Prepping Kids to Leave the Nest
Posted by John Draper | Filed under Budgets, Kids & Money, Money Management
Alex has another year and a half with me and then, all things being equal, she’ll be heading off to University. Maybe. If she can get her crap together. That’s pretty well how most parents feel when it comes to watching their teenagers approach that age when they’ll be stepping out on their own. We want to do whatever we can to help smooth the way. But sometimes “smoothing” is taken to the extreme and our kids leave home without the good sense God gave a goose!
Prepping for a life on their own starts early, much earlier than most parents think. Whether it is learning how to cook – making KD in the microwave doesn’t count – to learning how often to change their sheets, clean the toilet, or sew on a button, having never been told what to do, or how to do stuff, kids are at a loss. Like the kid who puts tinfoil in the microwave and then claims “but I didn’t know,” your child could be ignorant of some of the things you take for granted, including how to handle her money.
When kids are small, we have no problem redirecting their behaviour, giving them step-by-step instructions for how to do a new task, or patiently watching as they master a new skill. As they get older and start pushing back, we are scared about doing anything that will alienate them. There already seems to be more distance than we want.
Sure, there are the parents who regularly make their kids clean the house from stem to gudgeon. But I’ve been with those kids as they talk about “escaping” home and never coming back once they break free of their parents’ control. One girl I know whose mom refused to allow her to come to a mixed sleep-over party the weekend before she left for university probably doesn’t know that her daughter refers to her as “The Nazi”. Ouch!
So we walk a fine line between helping our kids acquire the basic skills they’ll need to go out on their own and letting them have the space they need to make – and learn from – their own mistakes.
At the very least, our kids should have some sense of what it takes to keep body and soul together: how to clean up after themselves, how to buy and prepare some basic meals, and what to do in the event of certain types of emergencies. That’s not to say that once they leave home you’re cutting the apron strings completely. But it does help for them to know a little somthin’ somethin’ about dealing with the life they’re about to have.
And through all the life lessons there are money lessons you need to be weaving. How to grocery shop on a budget; how to prepare meals that go a long way; how important it is to have a stash of cash just in case the caca hits the fan.
There are the seven essential money skills I think every kid should have before he breaks out on his own. You won’t be surprised at any of these. Not really. So this is your opportunity to take a good look at your kid to see how good a job you’ve done thus far teaching the important money lessons. I’ll cover the first essential money skill in today’s blog, and the rest over the next few days.
Essential Money Skill #1: How to live on a budget.
The thing about a budget is that it not only shows you where you’re planning to spend your money, it asks you to make choices every time you get the urge to spend. Want to go to a movie? If you don’t have any more money left in your entertainment budget, will you use your food budget or your transportation budget to see the flick? It isn’t about NOT seeing the movie. It’s about what else you’re willing to give up to see the movie.
The idea of living on a budget also gets kids used to the difference between their “needs” and their “wants”. They can spend more or less in a particular category of their budget, but they cannot spend more money than they have, so it’s important to understand what their Essential Expenses are: that’s the money they’ll need to spend to keep body and soul together.
TO DO:
Sit down with your child and talk about your own budget, how it works, why you use it, and what it helps you achieve. Never mind the whole “privacy” crap. This is your kid, and if you can’t use your own budget to teach him a thing or two, you’re missing the mark completely as a parent!
For several months before she leaves home, have her work on your budget with you.
Have him make a budget for moving out on his own. Whether he’s leaving home to work or to go to school, if he goes with a plan in hand, he’ll be that much more likely to succeed. See this article for more information. It talks about how to use a cash flow for managing money, which is the single best way to learn to budget to the dollar.
Keep your hand out of your pocket. If you keep bailing Bunny out of the hole every time she digs one, she’ll never feel the pain and she’ll never learn. Once you’ve established the parameters for how you will help, stick to it. If you’re offering to pay $50 on the cell phone, don’t cover the $100 bill. Pay your $50 and watch the service get cut off! It’s hard, I know. But you know what? It’s way easier to do it now than when she’s got two kids in tow.
Next: Essential Money Skills #2 & #3.
January 5, 2009 at 6:46 am
Gail my DD will be leaving the nest @ the same time as yours! As I’ve been learning how to manage my money, I’ve been talking to her about the process. I wasn’t sure if anything was sinking in until this past Friday. I almost hit the ditch after picking her up @ the train station Friday night as she had been away all week and was telling me about her spending.
