Mother Knows Best: 5 Ways to Teach Your Kids About Money
Published on - May 10th, 2009 (by J.D. Roth) For Mother’s Day, I invited blogger Amanda Steinberg of DailyWorth to write a guest post for moms. DailyWorth offers daily personal-finance tips for women.
Recession talk is everywhere, even on Mother’s Day. At work, at home, at the supermarket, at the library, at soccer games, and on play dates. Everyone hates this recession, and most everyone is being affected by it. Especially mothers. Why? Because we are on the front line of the budget wars.
Let’s face it, as far as we have come in our efforts to shore up equality among the genders, moms are still largely in charge of household budgets for food, clothes, birthday presents, discretionary items, track-team uniforms, new tennis rackets, and so on. So when the economy heads south and prices go north, it’s mom who usually decides what the family can do without.
But instead of being the financial heavy on this day of all days, look for the silver lining: An opportunity to teach our children about financial responsibility. Maybe you’ve had to tighten your monthly budget or take a less expensive vacation, stay in and cook rather than eat out, forego new additions to your summer wardrobe or your house. Instead of just saying “no” without explanation or example, use the recession as an educational tool.
Here are some practical things you can do with your children from ages 4 to 18 to teach them about the value of money.
Age 4: Dollars and Sense
Most four-year-olds can count, recognize letters and numbers; some have even started to read. What better time to introduce the concepts of an allowance, spending and saving? A couple of books, The Berenstain Bears Dollars and Sense and Alexander Who Used to Be Rich Last Sunday, illustrate just how quickly that weekly payout can burn a hole in your pocket if you’re not careful.
Age 7: Amortize Your Cherries
The next time you’re in the supermarket with your kids during cherry season, buy a pound without choking on the price. That’s what Fran of Dallas, TX used to do. Then, when her hungry offspring started scarfing down the cherries, she would point out that they could either eat them all at once and have no more for a long while (with a gentle reminder of the price), or they could eat just a few cherries at a time and enjoy them for several days.
You can also ask your children to help pay for those things they really want out of their allowance. They seem to have a better understanding of the value of money when they’re spending their own.
Age 12: Future Entrepreneur
Encourage your child to start her own business. What better way to understand the ins and outs of cash flow? Some jobs for a 12-year-old include dog-walking, plant & animal care, mother’s helper, gardening and more. You’ll find that kids get more excited about earning money — and saving it for something special — when the enterprise and the earning power is theirs alone.
Age 15: Checks and Balances
Take your son or daughter to the bank and have them open their very first checking and savings accounts. Remind them to bring cash or a birthday check to deposit — half in savings and half in checking. And then remind them that when the checking account runs dry, they’ll probably be paying a monthly maintenance fee until they put more money into the account. Just a little incentive to spend more thoughtfully.
Age 18: You Can Never Go Home Again…
At 18, let your kids know that after college, they’re not allowed to move back in. Shelly of Philadelphia, PA told her daughters that when they graduated from college, there would be no moving back in with mom. Once they were done with school, they were on their own, because she respected their ability to find their own way.
“I told them that my love was deep and constant, but that nudging them out of the nest to deal with life on their own would prepare them for anything that came along,” Shelly says. “Roots and wings are the most precious gift a parent can give.” Maybe you can’t go home again, but you can always stop by, have dinner and do your laundry.
Be an Example
Kids can learn the value of money at pretty much any age. It just takes some thought, a little effort and plenty of credibility. That means we, as mothers, need to practice what we teach. If we expect our children to tread the path of good money sense and fiscal responsibility, then we have to set the example. Starting today, the day when we all celebrate our mothers and what they have done for us. How hard can it be?
Okay, it may be hard. But the payoff will be a whole generation of kids who know how and when to save and spend — thanks to Mom.
To read more from Amanda, check out DailyWorth for “practical tips, empowering ideas, and the occasional kick in the pants.”
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I like the article and the basic content of this article. More kids should be brought up to have some “money scene”.
My experience is that one should treat each child as an individual and expose him or her to various aspects of money and business at an age that suits the individual.
When my two daughters were around 6 and 8 respectively we decided to start showing them what business was about and that money has some value and can be increased. Instead of giving each of them an allowance (which I believe only prepares them for a salaried job) we took the equivalent amount and bought some polished stoned, glue and clips. They then assembled anything from hair clips to earrings and sold them to their friends for a small profit. We kept this up for around a year when they upgraded to other products. Now that they are both adults and successful business people they tell me that the experience of adding value and thus making some profit will stay with them for the rest of their lives.
