When I went away to college, living away from home and being on my own was such a blast. Some of my best memories of school were in that first year -- dorm parties, my buddies on the second floor of Kreuger Hall, football games, and being surrounded by a small city of people my age. Heaven!
I was going to school full time and working between 10 and 30 hours a week to pay my way. I also got a checking account for the first time. Damn, I felt grown up. And then I started bouncing checks.
My dorm mates and I used to joke that we couldn't be broke if we still had checks left. While we were joking, I knew that I was not good at keeping track. Who has time to balance a checkbook when there's so much else going on?
See, back then, they didn't offer credit cards to 18-year-olds; they saw it as too much of a risk. Of course today, they see it as a gold mine. Financially immature people can rack up big debt really fast, you see. And the fees! Oh, glory, the fees!
My kids are not going to get taken in by that.
I've seen several diaries on DKOS about the lack of real-world financial education for kids. As a mom, I'm determined to send my kids out into that glorious first year of college with a solid understanding of personal finance. Because I know they WILL be bombarded by credit card offers. And while my daughter is a saver, my son is a spender. I'm trying to teach them how to save and spend wisely.
What I definitely don't want to do is to raise them feeling like money is scarce (although we have tended to be strapped). My husband and I both come from families who maintain a Depression-era attitude toward money that has been hard for us to move beyond. I want my kids to be free from that mentality.
But I feel like I've walked a thin line. We've always had a policy that we only buy them toys for their birthday and Christmas. When we occasionally break that rule, it's a treat that they really appreciate.
It is challenging. Most of my son's friends have every video game console available; my son mowed a bunch of lawns to earn money to buy his WII and his Nintendo DS -- and he's really proud of that (and he's always wanting to sell things on eBay; I swear, we'll all be working for this kid someday). And my daughter is saving up for an IPOD. I think both know that we don't have much money, but they also know that the best experiences in life don't cost a dime.
I think we've got a good start on helping them understand how to handle money. In the next year, we're going to sit down with them and go over the family budget. They'll understand how much we earn, how much we spend on the house, food, and other necessities and how much we're putting into retirement and savings. And how much we're saving for their college. (I'm waiting until my 10-year-old is mature enough to understand that this info is not something to share with his friends on the playground...)
And like so many my age, I could kick myself for not plowing money into a retirement account starting in my early 20s. But see, I felt so broke. I needed to buy stuff. And I know my kids will feel the same way. But unlike our parents, we are going to sit our kids down and explain to them the importance of paying themselves first. I've already started this talk with both kids -- and when I told my son he could easily by a millionaire by the time he retired, that really caught his attention.
I started thinking about all this the other day when I ran out of checks. Thank heavens there's still money in the account.
I'm curious what other KOSSACKs are doing to raise financially savvy kids. Care to offer tips?