What I Wish I’d Known
Posted by Gail | Filed under Kids & Money
I will be on vacation this week. You won’t hear from me again until next Monday.
Christy, you won last week’s prize so drop me an email at getgvo@gmail.com with the word WINNER in the subject line and your mailing address and I’ll have it off to you next week when I’m back. This week’s prize for sending in your “I Need Ideas” post is a copy of The Money Tree Myth. It will be awarded by random draw from the entries received between Monday and Friday this week for the Success Post.
I was reading one of my favorite blogs last weekend. At Get Rich Slowly JD was talking about what he wished he’d known when he was younger. He had just had an encounter with a young lad his wife, Kris, works with and it made him think about his own youth and how he wished there had been a manual.
JD wished he’d known about saving and the power of compounding, lifestyle inflation and the debt slavery that it can lead to, and how to save on the big and small things in life. As witness to the chord he struck, he had over 100 comments on that blog.
Some people wished they had starting saving earlier. Some wished they’d learn to shop more sensibly. Some wished they’d spent more on quality instead of always going for the deal. I think the thing that struck me the most about all the comments was the amount of regret they held. If only… It doesn’t seem to matter what we’ve done well, there are always things we wish we’d done differently
The thing that prompted me to write this is that there’s one thing we don’t get as young people that affects our ability to hear how important all the things JD was talking about are. I think many young people (and some old ones too) don’t get that taking care of our money is important. We don’t get that money won’t take care of itself. We don’t get that it requires effort on our part. And we don’t get that if we are lackadaisical about it, we will have Mother Regret telling us all the things we’ve done wrong.
I’m not sure what this comes from… this don’t-much-care attitude toward our money and the role it plays in our lives. It could be that we want to distance ourselves from the “money-grubbing,” “money means everything,” “money is what counts” attitudes some people display. We don’t want to be those people so we throw out the baby with the bath water. We spend years ignoring the most basic rules of money and then, if by chance we convert to Money Maniacs, we spend years trying to make up for what we’ve missed by becoming rampant Frugalistas. Or we come to believe that nothing can ever be different and that we might as well just blow it all now and have a great time.
Fact is people, money is the tool that gets us the things we need and the things we want. And since we work so hard for our money, we should be willing to work equally as hard making it do what we want. No control doesn’t mean you’re free, it means you’re stupid! And over-control means you become a slave to the tool. Balance is the key. We must balance today’s needs and wants with tomorrow’s dreams, while taking care of any mistakes we’ve made in the past. Balance is how we get to have money AND a life.
So how do you get through to your young person just how important it is that they save something of what they earn and that they put it to work early? How do you convince them that just because they’re making more money doesn’t mean they have to spend it all? How, in a society where credit is as common as air, do you convince the young-and-wanting that they should NOT use credit? And is the old saying, “take care of the pennies and the dollars will take care of themselves” really going to have an impact on our next generation?
Could it be as simple as the fact that money has to be important to each of us, we have to see its strengths and our weaknesses, before we take it seriously? So then how do we make the management of money one of those things – like brushing your teeth or eating right –our little peeps just DO?
I’ve had the really expensive car, the dumb investment, the lack of foresight. But I’ve learned from each of the things I’ve done with my money. When Mother Regret wants to whisper my shortfalls in my ear, I banish her and know that I’m doing fine right now.
I never got into deep doo doo because I had some very basic rules I’ve followed, ingrained in me by my parents, that kept me out of too-hot water: I’ve always been a saver; I’ve never carried consumer debt; and I know the caca can hit the fan so I’ve take steps to mitigate my risks. Sure I could have saved MORE money. I could have become an investment god, I could have acquired a slew of houses, income steams, or whatever else others have done to firm up their financial plans. But ya know what? I’m okay with the choices I’ve made, the time I took off to focus on my kids, the places I’ve chosen to live so I could make then-dreams come true. I’m quite content with the life I’m living even if it isn’t a supersized life.