This same system did not work with my son, he just wanted to play so eventually we helped him to coach other younger kids to cash and throw for a fee. Today he is a very successful sports coach that is financially independent.
The lesson is that you have to start when they are small and focus on their areas of interest, that way they will continue with it for a long time and may even make a career of it like my son did.
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Good article, although I would suggest teaching them about the benefits of online bank accounts – namely, higher interest rates- and using accounts with no fees, ATM fee rebates, etc.
Also, in this day an age, when finding a job is far more difficult for a college grad, not allowing them to move back seems a bit harsher than normal. The job market is much tighter than it used to be, and competition is much greater.
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The age 18 rule is a great way to ensure your future 40-year-old will send you to a home (and not the one s/he’s living in) when you’re judged no longer able to live independently. This is the kind of self-reliant pull-yourself-up-by-your bootstraps nonsense that the rest of the world recognizes as selfishness.
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I also have to disagree with the “never let them move back in” thing. I moved in with my father, stepmother, and younger (step)sister for about a year when I moved back to the Boston area after several years going to school and working in Virginia. It was mostly a positive experience – living with my father gave me a lot of leeway and freedom to make decisions that made more sense for me long term, and I got to know my stepmother and sister better (my father remarried while I was in college). I did pay a nominal rent.
My sister and her husband later moved in with my father for several months while they were renovating a house they had just bought.
I think there are circumstances in which it makes a lot of sense for adults to move in with each other, and if you raise your kids to be independent and financially responsible, they’re going to be independent and financially responsible, and sometimes the most financially responsible decision for long-term independence is to combine households with other adults.
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Although my daughter is only 13 months, this certainly got me thinking about exposing her to sound financial advice at different parts in her life.
It’s fun to think ahead and dream/plan this kind of stuff. Thanks for the chance to do so!
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“Roots and wings are the most precious gift a parent can give.”
I really like that quote, it sums parenting up very well. Great article.
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“At 18, let your kids know that after college, they’re not allowed to move back in.”
I think that’s one of the coldest things I’ve ever heard.
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As someone whose parents allowed her to move back in with them, I have to disagree heartily with td, joey and others who think that not letting one’s children move back in as adults is a bad, harsh idea. At the age of 29, I left New York and moved in the with parents (in Houston) because I was aimless, jobless, etc. And I stayed too long. Thankfully, I ended up getting a career and getting it together, but it wasn’t because my parents encouraged, pushed or laid down rules. Had they prepared me better when I was younger for living on my own (they were indulgent parents) and being more financially responsible, it probably wouldn’t have taken me so long to become a responsible adult. I adore my parents, and I think in most ways they were wonderful parents, but I do wish in retrospect that they had booted me out of the nest and made me fly solo. Bravo to Shelly!!
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I play some of my favorite financial podcasts out loud in the morning while my sons are lounging eating breakfast before school. They have come to enjoy them and don’t think of it as learning!!
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The “you can never go home again” does seem to be more about teaching independence than good financial sense. If there is room in the family home (and you get on well with the rest of the family) then why teach kids it is sensible to pay expensive rents?
In many parts of the world this logic would just seem crazy. So extravagant and so individualist.
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not letting your kids move back home after college is a great way to force them in to debt. especially if your family is in a high cost of living area and the economy is such that it’s hard to find a job right away.
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Maybe in some cultures it’s awesome to kick your kids out after you’re done with them, but this would never fly in my Hispanic family. We all take care of each other, and are independent as well.
I hate the implication that people who stay home are not independent. It’s simply not true.
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The first four rules on this list seem pretty arbitrary. The last one is potentially destructive for families, and absolutely culturally irrelevant for many people. If my parents hadn’t let my brother come home and stay with them after college, he would have ended up living in Iowa, where he went to school, rather than back in California where the rest of the family lives.
The parents of most of my friends from Asian backgrounds would think “you can’t come home after college” to be completely insane, because traditionally children leave home in those cultures when the get married, not at arbitrary ages (18 or 22).
The other rules seem pretty arbitrary. Not bad really, just kind of made up. Sure, they might be beneficial, or they might not, or there might be something else more beneficial. There’s certainly no compelling reasoning given as to why those are the right actions at those ages.
