How to raise your kids to be thrifty

Hi. I wasn't quite sure how to title this thread. Here's my situation. I wouldn't classify my family as "poor" when we were growing up, but we weren't as well off as many. I've gone to college, and gotten a pretty good job. I'm in my mid 30s, and since I started working, I've saved a good portion of my earnings. I have no debt. I'm certainly not able to retire today, but I feel pretty comfortable with what I have, and feel that I can "ease back" on my savings rate to "only" 25% or so of my income and be on track for retirement. I'm relaxing a bit on my thriftiness. I'm not going out and buying a Mercedes or designer clothes, but I now have a new minivan (safety and reliability), buy new clothes rather than from a thrift shop, and buy whatever toothpaste I think I want the most, rather than reading labels to see how many grams are in each one and trying to save ten cents a tube. If I'm hungry or thirsty and forgot to bring food, I'll buy a drink or a snack rather than wait until I get home.

I know that isn't the picture of a spendthrift person, but I'm afraid that somehow being not so concerned about money will send the wrong message to my kids, and they don't have the benefit of seeing the discipline and investment that I put in during my younger years. Does this make sense? Anyone have any comments or advice?

Thanks

What age kids are you talking about?

One of the best ways to teach children thrift is to give them only enough allowance to purchase one very small thing per payday -- in my case, it was a candy bar. Yep, my Dad was "thrifty" (cheap is more like it), but having such a tiny allowance taught us that if you save, you get to buy more candy, or a soda and candy at the next movie you go to. I can't understand parents today who give kids such large allowances that there is a lot more choice, and little need to save.

If you prefer to give a large allowance, you can make the child pay for clothes or other necessaries out of it. My neighbor does this -- their daughter gets $10/wk, but out of that she has to pay/save for her own clothes and gas for the car when she wants to run around with friends. It has made her not only thrifty, but inventive -- she once got two pairs of jeans and a "Bedazzler" at a thrift store, and walked into school a few days later with "fashion" jeans she had made herself. She is now saving for a sewing machine, because she learned how to make blouses from her grandmother. This is a family where the mom is handicapped, and the dad works blue collar jobs between layoffs and unemployment. It doesn't matter what the financial capability of the family is -- it's about making the child responsible for some financial decisions, especially the ones that concern them. When you say, "We can't afford that", you imply that YOU (your wage earning capacity) are the problem -- but when you say, "have you saved for that?" you make it their problem.

I, too, grew up poor, but we kids never really felt it. Our parents included us in enough financial decisions that we learned the limitations of a family's income. And even though my Dad's allowance was ridiculous for my age, I still made choices because of it -- for example, school lunch was a dollar, so I just pocketed the dollar, and by Friday I had enough for a meal with my friends at McDonalds. Missing a lunch didn't hurt me any (graduated 4th in my class...but wait, maybe a nice hot lunch would have made me valedictorian!). It also pushed me into getting a job as quickly as I could, where I learned about those fun things like taxes and the price of gas.

I have to tell you about my cousin, too. He got a decent enough allowance ($5 a week, I think, in the 90s), and his parents included him in every financial decision -- he knew their incomes, taxes, and investments, the whole shebang. So, he never asked for ridiculous things that were beyond their incomes. What he DID do, however, was save for fun and splurges. If he wanted to go to a movie, he would treat his parents. When they saved for a vacation with a rental car, he would pay for an upgrade, or for a meal out. He was always so proud, at 9, or 11, or 12, to say to the waitress, "I'll take the check". When he saved for his first car, his parents offered a match. He bought his first house with 40% down at age 25. He turns 30 next year -- I can't wait to see what he'll do next!

I live in a rural county, where education isn't valued, and where the per capita income is half the state's average (a little less, I think, at $21k). Yet the kids around here are indulged with Xbox systems and such. The landlords I am friends with say the months when people are usually likely to skip paying the rent are December and January, when these poor parents, apparently fearful of disappointing children with their poverty, sacrifice essentials for foolishness. If they included their children in decision-making, if they were parents instead of gift-delivery people, their children might grow up to make better decisions themselves.

It's not always about income -- it's about the kind of parent you want to be, and what you want to teach. So what if you don't compare toothpastes anymore -- but do you compare the purchase of a new car, the decision to take a vacation, what toys to buy for your children, what shoes to buy? There are plenty of opportunities to demonstrate the values you want to instill, without being a Puritan about every single purchase.

Thanks for the reply. My kids are 2.3 and 0.9 years old (I hate using months for age, and I'm a science nerd). They're really not being influenced yet (I don't think), but I have time off, and this is where my mind wandered to think ahead. That, and I see all the teenage girls at the mall carrying coach bags and wearing designer clothes carrying ipods. Some of them are working at the mall, and I have a hard time believing that they're taking their part time minimum wage income and blowing a week's worth of work on a purse. Maybe I was completely oblivious when I was in high school, but I don't remember all the name brands and status symbols being an issue. Anyway, I digress. I just think that the consumerism is at a different level now than when I was a kid, and I hope I can encourage my kids to be above that - at least to some extent.