I’m working hard to teach my children that you can have everything you want. You have to first decide what you want. Then you have to decide which are the most important at a point in time since you likely can’t have it all at once. And finally you have to decide how hard you’re prepared to work to make your desires a reality. All the while you have to PAY ATTENTION to your money.
How do you teach the lessons that you consider to be important to your next generation? Are you getting through to them? And what tools do you wish you had to make the process easier?
August 3, 2009 at 9:54 am
My mother’s frugality was a family joke.
Unfortunately, as a child the lessons of saving were not taught, only feelings of guilt regarding spending/wanting. Spending was evil and selfish/not spending was good and martyr-like.
I vowed I would never be as cheap as my mom.
Since I didn’t really learn about saving or investing, after I was a married and then divorced, I lived sort of paycheque to paycheque.
It was just good luck (and a good job) and not good management that prevented me from being in serious trouble.
Now, I have found Gail and learned budgeting. The irony of this is that I am at a time in my life when my circumstances have never been more comfortable and NOW I am becoming (semi)frugal.
I am now trying to teach my adult son financial management that I hadn’t been able to teach him by example earlier in life.
Gail is right, tho’, it is hard to teach to save when you can get credit anywhere.
I guess for all of us, better late than never.
Regret doesn’t make things better, it only keeps you up at night.
August 3, 2009 at 9:59 am
I wish that I had had a good loans manager explain the downfalls of using an LOC and I wish that there had been a quarterly meeting to make sure that the financials were all in line with getting out of debt so that I wasn’t exceeding my limits.
This of course is a dream when you don’t have someone to talk with about money – expecially when you’re not investing as these are the only other people to talk with easily other than the bankers of the world. Why are there not people to help you budget out there in the world and especially at the banks? Do you have to be so far gone to have to go to counselling services to find such people?
As to helping young people – I’m trying to give as much advice to read your columns as possible. I talk life pie when any time comes up to throw out the messages which you have generously written about. It’s one person at a time for me.
I’ve made many a mistake and I am trying to get back to really using my money properly so that the rest of my life will be better planned. I got lost and there was no one to talk with about my mistakes, maybe I was too hesistant to go to the bank (which took me in the first place and this I feel to be true) but I found someone who has been a blessing to me and who listens and gives advice now when I need it. Thank god for the wonderful people who come to rescue you in this world because I really needed it. Gail, thank you for all your wonderful advice. You have also shown me the way to proceed.
August 3, 2009 at 10:52 am
having fallen into the ’spend now worry about it later’ trap i accepted from a now long gone ex-husband, i’m glad i remembered the lessons learned from my immigrant italian family. the common sense lessons they taught (and which our gail so beautifully articulates in her blog) ensure my now financially stable life!
brava gail!
August 3, 2009 at 11:30 am
My kids are still very young – my oldest is only 4 1/2. While we’ve started an allowance with her that I hope will help her understand money, she still doesn’t really understand. I don’t know how effective I will be at teaching money to be honest, but I hope that by taking a conscious and considered approach I will be giving my kids at least a little bit of a head start.
Mostly, though, I just wanted to thank you for your consistently common sense approach. Your voice and your ideas are so helpful, and I really appreciate them. Balance in all things, including money!
August 3, 2009 at 11:40 am
I think I started valuing money more once I actually had some to work with.
As a kid, my mum had a very strict “allowance chart” system that meant that I effectively never had any allowance money to work with.
It wasn’t until I started earning money of my own that I started understanding the concept of money having worth, and being useful for something other than power + punishment.
August 3, 2009 at 10:26 pm
Parenting lessons only go so far, and can be interpreted and valued differently by each child…. me and my sister are examples of that.
We are very close in age, and had the same lessons drilled into us at every step. My sister started off so entusiastically, she had a “real” job at the age of 14 and loved working for the money (I waited as long as I could to enjoy my childhood and my parents told me to get a job at 16 — and I am the older sibling). But there was nothing I wanted in particular with the money, so doing extra chores and mowing lawns and babysitting was enough to cover my teen expenses. The car came much later for me, I was almost 18 before I got my license — my sis desperately wanted a car at 16 (and had to work for it). My sis went straight to work after highschool and I put myself through college (by keeping high grades, working part-time and applying for every bursary out there!)