The last one, opening a checking and savings account, is something parents seem to have been “teaching” their kids for years (my parents did this), without it being particularly useful. These things do you no good if you have no money. I had a savings account in my name from the time I was about 12. It had something like $10 in it. I never, ever went to the bank to check on it (this was before internet banking and I of course, had no car), and completely forgot that it existed. I wasn’t allowed to withdraw money from it without my parent’s signature, and I never had more than a few dollars at a time, anyway. After I got a job, then a bank account became useful. Before that, it was a pointless novelty.
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I also disagree with the move out at 18 thing.
My brother was ‘forced’ to be out on his own during a poor economic time and took a job outside his degree. Once this happened, he was so focused on this new job and surviving financially, it took him 3+ years to get a job in his field that paid him a salary he could live off of.
I on the other hand, fought my parents decision on this and was allowed to move back in. I was able to focus on getting a job and was able to prepare and attend interviews with no restrictions. I ‘worked’ an 8 hour day to get a job and after about 3 weeks, had one. I then lived at home another 3 or 4 months to get enough for security deposit on an apartment and a small nest egg and then moved out.
This ‘rule’ or ‘advice’ is more or less sink or swim and by taking the advice, you have to acknolwedge that the person may sink. I’m not saying that I necessarily would, but coming out of college with CC debt and no money for gas let alone an apartment, this would have definitely cut into my ability to focus on getting a decent or good job.
I also agree greatly with Carrie about debt. I was able to pay off all my college/cc/car debt within about a year. My brother is still working off his now 8 years later.
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I completely disagree with the “never let them move back in”. It IS very cold. I moved back in with my parents and stayed for a couple years (until I got married) and was able to save a significant amount to put toward our first home. Now 2 years later we are completely debt free. Not to shabby for a 30 year old whose parents let her move back in after school.
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Agreeing with many others that the ‘Age 18′ rule is a bad one.
There really is no “one-size-fits-all” for cases that force adult kids to move back in with their parents.
A few years ago, I found myself divorced, over several thousand dollars in debt that my ex had racked up, and unable to afford to be able to continue living in Southern California. My wonderful loving parents graciously let me move back in with them in their home in Utah, and I spent just under 2 years there, repaying the debt, saving and getting back on my feet. I’m now on my own again, and rebuilding my life with a sense of stability. Had they NOT allowed me to move back in with them, I would have been slumming about, getting further into debt, and possibly ended up homeless.
In addition, the time spent with my parents was very enjoyable, and I was able to cultivate a friendship with my parents that I’d never had as kid (for good and obvious reasons!) All three of us treasured the time I was there and none of us have any regrets.
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It seems like everyone has an opinion about the “not moving back in” rule..so here’s my suggestion too.
Perhaps a better alternative would be to make it clear that if a child does move back in that A)they will pay a reasonable rent. (I personally favor looking in the local paper for room-mate situations and rooms for rent to determine the amount) B)that it is only temporary and C)Housework is shared by all unless THEY are paying for the maid, gardener etc..
A final thought on what I would do if it were my child: Put a percentage of the rent into an account without her knowledge(50% optimally but we all have different budgets) so that when she was able to afford her next place, she would have an emergency fund started for unexpected expenses like deposits for utilities, furniture etc…
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The author of the article has some cultural-biased — most likely a Caucasian in America. To many Southeast Asian refugees, Mexicans, African refugees/immigrants, etc, in AMERICA — the whole thought “Not moving in with parents” is laughable and outright mean. For many, they live in a “collective/family oriented” mindset, where as middle-class/rich White folks in America have a “independent/individulistic/ultra-freedom” mindset.
I work with a lot of minorities — and many of these parents came to America, with no understanding of English, yet alone financial sense. Worse yet, they have not graduated to an equaivalent of a high school here. A lot of cultural barrier exists within the many Vietnamese, Cambodians, Laotians, and Hmong community. Many of their kids have to translate English documents for them; some of the parents work 2-3 jobs, while their kids don’t get enough care (let alone financial literacy) and many of the kids join gangs, get into teens pregnancy, dropping out of high school, and/or even jail. For many, there’s a huge age gap between parents and their kids. It’s not uncommon to see parents in their 50′s and 60′s and the kids being only 12-13 years old. Once they’re 18+, their parents will be in their 60′s/70′s, forcing them to take care of their parents even more.
