How to Teach Your Kids About Money When You Are a Financial Disaster Yourself
In general, we want our kids to be better people than we are. We insist they eat their vegetables and then break out the Cap’n Crunch after they go to bed. We teach them to floss as we run a tongue over our many fillings. We counsel “forgive and forget,” even as we ruminate on the splotchy-faced woman who wouldn’t let us into traffic as we were pulling out of an auto dealership in Hagerstown, Maryland in 1997.
Yes, in short, we hope our kids are better, more generous, more on-the-ball people than we are, and especially that they won’t be fuck-ups in the ways we are, and in this case I’m talking specifically about people who have just never…gotten it together financially. People like me.
I grew up in West Virginia in a financially chaotic household. My mother was an artist, so resources were feast or famine, and while we weren’t (usually) poor, I developed the typical poor-person habit of immediately spending whatever money I had on something comforting, because no matter what, that cash would soon be gone. If money always evaporates tomorrow, you might as well enjoy the drinks/cigarettes/new dress/vacation today.
Now obviously this is a self-fulfilling prophecy that has developed into a vicious cycle, a cycle that has made me feel like a failure and a loser pretty much every day of my adult life. Then I moved from West Virginia to New York City, a move that induced cultural whiplash and made me question what’s financially “normal.” My grandmother bringing her own Scotch in a jelly jar to restaurants to keep the tab down? Turns out, not normal.
But having kids makes you not want to be a failure and a loser anymore and, like a lot of people who’ve grown up in eccentric circumstances (I once lived with my parents in a post office, but that’s a story for another day) I think every day about creating the normalest possible environment for my kids. We eat dinner at the same time every night. I set limits with screen time. I put on shoes to pick them up at school.
But I haven’t been able to crack the finance problem. Our credit card bills are like a monthly punch in the stomach, and the thought of our retirement and college savings makes my heart race. Even the most minor of money discussions (whether to replace a ratty rug, for example) brings a wave of shame and recrimination that makes rational decision-making impossible, and to comfort myself…I buy things. Our financial problems came to a head last year when our child-care costs unexpectedly went up, and I enrolled in graduate school. Our monthly expenses caused me heart palpitations.
I have seen friends, upon having kids, clean up their acts—get steady jobs, deal with eating disorders and drinking problems, in general press play on “adulting”—and I wanted to join them. But every time I tried to get my act together—to make a budget and stick to it, or to research where we needed to be in our retirement savings (another blow: our IRAs are apparently right on track for for a nine-year-old who wants to retire in 120 years) I was so baffled that I gave up. And bought something.
A couple of years ago, when my older son was four, Ron Lieber, a columnist for the New York Times, wrote a book called The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money. I knew I should start giving my son an allowance, and I wanted to start instilling good money sense. But it was a classic case of the blind leading the blind, except one of the blind also had a habit of overspending, weeping, and flying into fits of rage. And it wasn’t the kid.
Lieber offers bold suggestions for teaching kids about money, beginning with three “allowance jars”—one for spending, one for saving, and one for giving. By the time the child is in middle school, he advocates turning the entire yearly clothing budget over him or her, to allocate as he or she sees fit.
Now this may or may not work for you, but it was beside the point for me: I didn’t even know what we spent annually on kids’ clothes. Lieber’s suggestions are predicated on the idea that parents know what they’re spending, and the idea that I should know—and didn’t—seemed like a major parenting dereliction of duty. Cue more shame, and I avoided the subject for another full year, until the child-care/grad-school problem forced my hand.
For me, the major shift in my thinking came with something pretty simple: I re-phrased my annual New Year’s resolution. Every January I make the same resolution: I will sort out the budget. And every year, faced with overspending or accounts that won’t reconcile, I give up by February. But this year, I changed my resolution to “For an hour a week, I will live with the feelings of shame and recrimination that come with learning about budgeting.”
I chose the online budget program You Need a Budget, or YNAB, because it seemed like the most intuitive: Unlike other budget programs, in which you hazard a guess at what you spend each month, in advance, and then find out a month later that you were comically wrong, YNAB allows you to budget only money you have right now, in your checking account. (It’s an electronic version of the pre-digital-age “envelope” system in which you put your money in envelopes marked “rent,” “groceries,” etc., and when it was gone, it was gone.)
You can move money from category to category (or envelope to envelope) to cover overspending, so if your medical expenses are over-budget one month, you take some money from the “entertainment” category, and move it to “medical,” and skip the Dave Matthews tickets. (Or whatever.)