Our personalities dominate our money habits more than our parent’s life/money lessons, and we got lots of ‘em! Sis wants it NOW, and so credit is her dear friend…. right into bankrupcy and up the other side. She is also an optimist in the extreme so believes she will always be able to afford the payments (even after bankrupcy!). And you know what, it seems to work for her. She is happy with all the good stuff and comfortable with her debt load…. it’s a debt load that would scare the life out of ME though!!! I like to defer purchases until I KNOW FOR SURE my life quality will not suffer with the cost. Sometimes by the time I save up for it, or decide it’s worth the payments, I don’t really want it anymore, so that’s fine too. My impulse shopping habit revolves around groceries (but only if it’s within the budget).
Long story short, I am trying to pass on the money lessons I have learned to my boys, how I avoided debt-pain, how we have money for the important things and emergencies… but I can tell already those 2 boys are taking in 2 different sets of input. I can only repeat often and hope they get as much as they need to make informed choices!
August 4, 2009 at 10:28 am
I totally agree with *pol. My parents didn’t teach me and my brother a lot about money, they were definitely a part of the “don’t talk about money” generation. Growing up, I had no idea how much my parents made, how much they paid in bills, how much they had in savings, etc I know they did not have a budget because I never saw one. However, I know that they were fairly frugal, my brother and I didn’t get everything we wanted growing up, but we got what we needed. I also know that they saved for what they wanted, and even what they needed – the plumbing in the house needed to be fixed for about 10 years before they were able to afford to get it fixed properly. They tried to impart at least the lessons of saving and being frugal to us.
For myself I think only now I’ve truly got the message (I’m 28). In my earlier 20s I spent every penny I got, mostly on clothes and other junk that I didn’t really need. I had no budget and my credit cards were always maxed. Now, thanks to Gail (and knowing that I want to buy a house and have my debt paid off ASAP) I feel that I’m finally using the information I always knew but never applied.
August 4, 2009 at 1:48 pm
I have vowed to be honest and open with my kids about money.. I to am of a generation whose parents didn’t talk about money – so I hit university and student loan applications with dollar signs in my head.. I had no concept of what borrowing $10,000 each year to finance my BA in Poli Sci (super useful btw..wink..wink) meant in terms of repayment- someone could have told me that I would have to pay $300 per month for 10 years and it still wouldn’t have registered -as no one had ever told me how much “things” cost in life- things like a house or a new car – I could tell you what a two bedroom apartment rented for but drive me through a neighbourhood and I would have ZERO idea how much a house would cost . I also never understood what an average salary was. So I assumed I would come out of university and make oodles of money so I could easily pay for all of this.
We currently have a billet that lives with us who is 19 and is currently playing for a junior hockey team- each year that he plays hockey with him he gets a year of post secondary tution paid for. I am trying to hammer it home to him that this opportunity is like your future on a silver platter.. I could tell it went in one ear and out the other becuase he commented one day (after a bad game) that he would just move home and go work at the mill- he can make $20 an hour. I proceeded to tell him that $20 an hour is a great wage at 19 or 20 however that doesn’t get you far as a family.. I still wasn’t getting through so I asked him if he thought my husband and I lived the high life and that we were rolling in it- he agreed no.. so I proceeded to tell him that between the two of us we make $64 an hour.. it was like the light bulb went on.. I went on to tell him how much our mortage costs, our van payments, childcare for two kids, heat etc etc..and that all that was on top of the $36,000 of student loan debt I had..
It seemed until someone laid it out in black and white with actual dollar figures it never hit home.. now he asks me all the time what things cost and how much would you earn if you did this type of job .. I think it helps put it in perspective when you see the different things around you and how much they cost.. he is so young and has his entire future ahead of him so I think having all the facts helps him start looking at where he wants to be in the future and how to get there..