Given these circumstances, many 18+ minorities aforementioned are living with their parents to take care of financial issues in a bad/ghetto neighborhood (some never own house despite living in America for 25+ years!). Many are also taking care of their parents due to health issues — the concept of nursing home is a form of disrespect for their parents. In many cases, the parents are living with thier kids, not the other way around.
And this economy is even making it worse for those people to “move out” of their parents. What about having your entire family laid off? In many Vietnamese or Mexican tradition, a child does not move out unless he/she gets married. Many are delaying marriage due to job loss and financial problem.
Ideally, many of these minority folks would love to move out of their parents, start their own life/business, and be independent. But the reality is, the issues are more complex than it seems. There are many people who live with their parents (in their 20′s/30′s) for good reasons.
So, please consider different cultural issues when it comes to “living with parents.” Many get offended when you ridicule or criticize them for living with their parents. The issue is a lot more complex. White Americans ignore the reality of this issue when it comes to the “living with parents” topic.
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Great post! I think it is practical and a great reminder of the things you can do to help your kids.
I think there is also another important way to teach kids about finances.
Get a job. Having kids earn their way early is a great lesson in life. This in fact starts early on with just sharing household duties to get a good work ethic started early on.
As for the 18 year old rule, I’d say it has more to do with financial autonomy rather than where the kid lives per se. I’ve known since the moment I left for college that I was on my own to get myself to where I am today.
I did stay with my parents for about four months between coming back from overseas and settling back in to what was next. I took the opportunity to work at a fire camp that had started three miles from their house and worked 16 hour days, 14 days on and two days off to earn up a nice pot of cash. I could have camped at the fire camp but that nice bed helped me get through it.
I think that even if kids aren’t staying at their parent’s house they can still rely on them heavily, so I think the two are linked but not the same.
Great posting!
Miel
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This article had some good suggestions but I also disagree with kicking your kids out at age 18. As long as I have the space, I would let my daughter stay with me. Although, I would expect her to work or contribute to the household in some way.
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@James #18
You make some good points, but I feel that your overall message is that minorities keep living with parents because they’re poor, and that’s not always it either. Many of my friends do have the financial ability to move out upon graduation, but they don’t want to, and their parents don’t want them to either. These are people with 50K-70K yearly salaries, too.
But you’re right, it is a complex issue, and the treatment this article took to it is laughable.
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AWFUL advice to have kids banned from moving back in after college.
My parents charged me a small fee every month to stay, and unbeknownst to me stocked it away into an account to help me later on down the road. After one year living with them I moved out with no debt, $36k of my own money saved, plus over 2500 they had put together of money I paid them.
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I apologize for forgetting where I came from. While the huge majority of the people following these blogs are white and middle class, some of us are poor and/or minorities.
Many years ago I lived in a boarding house in a really poor section of Atlanta (Known as “Cabbagetown”). During the summer my 8 year old daughter spent many weeks with me. She had chores to do around the house which included helping care for a 40 year old man with severe cerebral palsey. She also had a charge account at the local “ghetto store” with a limit of 20 dollars a week as opposed to an allowance. About the 3rd week she went over her limit (mostly treating other kids on the block). Instead of a fiscal lecture, I gave her a list of things she would have to do to earn the shortfall(I had figured it would require about 50 cents an hour to make her REALLY appreciate money..LOL)
I also told her that her “friends” could help with those chores so she could get square even faster. Only one of the 8+ local kids bothered to help her.
She learned 2 great lessons that summer: 1) friends who are bought aren’t really friends and 2)keeping track of your spending is VERY important.
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Like many here, I have my doubts about that ‘never move back in’ thing. That was my parents’ policy, except it was high school graduation that was the deadline, not our 18th birthdays. We each received a set of luggage as our high school graduation gift and were sent on our way. Certainly it encouraged me to be independent and dedicated to improving my life from the very beginning, but it also forced me to make some bad decisions, like getting married at 19 and getting myself into some serious debt that I probably wouldn’t have made otherwise. It certainly made college difficult as I had to pay my own way through school and support myself at the same time.
