 years or so, we've reached a comfortable place. (The Prairie/Depression frugality mentality I grew up with won out, lol.) FIL helped us with a downpayment for our house, but we paid it off ourselves in 11 years on a 25-year mortgage term. Any bonuses or income tax refunds we got would go towards the mortgage, & since then, we've put the same amount of money we used to spend on the mortgage into savings. We eat dinner out only on Saturday nights. We rarely drink. We haven't taken any/many expensive vacations to date, & don't have a lot of "toys." Our biggest extravagances are probably books & buying lunch every day at the office (both of us) & scrapbooking paraphernalia (me). I like to shop for clothes, but the Gap is about as expensive as it gets for me. The only thing I buy at Holt Renfrew is Clinique cosmetics (which cost the same as anywhere else -- but Holts gives better bonuses), lol.

  16. Oh, it's really hard to make money when you're born without silver spoon in your mouth. That is why most parents nowadays try their very best to teach their children about the importance of money and savings. People who know how to earn a living at a young age are just amazing. Yet, sometimes debts can actually help us survive, especially when we need to pay bills and other extra expenses.