He get’s now that if he wants a house, new cars,kids etc etc – $20 an hour just isn’t going to cut it
my boys are only 6 and 4 right now but I plan to be as honest as I can when the time comes- we talk about money now but anything past “do you have quarters for the candy machine” is beyond them..but one day!!..:)
August 4, 2009 at 2:36 pm
Amy — I have a history and political science degree and think it’s useful everytime I receive an email from a coworker filled with mispellings, poor grammar, and worst of all, terrible logic….
Usefulness is a subjective viewpoint, sometimes.
Putting myself through school (including paying rent 12 months a year, not
was my financial bootcamp and I knew at an early age how much a box of tide was. That’s what I want to pass on to my son, that you should do what you love and the money will come, but you have to learn how to live with what you have until that day the money comes in — just in case it takes a couple decades.
August 4, 2009 at 2:59 pm
Geoff- LOL..so very true.. I’ll never regret getting my degree- for me the regret is in the lack of forethought that went into choosing a major- shockingly my life goals at 18 when I entered univ are decidely different than they are now..:)
August 4, 2009 at 3:04 pm
But Amy, doesn’t that just mean that taking a liberal arts degree at a young age makes the most sense, since it’s the most flexible? Versus something like a Kinesieology degree, which seems quite specific to certain professions…. debate for another day. At the end of the day, in my opinion, any education is good. Even if you have to go into debt for it, which I know Gail would disagree with but hey, she’s on holiday. At least with an education, “they” can’t take it away from you. Your house, your car, your PS3, that “they” can take away…. your degree can’t be foreclosed on at least!
August 4, 2009 at 4:27 pm
Geoff- fair enough..that’s essentially why I don’t regret my education – i have it and it’s mine.. and if I ever stumble upon something I want to go back to school for I’m not starting at square one.. but for the amount of debt I racked up I didn’t get the return on my investment I could have if I had choosen something like business or a bcomm..which fast forward 15 years is a better fit for me than my poli sci .. I just think parents need to help their kids look at how they see their lives in 5 ,10 yrs and show them realistically what they need to do to get there.. so that the credit demon isn’t so tempting when reality hit’s them full force in the face and they realize their choosen degree may not afford you the lifestyle you always dreamed of.. it’s a matter of helping our kids understand that choosing one particular path might mean life X won’t be a reality.. or not right away at least.
August 4, 2009 at 5:03 pm
You have a point there Amy. My parents inadvertantly did me a favour — they didn’t pay for my education but made too much for me to qualify for government student loans… so off to work I went. Graduated with something like $2,000 in debt, I was pretty proud of myself. But that was 10 years ago and may not be possible nowadays when you have graduates competing against students for jobs.
August 4, 2009 at 5:46 pm
Geoff- pat on the back!! that is awesome that you got a degree and paid for it all as you went..
That brings up an interesting dilemna for me.. I am currently saving in RESP’s for my son’s and they will each have about 1/2 of what they say they will need to complete 4 years of Univ… my husband and I certainly can afford to put more away for their education but I question the value in handing them the education.. will they truly appreciate the gift they were given or will they take it for granted .. but on the flipside having personally had a whopping student loan debt, I don’t want my kids to get out of school owing money before they even start in the workforce..
What does everyone do or think?
I went to school with alot of people who were there on their parents dime and enjoying more of the “extracurricular” activities than the schooling- and just as many who were on student loan who had to pick up a part time job because they blew all their loan money in sept and had nothing to live on…
Curious to hear what other people’s thoughts are on that…
August 4, 2009 at 8:08 pm
Amy, we have a young teen who is starting college this Sept. We had an RESP for a long time, which had become a tidy little sum for him to pay for all his 2 years of college tuition and other costs and if he wishes to continue on to Uni, it will cover that too.
Even though we have an open discussion about money, and had our son pay bills every now and then to let him see how quickly money can come in and goes out, it was actually, when he started enrolling into college and meeting other students, teachers and people who would discuss how they were going to pay for their tuition costs, did it really sink in for him, as to how lucky he was to have an RESP that would pay for all his college costs.
