Generational Spending

There are many things that can be passed down from generation to generation. Some things are great and others not so; your height, weight, the color of your eyes, an inheritance, and lesser known things such as penis problems, athletic ability, and mental health, even your dislike of going to the dentist can be attributed to genes you’ve inherited from your parents. Now let’s talk money. And sure, it would be great to inherit, well, an inheritance. Of which many of us here will not. So for 99% of us we have to rely on our smarts to make a good living and hopefully pass something on to our children. Not a Bill Gates inheritance, but something. Before we jump THAT far ahead, you should be aware you are passing things onto your children already. Just as your parents taught you, consciously and unconsciously how to spend money, you are teaching your children how to spend with every paycheck. Whether you cash your check in person, or have direct deposit, every action you make while spending your money is teaching your children how to spend. And if you don’t think your children are thinking about how you spend your money – well think again.

Here are some stories about the spending habits people inherited from their parents.

Julie saw her Mom save and squirrel away money for large essential things, such a great stove, a new, larger couch for the entire family, and also for fun things which made saving easier. She remembers going on great trips with her family because her Mom and Dad saved for them and they refused going into debt for a vacation. “I’ve learned to save for things I love, and for things I need, but it’s the saving for things that make my life more fun, so much easier.”

Whereas Sandra saw her mother spend her hard earned money on up to the moment handbags and purses and shoes and sunglasses. I was the best dressed kid in school, I wore only designer clothes and everything was always “in-style”. My Mom’s bills were another matter, she never paid anything on time, she was always late for the car payment and often bought a new bag over making the car payment. There was more than one night where we ate out because she didn’t pay the light bill. I had the hardest time learning better ways to spend my paycheck, but I vowed I would not have the money problems my Mom had. And I’m making a promise to my kids to show them better ways to handle money.”

Jerry had a clear view of both, “I had a Mom who saved for everything, looked for the best deals and never wasted money on things she didn’t need… and my father was the total opposite. I was brought up with parents who had differing views on the finances of our household. Spend, spend spend or save save, save. There has to be a healthy middle on this!”

Children learn by example and how you spend your money is a pretty clear view of how your children will spend their money. Fortunately for children, they can learn faster than we can which means you still have time to get your finances in order and teach your children good spending habits for a sound and bright financial future.

Here are some basic lessons you can teach your children and yourself about having control of your finances, no matter how much or how little you make.

Debt. If you’re concerned about teaching your kids about debt you need to show your kids that keeping a handle on debt is important. Learning to live below your means is the optimum goal, and teaching your children to go without until they can repay for a purchase is a valuable lesson. Create a real life scenario where they have to repay their purchase and until they do, they have to cut back on other things. Teaching your children to save for a purchase is even a stronger lesson.

Attitudes. Try to send consistent messages about spending to your children. Whether you’re a single parent or two parents it’s important to send consistent messages to your children as you navigate money in everyday life. Talk about money – don’t argue about money.

Work Ethic. You should discuss with your children “why you do what you do” to earn a paycheck. Talk about different types of jobs out there and all of the possibilities associated with their interests. Parents can encourage their children to identify what they might like to do, how they might prepare for a certain field, what it would pay and where jobs can take them (local, the city, the country). Remember the days of staying in one job for 25 – 30 years and retiring in that job are long gone. Most people will have an average of 8 to 12 different jobs in one lifetime. Encourage all their interests.

Saving. Saving is probably one of the hardest things for native people. We tend to live in the here and now, so why save for retirement when we can to go to Myrtle Beach next month? Saving your money can be divided in four areas; large ticket purchases, fun activities (the beach!), emergencies and yes that dreaded thing called – retirement. Saving for a future goal doesn’t mean sacrificing everything in the short term. The better you can become “goal oriented” the better you can delay instant gratification of buying that $150.00 purse at TJ Maxx for the sake of saving for a larger purchase or to fund a dream. And maybe the purse is the dream. So pay your bills and save for it. The purse will look so much better on your shoulder when you can see it with the lights on.