She left home with 118.00 in cash and a couple of gift cards. She came home with 50.00, and proceeded to tell me that she prefers paying for things in cash, as she can physically see when the money is going as opposed to using her debit card. She’s already said that she doesn’t think she’d be able to manage a credit card for a long time (LOL). Thanks for the great advise and can’t wait for tomorrows post!
January 5, 2009 at 8:48 am
Gail: Wonderful post.
My son is just 3, so there’s lots of time to teach him. Your wisdom will certainly help me when the time comes to teach him about money.
I encourage him to help me bake and clean. he thinks it’s great fun! – atleast for now! lol!
When I see my aunts & uncles “bailing out Bunny” I just shake my head – they aren’t learning a thing. One moved away and didn’t even know how to use the washing machine. It wasn’t long before Bunny was back in Mommy & Daddy’s cozy nest.
Sam: That’s is so wonderful that your daughter recognizes that a credit card isn’t the best choice for her right now. have you talked to her about establishing credit? Maybe she could have a small credit card that she just uses to pay one or two utilities. She could set up the bills to charge to the card and then she just pays the bill each month. She could give you the card and then the shopping temptation isn’t an option – plus she’s establishing a great credit history.
January 5, 2009 at 9:27 am
I see this happen all the time – parents thinking they are helping and then it bites them in the behind. And then the young adults don’t know how to say no to themselves because they nobody ever said no to them. Over the holidays I was talking to my younger cousin and she told me that she had maxed out her student loan, her lines of credit and her credit cards (cash advances no less!). I think she is used to being bailed out by her parents or older brother… it probably doesn’t help that her friends all have similar tales so it may be harder for her to see what’s wrong with it.
I would love to sit my cousin down and have a good talk with her and try to help her out (with knowledge and skills, not money!) but I suspect that she may not be receptive. hmmm.
January 5, 2009 at 9:50 am
I think Frugal Graduate brings up a good point. Be prepared for your kids to be non-receptive, at least at first.
My mum tried so hard to get me to build a budget when I was going off to university, and let me tell you, it fell on deaf ears. At the time, I just wasn’t willing to sit down and seriously think about my money- and thought that a budget meant spending money in a hard-and-fast way, a commitment I wasn’t willing to make at 17.
But fear not! I might have been responsive at the time, but her words stuck with me, and I’ve since discovered the joys of a budget (and yes, I mean joys). They might not be responsive the first time (or second, or third), but the message will eventually get through.
(The fact that I refused to ask my parents for financial help- nor would they likely have given it to me- didn’t hurt either)
January 5, 2009 at 11:01 am
Your blog today speaks volumes. By not preparing your children to be financially responsible, you are setting them up for failure. Teach them well. Teach them young. Make sure your own house is in order too. Bad habits continue through generations.
January 5, 2009 at 11:52 am
Unfortunately a budget only works with someone who can be rational about needs vs wants. This leads to the situation where the 30 year old entitlement ostrich calls her mother and tells her that she’s broke, owes thousands and is going to take a job as a stripper to make money because anything else is hopeless. Mother pays the debts. The not-so youthful is planning to leave again, but I’m not sure any lessons have been learned. I have done what I can to stiffen Mom’s spine, but when push comes to shove, I know she will bail out the Foolish One rather than see her suffer.
January 5, 2009 at 12:25 pm
I think it’s so important for parents to talk to kids about money. i am not a mother but i do wish my parents were more open about it when I was growing up. My parents were so private that I never knew what kind of income bracket we were in and still have no idea how much my parents make, nor what kind of mistakes they have made, nor if or how they budget. They think it’s completely inappropriate to reveal this kind of information to anyone. But I think that openness is so important, especially for children and I wish I had more of this guidance growing up.
January 5, 2009 at 1:04 pm
It’s a fine line to walk, teaching your kids about money. My mom was TOO open, I think, worrying out loud about bills and such. It left me worried about finances when I was too young to do anything about it. On the other hand, as an adult I am very responsible financially, and that could be why.
Thanks for your suggestions, Gail. My own little one is almost 4, and I think it’s time for her to start learning about money. I’ll be reading all of your Essential Money Skills and filing them away.
January 5, 2009 at 1:35 pm
I too was never ever privy to my parents financial affairs. To this day, it is considered rude in the extreme to speak about money specifics (salary for example) in my family.