The first time he realized this, he came to us very thankful and all – and we told him, that, first yes, the money was for him, but if he does not produce the grades required, that RESP will be very easily rolled into our RRSPs and secondly, this was our gift to him to start his financial life on a good footing. He is very grateful, because some of his friends are now holding down jobs and will be going to college with him and they repeatedly tell him how lucky he is to have an RESP.
We have no regrets about investing in the RESP – it helps us and our son, not worry about where the next tuition fee or books and stationary expenses are going to come from. I highly recommend it and then again, like I said before, it has conditions attached, the kid does not preform, the money goes into our investments and he understands that very clearly.
I hope this helps Amy. Thanks.
August 4, 2009 at 8:13 pm
Amy, just one more thing, once you take the money out of the RESP, taxes are paid on the portion that the govt’ has put in – but after that, you can do what you please with the money, (is my understanding from our financial adviser), you can buy a car, you can pay rent, you can put the money down on a mortgage, etc. No receipts are required by the govt’ to make sure you are using it for the college expenses. However, you need proof of your child’s enrollment in college or uni to withdraw the funds from the RESP. Hope this helps, thanks.
August 5, 2009 at 12:00 am
NKM- I love that idea of having the strings attached to the $$.. set out the threshold before he/she evens heads off to school and the money will be there as long as the grades are above that..
totally teaches them some accountability and hopefully helps them appreciate the start we are giving him..
thanks for the feedback!
August 5, 2009 at 8:04 am
Great topic guys….I have two kids one who graduated 2 years ago and is doing great and one who is just entering college…I made it very clear that they needed to go to post secondary and that they would be expected to work for it. They both started working at age 15, they bought thier own clothes, paid for their own entertainment and saved for thier tuition. When our oldest entered post sec. we told her we would pay half the costs, she was shocked and said “but you made me save enough to pay for all 3 years of my program, why if you were going to pay half?”…she gets it now…she had enough to go to school and still have a life, she graduated with several thousand in the bank, people she works with in thier mid thirties are still paying thier student loans.We did the same for our son, a month ago he handed me the entire tuition money for his three year program (he wanted me to hold it so he wouldnt blow it on partying)…I believe that education is a huge privelege and that working to pay for it is an education in itself….sure they had to work at parttime jobs all through high school and they both worked full time each summer…they might have missed out on a party along the way but they met a lot of people , networked and graduated not only with the skills from school but lots of work experience on thier resume. I hate hearing of young ones starting out with huge debt loads, it is so unfair that our govt. wants skilled workers but makes students pay through the nose for it …post secondary costs are out of control
August 5, 2009 at 9:11 am
Kim, that is a great idea too!
I absolutely agree with you, how are these young people suppose to get on with life when huge student debt loads are hanging above their heads, and once they graduate and find jobs, most of their incomes are going towards paying off these loans. It is ridiculous and I think the govt’ should be stepping in to give them a break if it still wants skilled workers, educated in Canada, to be a part of our workforce.
I must add that even though we have the RESP for our son, he still has a part time job that pays for his personal expenses – it is just that he does not have to work long hours to pay for college expenses. He mostly works weekends and one evening shift in the week. This, we believe, will give him enough space and time to concentrate on his studying as well as give him the work experience he needs.
Thanks everyone.
August 5, 2009 at 9:17 am
Kim — our post secondary tuition costs are actually quite reasonable, when you consider that an education at a private university such as Harvard will easily cost $30,000 a year. However, they are still quite a lot. It’s a tricky thing, trying to balance how much to subsidize.
Amy – What I think is the difference between ‘then’ and ‘now’ is that back when I was in school (mid 1990s) it was still possible to earn enough through summer and part-time work to pay tuition, and live, etc. I have a son and we have an RESP setup for him and I think its important that he understand that it is contingent on performance.