I’m currently engaged to a Persian man who is absolutely horrified at the idea of kicking our future children out – horrified that my parents kicked us out. In his culture, it is generally accepted that children will live with their parents until they are married and ready to start families of their own. He and I just moved in together about 6 months ago, and until that time, he was living with his parents. (In fact, his mother is upset that we didn’t both just move in with her!) It’s allowed him to remain debt-free as an adult and to build up a nice cushion to start his own business without taking out loans.
Like many things, the decision here has to be what’s best for the family, the culture, and the individual child. We all know someone whose parents allowed them to live at home and they took that as an opportunity to do nothing with their lives. But sometimes, it can be just the right thing.
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Okay, okay, I hear the cultural arguments, and maybe “encouraging” kids to go it alone after college would have gone over better than “forcing”… BUT, I’ve seen far too many kids shirk financial responsibility far too late in life. At some point in history, people were considered adults in their early teens. That seems to be slipping later and later. Where do we draw the line? I think college graduation is an ideal place. After 4 years of living out of the house during college (that we’ve probably paid for), kids are at a good point in their lives to step up to the plate. That’s even MORE important in tough times like these.
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although I agree with some of those points, that age 18 tip has to be one of the craziest ones yet…it might fly in some cultures, but in my family, there was nothing like that..instead there was a support system. When I finished college I did move back home before deciding on which school I wanted to do my masters at. Without their support I would have probably taken the first lame job my way and I would be sinking in debt.
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Great post, Amanda!
As the mother of 2 children that are now financially independent college graduates, I agree completely that a big part of our jobs as parents is to teach financial responsibility to our kids.
I believe Moms in particular can fall into the trap of being too soft on our children and that simply creates adults that are weak and dependent. Someday we will be dead & gone and then how will they know how to manage if we have coddled and babied them? That is not good parenting!
An integral part of their financial education needs to be that children understand the way the world works. People get paid for adding value by working. There are numerous ways to earn money. If one doesn’t work out for them, they can try something else.
Plus- we had aggressively saved and invested all the money the children had received as gifts from the time they were babies, and that, coupled with their savings from their teenage job earnings built a fabulous nest egg when they graduated! Each had a $25,000 portfolio to use to build their future.
Laying on the couch in our home and watching Jerry Springer while we pay the bills would simply not be an option–nor was it necessary!
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But, I was drawn to Shelly’s advice because I do see many young adults in their 20s and 30s avoiding financial responsibility and exploiting their parents’ generosity in place of learning how to support themselves. If that doesn’t apply to you because of extenuating circumstances (lower-income, poor health, etc), ignore point #5. If your kids are college educated and capable of living outside the home, consider whether or not letting them return home after college helps them in the long run.
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I was told by my mother at age sixteen that she and my stepfather would support me through my first college degree, and that was it. No moving home after college, and no financial support. It was going to be up to me to use my college time wisely (or not), but the clock was ticking.
That little talk scared the heck out of me and I got busy RIGHT away. I interned and worked six million different jobs all through college, and by the end of it I was offered a fulltime job as a reporter for the local newspaper. By that time, I had enormous confidence in my abilities, but I was still terrified! To my pleasant surprise, I found that “just” working forty hours a week and getting paid a lot more money for it, plus not having any homework anymore, was very easy and enjoyable!
I remember the day I graduated from college. My parents and I went to their house to eat, and my mother asked for the credit card she’d given me to use for emergencies during college. She cut it up right in front of me…what was really funny is that I actually FELT the cut in my belly-button…the credit card had become my symbolic umbilical cord!
Yes, I was scared a LOT during that time, but it was the most loving thing my mother could have done for me…to make me independent, tough and flexible. I cannot thank her enough, and, were I have been able to have children, would have done the same thing with mine, male or female.
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Everybody is talking about the 18 year old advice. Perhaps because I’m in the midst of it right now, I find the 7 year old advice lacking as well. The method of using the cherries (or whatever treat) is a very roundabout method to convey the idea of not wasting all of a limited resource immediately. In a home with multiple children, the issue is that the cherries are a shared resource. Rationing only works as long as all the kids agree to it. As soon as one kid (or the spouse who doesn’t know it’s a ‘teachable moment’) goes to the fridge and polishes off the rest of the cherries, the others have simply learned that delaying their gratification led to them losing out. Even in a home with an only child, this method relies far too much on a continuous demand for the particular treat. Halloween candy in our household is the biggest treat imaginable, and even that has a hard time occupying my kid for more than a day or two.