PS I did the same as you - skipped buying lunches to save for other stuff.

I'll admit that consumerism seems way out of hand. I was a teenager in the 80s, and you betcha that brand names mattered! Jordache jeans, etc. But if I recall, Jordache jeans cost only twice as much as the JC Penney store brand that I bought -- whereas a Coach purse costs about ten times as much as what a JC Penney purse would cost! That's where I'm saying it's out of hand. I'm all for being proud of your brand if that's your thing, but when the brand is so patently out of the reach of an ordinary family, it should be set aside. I see no reason why middle class teens should be wearing Prada or Coach, unless a rich relative gave it to them. (Not to mention -- those Coach bags are uuuuu-gly!).

That's my thing with the Xbox and the Wii, and even the Nintendo DS. Those game systems run $300 or more (apparently the Wii is so popular this year that you can barely find it in stores for its base price of $250, but can bid on eBay for the same unit for $350). Especially for poor people, why on earth would you get a $300 game system for a kid, when $300 buys a lot of groceries, or goes a long way toward rent, or can pay the utilities, the phone, and the gas bill? Not to mention that the games themselves are so expensive, that you're constantly feeding the costly thing $40 and $50 at a time. Plus, they rot your brains! (HA HA! -- that must be the modern day equivalent of "you'll shoot your eye out, kid").

But anyway, rant over. You have to make it a priority in your lives that your family won't be ruled by symbols. Now, if you're out there polishing the sleek cat on your Jaguar every Saturday night, you're not going to get your point across. When we were young, we made a game out of "but it looks just like...." -- for example, Jordache jeans didn't look any different from Hunt Club (JCP brand), and they were cheaper -- we took pride from paying less money for the same jeans as those idiot Jordache wearers.

I think young people today have it harder in some ways. I don't remember, for example, in the 80s, movie and rock stars having their own lines of products to sell, with rare exceptions (Elizabeth Taylor's perfume, for example). The other day, I saw Paula Abdul hawking a line of jewelry on TV. Now, what on earth qualifies Paula Abdul to make and sell jewelry? -- or Jessica Simpson and Paris Hilton to brand their names on perfume? What experience or education qualifies them to do such? It seems nowadays, you haven't arrived as a star, unless you can "brand yourself" with products. And the kids see this -- they love Hannah Montana, so they want HM clothes, and jewelry, and hair accessories, in addition to HM music and Barbie dolls. Very sad.

My daughter just turned four. Although we are a "slightly above average" income household for my area, you would think we were Rockefellers by the amount of toys and other junk she has. FAO Schwartz would have blinked at the amount of toys she had, even before her last birthday and Christmas!

Anyway, to keep things simple, I am cheap and Mrs. Dingobiscuit isn't. I manage my daughter's piggy bank (give her all my pennies and nickels - I keep my dimes and quarters, I roll her change, keep some of her gift money from Mrs. D. :p ). We count and roll the money together and I tell her the denominations, etc. She gets into it.

I try to give her lessons in money. When we go to the store, I might make her pay 50% on an item that she wants (within reason), and only if she has been well-behaved. On Christmas Eve day, we went through 12 of the 20 boxes of toys she had in the garage (I wasn't kidding about her collection) and filled five kitchen garbage bags full of toys she didn't want anymore and gave them to needy families. I told her that I was proud of her, and she was proud of herself.

It backfires sometimes. I offered her a buck the other day to try something new at a restaurant. She told me, "No thanks. I have my own money."

Anyway, I don't want her to be like her siblings and Mrs. D. "Late Payment? Balance what? NSFs again?!?!?" Those never cease to drive me crazy. :mad:

I haven't started allowances yet, but I think she might become a diligent worker, if the price is right.

Hopefully nurture will beat out nature in this case.

Kids' spending habits are a funny thing. Although we raised them the same way, money-wise, our older kids are quite different:

My step-son (21) was recently active duty for two, 1-year stints. He had few bills and little expense, being active duty. He came back from both tours...in debt! He even had over $5k in travel reimbursement this October, which he blew on smokes, alcohol, and exotic dances. Now, he is broke, penniless (negative, actually), unemployed and has a broke-down vehicle. He didn't even buy Christmas gifts.

On the other hand, my step-daughter (19) had a unexpected settlement check earlier in the year. Although she is a spender by nature, she put a majority of the check towards the balance of her new car. She often paid me in advance for her auto insurance. She moved out of the house and is paying for her college education and housing. She was able to scrape together enough money to buy the little nieces, nephews and my youngest daughter Christmas gifts. Although not thrifty, you can see the difference between her habits and her brother's.

Maturity has a lot to do with spending habits, but I would say a lot of one's financial mind-set has to actually do with one's personality.