That said, university is NOT all about grades — it’s about making connections, friends, experiences, getting drunk, girls (boys), having fun, blowing off class for a movie, falling in love, etc. The key thing for me is balance. I don’t want my son to bring home straight C’s, but I’d rather a strong B+ average with an active social life, than a straight A’s no-life kinda kid. You’re only young once, and I had a lot of fun at university and want my son to enjoy himself. The most boring kids I knew in high school or university were the ones who only wanted good grades and were afraid to have fun or let loose a little and do something that scared them. Because, truthfully, unless you’re planning on going to Law/Graduate school, it doesn’t really matter to many employers if you have an A or B average (it might to some, but I’ve been working for 20 years now and I have never had to produce an actual transcript, just a photocopy of the degree). But I’m not going to tell my son that until after he graduates….
August 5, 2009 at 10:26 am
Geoff,
Nice to see some parents are realistic regarding their children’s education. Many faculties are looking at life experience and not just grades.
I do wish they would teach spelling and grammar (and perhaps even diction!) to young people. The electronic age has done nothing for basic communication skills.
August 5, 2009 at 10:39 am
Geoff…I think affordability is a matter of perspective…unfortunately the most rapidly growing economic class in North America is the working poor…for these people even the costs of community college can seem hopelessly out of reach. The costs of education/living have escalated more rapidly than the increase in wages,a trend I think will continue in the future. A bottle of Bollinger champagne is reasonable at $130 when compared to a $250 of Dom Perignon…doesn’t mean I can afford to drink either of them,lol.
August 5, 2009 at 11:04 am
Kim,
Vueve Clicquot is only $65 in BC, less in Alberta.
Drink up!!!
August 5, 2009 at 11:08 am
I was a straight “A”s no-kinda-life student. I was paying my own way and money was WAY too tight to party! I was paying to be there and made every minute count as education. I already had good friends why get plastered with strangers? Affordability was a big concern, the choice between beer and hydro was genuine! A no-brainer!
As for lessons I’d wish I learned younger…. financially I think I paid well enough attention to not get in any serious trouble as a youngster. I hope I can press home the important golden rules to my children YOUNG so that they are second nature by the time they are on their own.
Know where your money is going!
Don’t spend more than you make!
Save for emergencies!
Pay yourself first!
A plan is a smart thing to have for budget and for goals.
Leave money in the budget for something you enjoy so you don’t feel deprived.
Compound interest is magic that can be used FOR or AGAINST you!
August 5, 2009 at 11:39 am
Great rules Pol…simple and they work. I think a lot of people think financial planning is so complex they don’t even try…really if they live by your golden rules they would be doing well.
August 5, 2009 at 12:02 pm
Diana – years ago I read an article that said the letter “E” will never forgive the 20th century. (Think e-business, e-mail, e-marketing, e-commerce, etc). Made me chuckle.
August 5, 2009 at 12:34 pm
Geoff – poor “E”…..now blamed for the downfall of civilized society. ha.
Pol- please say you had some fun. You seem very serious. Life cannot be all hairshirts. A bit of joy and spontaneity can fit in, too.
August 5, 2009 at 9:19 pm
the only thing i ever knew about our families household $$$ is that it didn’t grow on trees. this i was reminded of frequently. to this day, i have no idea how much anything there cost, i figured it out hard myself when i moved out cuz money was never openly talked about. my parents were never reckless and they were good with their $$$ but unless you see the inner workings of that, you learn nothing.
my hubby and i vowed that money will never grow on trees (or shrubs, flowers etc.) in our house, and once our daughter can count past at least ten, she will be learning about how we run our house, pay stubs, bills and all.
August 6, 2009 at 11:42 am
So guys, can I highjack this a little to do some market research? I am currently completing my Certified Financial Planner certificate, and although it seems like the majority of CFPs going on to do investment advising, my vision for it was to do basic budgeting and money management advising. I’d love to do a course for students about real-world costs and money management planning. If I went this direction, do you think I could get paying clients? Or would people look for this service for free, and I would have to go the investment-planning route to make my money by selling people the investments that will pay me commission? It seems like a lot of people aren’t learning this at home and don’t really know where to turn besides Gail (although she is incredibly fabulous, there’s only one of her!) and if they go to a financial planner, they probably feel pressured to buy investments so that the financial planner can earn a living.
