Raising Cash Smart Kids

It is sometimes really difficult being a parent.

Who am I kidding? It’s OFTEN very hard being a parent.

We had one of those difficult situations at our place last week. My oldest, who has been quite sick and unable to work on her business for the past few months, is basically trying to keep up with her friends and their lifestyle on her “sickness benefit”, aka her allowance of $20 per month.

This weekend was a three-day weekend, and her group of friends has planned two trips to the movies and a shopping trip to the city. She didn’t have any money, and she asked if she could borrow some.

Now, as you know, we don’t do loans. And especially since this loan would have been an advance of three months worth of allowance!

I explained to her that she has to live within her income, even when it’s small.

We have a close friend who came down with chronic fatigue a couple of years ago, and Sam is well aware that we give this friend money each month because the government sickness benefit is not enough to cover her basic rent and food needs, let alone pay for medical treatment.

I pointed out that Sam is in the same situation, and her friends need to understand that she simply can’t afford to do these things. The real friends will understand.

This developed into an interesting conversation about another girl in her group of friends who is getting a job because her parents won’t just keep giving her money any more. This girl would rather not be doing the expensive stuff, either.

It seems that there is a whole group of kids doing expensive things like going to the movies and ice skating, spending money they don’t have, all because they don’t want to be “left out” of the group. I suggested that it might be a simple thing to turn the whole group around to low-cost activities, if my daughter and the other girl just took a stand.

Of course, at fifteen, that’s a scary prospect. Being accepted is everything.

But, to her credit, she went off to talk to this other girl, and in the end three of them opted out of the movies and did something low-cost instead. Along the way, they stopped on at a local indoor playground and filled in job applications.

She has wisely decided that working for someone else is lower-energy and more manageable for her than being entrepreneurial right now. I think it’s the right decision, and an enjoyable job is a good stepping-stone to bridge the gap until she is fully well again.

It would have been so easy to lend her the money.

I mean, she has been sick, poor kid.

But what a benefit she gained because I didn’t – she has taken steps to change the culture of her group of friends from pointless spending and keeping-up-with-the-Joneses to being on the lookout for low-cost fun. The benefits will not only flow to her, but to all her friends who get the message.

In the long run, she will have a group of friends who are much more supportive of her goal of financial responsibility, and the confidence which comes from challenging a group norm and shifting it. For the rest of her life, she will know that she doesn’t have to do what everyone else is doing, just so they won’t reject her. She has learned that if she leads, others do come with her.

Absolutely priceless lessons.

And if I had lent her the money, she would have had none of those lessons.

It was emotionally very difficult at the time, but she and I are both glad now that I stuck to my guns and didn’t lend her the money.

Review of Hubs on kids money, ways for kids to make money, teaching kids about money, allowances, jobs for kids, saving and investing for kids.

What is the best way to teach kids the value of money? Link allowances to chores? Or should they be doing chores as part of their role in the family, without expecting payment?

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