Now this was not an immediate, perfect solution. YNAB is pretty intuitive but not totally intuitive, and one has to be able to tolerate a learning curve—and that’s where my weekly hour of pain comes in.
The site offers video tutorials and live webinars, help documents, and support via email. There’s a YNAB subreddit that’s very helpful for crowd-sourced answers. For those of us who have emotional blocks around money, learning to tolerate the learning stage is the most challenging part—to not throw in the towel as soon as I couldn’t grasp how to handle accounting for cash or couldn’t make an account reconcile properly. In fact, every time something didn’t work, tears would come to my eyes again because I felt so stupid and helpless.
But slowly, things are changing. I sit at my desk for an hour a week and refuse to click away from the site for 60 minutes (I set a timer). I watch a video or ask the help desk for support. I took on some extra work to cover January’s binge-spending on disaster preparedness. I’m four months in, and I’ve heard that it takes six months for the program to become an easy two-minutes-a-day, do-it-with-your-eyes-closed system. (Naturally, you need to allow more time for discussions about prioritizing and setting goals with your partner, if you have one. The program is agnostic about how you spend your money: It won’t tell you to quit it with the takeout and beer; there is no pop-up that says “that’s a lot of money for a synthetic blend,” or “are the Braves really worth that MLB.com subscription?” Like a good teacher, it presents the information and lets you draw your own conclusions.)
My husband and I did have to cut some luxuries, but we comfort ourselves that we can add them back when we’re past this crippling child-care/ grad-school stage. I’ve learned how to make the accounts (usually) reconcile, and when they don’t, I can now hunt for the mistake clear-eyed rather than through a blur of tears. We are setting savings goals for big-ticket items we want, rather than our old “system” of just putting something on a credit card and then, rather than enjoying the new amplifier or baseball tickets, feeling a prickle of anxiety every time we thought of it.
“Budgeting” has kind of a depressing ring to it, a sense of deprivation. But nothing is as depressing as feeling out of control and ashamed, and like, as my husband said, a giant boulder is bearing down upon you. Everyone lives with limits, even very wealthy people. (In fact, as I started talking to people, some quite affluent, about their budgeting systems, a lot of weird shit came out: credit-card debt kept secret from spouses, compulsive overspending or lunatic frugality, a husband who will blow the bank on restaurant meals but last purchased underwear before there was an Internet. A lot of people will die on the hill of sponge versus paper towel for countertops. Everyone is weird about money. A lot of people are ashamed. The Opposite of Spoiled has three entries in the index for “shame.”)
Of course I wish we had more—everyone wishes they had more. And I live in New York City, a place that reminds me daily of all the real estate I didn’t buy 20 years ago.
I’ve become rather evangelical about YNAB. I’ve changed my grocery-shopping habits since beginning the program, but I still have to walk past my local fancy food store every day, and I’m always tempted by their artisanal Ho-Hos and cleaning products that make dryer lint smell like the dewy neck of a baby du Pont. I was peering in the window when I spotted a friend, also originally from Appalachia, lining up to buy something like a single potato chip in a mason jar wrapped in dune grass.
“So pretty,” he said helplessly, about to drop $8 on eight calories, so I slapped it out of his hands and told him to eat mayonnaise sandwiches until he regained his financial composure. “You need a budget,” I said. My husband, reading a New Yorker story about a rock star’s profligate spending, threw the magazine down in disgust and said, with the zeal of the converted, “Jack White needs a budget.”
I think (I think! It’s been only four months) I have a better handle on how to manage my kids’ financial education. My son gets $6 every Sunday, which he divides into a spend jar, save jar, and give jar. So far he grasps the deal pretty well, doesn’t spend his spend jar the minute he gets it, and shows no signs of shame or recrimination. Curiously, though, he does exhibit regret—he saved five weeks for a $10 Batman flashlight, played with it for an hour, and then confided that he wished he’d gotten something else. I confided I wished I had bought Netflix shares in 2002. But regret is productive for learning; spiraling, free-floating shame is not. This winter I will turn over his entire Christmas gift budget to him and let him allocate it as he sees fit. (Stay tuned for an enraged post about how Hero Daddy got a new Martin D-18 guitar and Lunch Lady Mommy got a leftover handprint turkey.)
My son and I set a savings goal for an overnight stay at the American Museum of Natural History for next spring; he has to contribute $10 and I will save the rest. This year, for the first time in my life, I think I can do it.
April 25, 2017