August 7, 2009 at 9:18 am
Sandy — I think one of the paradigms that this post ignores is that though most of us “wish” we had known more when we were younger / students, the simple truth is this is information that was fairly available, we just didn’t avail ourselves of it — because we’re students. It’s hard when you’re young to think more than 10 minutes ahead, not because it’s particularly difficult but because you’re young and there’s a million other things to do. So the biggest challenge is going to be getting students to actually care about this sort of thing, when they don’t really need to. For instance, it took me years and years of paying taxes before I leanred how to maximize deductions — and I’m still learning! I’d never have even cared about it in high school.
August 7, 2009 at 11:24 am
Hmmmm, this is so interesting. I thought I was the only one that grew up without any money sense. My parents only advice regarding money was “you have to work to get what you want”. Going to college or University was never an option. I left home at 18 and have struggled with money for the last 30 some years and have carried some sort of debt. I have read and read about money including Gail’s information and watched her show. My problem now is I get really excited about money and debt and tell myself I am going to change and when I don’t see instant results I give up and go back to my old ways. My husband and I are not that far from retirement, we have so much debt that I’m not sure we will ever be able to retire. I will never give up believing that I can do this and everytime I take a step back I take two steps forward. Thanks Gail for never giving up on me.
August 7, 2009 at 1:30 pm
Terry, if you start the jar system you WILL see instant results in that you will have money left in the bank to pay bills or save. (and even sometimes $$ left over in the jars) You will find you can truly live on less money. Obviously your debt won’t be instantly gone, but small amounts applied religiously help a lot.
And of course, you have to get rid of the credit cards and debit cards.
The sooner you start the jars, the sooner you will be out of debt!!
Yippee!!
August 7, 2009 at 2:24 pm
So JD didn’t know about saving and not going into debt…was he living in a cave, or perhaps is he right out of the Middle Ages?
There are no excuses nowadays for being financially illiterate.
My grandparents, both born in the late 1800’s knew about saving and not going into debt, and that, with no television, radio or internet, financial advisor and with a grade 4 school education.
My mother-in-law who’s 84 knew about saving, growing up in war-torn Europe, having had barely enough to eat.
If these very ordinary people from another era knew you should save and not spend what you don’t have, then what is the problem today?
I think people know what to do. They just don’t do it. Keeping up with the Joneses is more important to them than acquiring wealth.
August 7, 2009 at 2:37 pm
Hey Arma, easy there; this is a friendly blog we’re trying to help each other. Not everyone gets into debt due to jones envy. Your Grandparents probably also didn’t have to deal with 6 figure debts from university because a high school diploma means nothing now, house prices that are 3x household income (let alone 5 in GTA), daycare that costs $1200 / month PER child, surviving on two incomes because the days of a one-income family are, for the majority, over, etc, the concept of GM going bankrupt, etc. And your grandparents were well into their 30s before they paid a single dollar in income tax too, which would make abig difference to the average person nowadays too. Circumstances are different now than they were, and they will be different for my son too, just need some understanding sometimes.
August 7, 2009 at 2:52 pm
Geof, easy to you too…perhaps they didn’t have to deal with daycare costs/students loans, but no student loan means a low paying job…no daycare costs means the woman doesn’t have a paying job, plus they did have to survive in a time where there were no social programs at all…ever heard of medicare?
GM going bankrupt? What about all the companies than went bankrupt from 1929 up until WW2? My grandfather was a civil servant and was lucky to keep his job, up to 1942, when he was laid off because of corruption.
Fortunately he got re-hired following a change of government. Circumstances were no better in the ‘good old days’.
I just visited this blog. you’re right, it is truly interesting.