BUT, at the same time, my parents were extremely budget-minded all through my childhood so I guess I absorbed the lessons (in theory anyway…) without the details. We were brought up to realize restaurants were a special treat, only one drink ordered (even now my Dad can’t help but frown when someone orders a second drink!), that bills were always to be paid in full, that homemade is better (all around – not just in cost) than store-bought, that if I wanted brand name clothes I could find myself a part-time job. When I look back at it now, I realize I never felt deprived. Why? Because even on a single-income there was always funds (within reason) for music lessons, activities, vacations, healthy food and a comfortable home *because* my parents knew how to live on a budget.
I guess the moral is it’s possible to teach all the right lessons without laying out your bank accounts to the scrutiny of your children.
January 5, 2009 at 2:45 pm
It reminds me of the old saying (goes something like this):
“Give a man a fish, he will eat for a day; teach a man to fish and he will eat for a lifetime”
January 5, 2009 at 3:06 pm
Hi Gail
My daughters aged 17 20 and 22 manage their money great. They had a paper route for about 10 years about 10 years ago and would save most of their earnings. My 22 year old has a credit card but pays it in full every month. They all have great savings accounts with ING. They have also had part time jobs since age 15 so pay for most of their own clothes. I think the paper route helped, paying for most of their own wants and watching me and my husband save. They do all live at home though so dont really know how theyd be on their own. Gonna work on that cooking thing though as theyve shown interest in baking but not cooking. Since i do home daycare and am home always it has not been necessary. They do their part of the cleaning. Cant wait to read the continuation.
January 5, 2009 at 5:32 pm
Just read this article in Moneysense – http://www.canadianbusiness.com/my_money/planning/article.jsp?content=20081201_20001_20001 My budget includes RESP contributions each month, but that doesn’t mean my 17 year old will get a free ride. He’ll have to earn that money by proving he’s ready to go, i.e. good marks and the proper attitude towards education. A “victory lap” at high school is a lot less expensive than a failed first year away at university because they’re not ready to work hard! He’s put away 50% of his earning since he started getting an allowance at 7 so he’s socked away a good portion to contribute. He’s very frugal and is FINALLY taking an interest in cooking meals – even simple things like chili and soups – inexpensive but healthy and satisfying. If he can get a decent summer job, he could graduate with minimal debt which would be great. Gosh they grow up so fast!
January 5, 2009 at 10:10 pm
Arthur J…. She should let her be a stripper! (If she could be trusted to stay away from the drugs). I know a few intelligent women that put themselves through school debt free with that job, and on that used her “dancing” skills to travel and work around the world! Not everyone is young and slender enough to pull it off (pun intended), and an intelligent woman CAN stay clear of all the bad stuff that can be a hazard of the job if she can stay clearly focused on her goals.
As far as my life, I see more than one person had parent’s like mine that saw talking or asking about finances as “rude”, it was a steep learing curve figuring out how to budget and balance when I got out on my own.
January 6, 2009 at 11:13 am
I too grew up in a family where money just wasn’t talked about. If we couldn’t afford something the answer was just NO, without explaination. My biggest financial lesson came from my grandfather: “take this money and put it in an account and soon it will be even more money”. Simple, but true, I suppose.
Kids need to understand need and want and understanding that your financial means dictates that will make life eaiser for them in the long run. Its also important that they understand that living within your means does NOT mean that you are poor. It means that you are smart and will ultimately be better off.
Thanks for the great information, Gail. I’m already teaching my 4 year old about choices. She wants to go to Disneyland and I use that as my teaching tool: we have to save our money, buy the no-name popsicle instead of Dora ones (or none at all) and decide if we need something before buying it in order to save the money to go to Disneyland. It seems silly, but its sending the message where she is at and so far she is willing to listen and accept things as they are.
March 12, 2009 at 10:51 am
My husbands parents told him they couldn’t afford things he wanted growing up. They should have said thats not something we want to spend money on because they could afford those things. They had, and still have to an extent, had him believing that he will be destitute if he doesn’t hoard all his money for the glorious “someday” way down the road. I believe in having your bills paid and a healthy retirement savings however alot of my family members never made it to that magic age. He doesn’t see the attraction of a vacation just for relaxations sake. He only thinks of the money “wasted” with nothing to show for it. Even now according to the experts we’re well off, but he thinks if he lost his job or couldn’t work that we’d be poor. I’ve tried telling him that if worse comes to worse we can get retrained for other occupations with our savings and or investments but he doesn’t get it.
September 9, 2009 at 8:33 pm
Great advice, Clearly explained and easy to follow. Thank you