Teach Your Children - Colleen

Stories abound these days of people who are drowning in credit card debt and who are now paying the price for living beyond their means. When I read these stories, I feel grateful for my dad. Had these unfortunate people been raised by my dad, they would probably not be in such a predicament.

My dad taught me and my sisters from an early age what money is, its value, and how to manage it. Here are some of his main lessons:

Money is for many things, not just for spending

When I first received an allowance at about the age of seven, my dad gave me three empty jars, each with a label on it. One jar was labeled “spending,” another “savings,” and the third “church.” We were to allocate our allowance among these three jars in any way we wished. With these three jars at hand, it never occurred to me to put all of my allowance in the “spending” jar. Instead, I put a dime of my 25-cent allowance into the “spending” jar, another dime in the “savings” jar, and a nickel in the “church” jar for my offering the following Sunday. My dad taught us that money is not just for spending; it is for saving and sharing as well.

Keep track of your cash flow

A few years later, my dad came home with gifts for me and my sister. We each received a book, bound in faux-leather, with the word “cash” embossed in gold on the cover. The pages were filled with columns. My dad showed us how to record our “income” in one column and our “expenses” in another. He told us “income” is the money we receive, like our allowance or gifts from Popo and Gung Gung (my grandmother and grandfather) or money we earn from doing extra chores. “Expenses” are when we spend our money, and it is important to keep track of how much is spent and what it is spent on. He taught us to subtract the “expense” column from the “income” column so we would always know how much money we had. From my first entry in that cash book of 10 cents for a bag of chips to my current use of the slightly more sophisticated Quicken software, I have kept a watchful eye on my cash flow.

You can’t have everything you want, so make wise choices.

In high school, my sisters and I were given a budget at the beginning of each year for our school clothes. We had $300 to spend in any way we wanted. But my dad warned, once the money was gone, that was it. We were not to come crying to him for more money. I didn’t dare test this boundary. I was convinced that if I had blown that $300 on a few pairs of shoes and a handbag, there was no telling what humiliation I would have had to face -- indignities such as having to squeeze into last year’s clothes, or to wear my older sister’s hand-me-downs, or even to be seen in public only half dressed! Both of my sisters and I learned to sew because it was much cheaper to make clothes rather than to buy them in those days. I scored a small victory when one of the cool girls at school complimented me on the dress I was wearing and asked me where I had gotten it. I nearly burst that dress with pride when I told her that I had made it myself! My dad taught us that you can’t have everything you want. You have to make choices, and you had better choose wisely because once the money is gone, it’s gone.

These lessons were not easy for me to learn as a kid. I may have resented the restrictions and the discipline at the time. I would have liked to have had more stuff, the latest stuff, the best stuff. But any “pain” I felt back then would have been eclipsed by the pain of learning these lessons the hard way, and as an adult. Just recently, I told my dad how much I appreciated what he had taught me.

I urge you parents to teach your kids how to value and manage their money. They may not like it now, but you will be giving them a gift far more valuable than the latest videogame or designer clothes. You will be giving them the tools to lead a life of Financial Integrity.