I stand by my assertion that although there might be a few exceptions, people go into debt to keep up with the Joneses.
August 7, 2009 at 3:06 pm
Arma — my point is simply that there are lots of causes for debt, not just simple greed. You and I may disagree on that point, which is fine. But I’m just saying what you’re saying — that different times have different experiences, and completing that point by saying that what’s true for one may not be true for another generation. There would be plenty of people in your grandparent’s generation that made financially poor choices as well.
August 7, 2009 at 3:17 pm
What was true for their generation was true to the generation before them, is true for this generation and will always be true: don’t spend more than what you make, or better yet, spend less than what you make.
Simple. Of course there were people in my grandparents’ generation that made poor choices. Some people are always going to make bad choices.
It isn’t a question of knowing. They know, but they don’t do it. They know, but they choose to ignore it. They are driven by greed.
http://www.bewilderingstories.com/issue209/cigale.html
August 7, 2009 at 3:31 pm
Sandy – I was just asking my financial adviser to give a basic lecture one evening at the college for students for free, just to get them thinking about their money and take a couple of questions to see what the students are facing and what their issues are. Or even at your church or some other venue, post fliers to get your info out, and see what happens. We’re so blessed to have an excellent adviser who has been with us for so looong and so far, all has been fantastic.
Then at the end of the lecture to hand out your information and what your charges are to have one-on-one time with you. I think it is a great idea, because not only is it the daily management of money, but students can start thinking about long term goals as well.
Let’s face it, if parents are not good with money, how can they help their kids with their money?
I think it is a great idea, and you will be able to gauge by the number of students that come to your free lecture, as to whether this line that you are thinking of pursuing, will work or not.
Times have changed, people – young and old – are seriously thinking about their money in all ways, how to make it, how to save it, how to get the best bang for their buck, etc.
Let’s face it, our parents and grandparents generation was good with their money, but poor teachers to their children about money management, our generation {not everyone, I know! I know!} basically put the economy in the toilet and have left the younger generation frightened and feeling hopeless and helpless.
I like your idea, Sandy. Hope this helps. Thanks.
August 7, 2009 at 4:00 pm
Diana, thank for your response. We have started the jars and you are absolutely right about having more money in the bank to apply to debt. My husband and I take full responsibility for our debt and although neither of us had any great teachings about money when were young we know it is up to us to make a difference. We are working on it, never too late to learn another life lesson.
August 7, 2009 at 5:33 pm
Arma_Geddon, I think Geoff is just trying to say not to judge, either way.
No judging on why people are in debt, no judging on what people spend their money on…we’re all on this site to save money, whatever the reason: to pay off debt or just to make life more carefree.
And we can’t generalize one generation to another.
At work I see lots of older patients who are poor. Some just because of bad luck, some from bad choices….no different than the younger generation.
Good luck to you Terry. I was sure surprised to learn how little I could live on and have become surprisingly thrifty (relatively, anyway…my mother still thinks I spend too much, ha ha…there’s the difference in generations again!!)
August 7, 2009 at 10:22 pm
Welcome Terry!
This is a _usually_ a great place to learn! We all had to start somewhere. No shame in not knowing, but a little shame in doing nothing about it (ok, that is a judgmental statement). The plan works but you HAVE TO SET REASONABLE GOALS. For some people it would be to accummulate ZERO debt for two months in a row. If that goal is met, CELEBRATE! Remember to set small short term goals and longer term ones. What may seem like a small challenge to ones are HUGE for others. You have to be ok with your goals, no one else has.
I am sure there were times when I thought I knew enough (seemed like a lot at the time), yet I am not done learning!
NO BASHING ON PEOPLE ADMITTING TO LEARN, I am sure that Gail would not approve!
August 8, 2009 at 4:30 pm
My parents were military(flying officer and chef wwII) so you know what that meant to be brought up by them.
Besides cooking regime, laundy,housekeeping and sewing…
I was required to save 50% of my earnings or allowance.
Its made me cheap thou and always watching my dollars
I have a lot for what I have spent.