In our house, we do point out when things are “indulgences”. For example, going out to sushi is a real treat that we only do on very special occasions–maybe 3-4 times a year, for birthdays. When our son asks to have it on a weeknight, we remind him that we have to save up to go out for an expensive dinner like that.
What we do to teach him the value of delaying gratification is that we help him set up specific goals to save for. For example, his last choice was that he wanted a Nintendo DS. We created a chart in Excel that showed him exactly how much he was saving ($1.50/week), and showed him when he’d have enough to buy it–including the taxes that he’d have to pay. Each week we checked off the progress. When something small caught his fancy, we’d pull out the chart and show him how it would delay his overall goal. He almost always chose not to make the small purchase, although once or twice he was willing to take the hit to his schedule. He also made a point to ask us for ways to earn extra money, such as by stacking wood or shoveling after snowstorms. Even with the amount he took from his savings, he was able to buy the DS almost two months early, with no parental subsidization.
As an aside, the $1.50 is part of a $3.50 allowance–$.50/each year–that he receives weekly. He also saves a portion for college and a portion to donate to charity. The $1.50 is supposed to be split between short term savings (stuff like the DS) and a free-to-spend fund for candy and other treats, but he actually prefers to save it all for the short term goals.
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I think you can be flexible about when to kick the kids out of the nest, but beyond 2 years out of the last diploma or degree completed is excessive.
“Move out when you’re married” made sense when people got married between 19 and 25. Isn’t Italy having a crisis of “failure to launch” with a large portion of 30-something guys still living at home?
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Telling your kid that they can never move back in is like saying “you can’t have sex until you’re married” or “you can’t drink until you’re 21.”
My parents always told me they’d be disappointed in me if I did certain things, but they always made it clear that if I needed birth control or a ride home after drinking or to move back in with them or some other thing – they would be there for me. Guess what — I never needed those things because I didn’t want to disappoint them.
They key is communication and ultimately looking out for what’s best for your child.
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There are many countries and cultures where it is common for adult children to live with their parents until they can afford a down payment on their own house. However, in most cases the adult children are not living there for free and being provided for like when they were minors; they pay their parents rent and contribute towards groceries and utilities.
In areas with expensive housing, I think this makes a lot of sense. It gives the kids a little bit of a helping hand while giving them the skills to budget and function as adults in the real world.
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Assuming that your children will move out at age 18 and never return is very biased culturally and is extremely offensive to many people from other cultures.
Amanda, you *should* share commenters’ reactions with Shelly, so that you can both realize how much you both are coming off as insensitive, close-minded asses.
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Well I enjoyed this article, and find some of the advice to be sound, I do not like the 7 year old advice at all. First off, I would not treat cherries, or any fruit or veggies as a treat. I think fruits and vegetables should always be available to kids and should not be viewed as treats. Candy is a treat. Cake is a treat. Cherries are not treats.
Secondly, I believe there are FAR better ways to teach your kids about delayed gratification than through food. Americans are already so food obsessed, we eat too much or too little. Plus, reminding your kid about the price of food may make them feel guilty about eating it, and that’s the last thing you need.
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Wow….Amanda, you are so off! Things are not always easy but remember that not all your children may turn out exactly as you’d wish. As a mother, please, keep the door open. Your kids, as grown ups, might fall on hard times and need to move back home in order to re-strategise. (I know people in this part of the world are always thinking, ‘It’s all about me…I need my money to be spent on me and my stuff..’
Today is mother’s day and you have come off as one of those ‘crazy American mothers.’ Things may not always be as they appear and you can never know what the future holds. Yes, teach your kids financial responsibility and pray that all goes well but leave room for catastrophe and/or market downturns.
JD, where do you get all these people who think they have life figured out? Hmph….in such a crazy economic time in our lives?
No wonder the elderly in America are sent to nursing homes by children who don’t check on them. NEVER SAY NEVER.
P.S I am an African immigrant, well, able, independent, living in N. America…..what we call the developed world is bizarre!!
HAPPY MOTHER’S DAY!!
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The forced-out-after-college advice doesn’t even seem to have any point to me. If your kid tries to be a selfish bum freeloading off you during his adulthood, I think it’s because of stuff that happened before college. If a person did such a bad job of teaching their kid about money (and/or morals) that that’s the result, I don’t think they’re a great source of advice on teaching your kid about money.
As for the related idea of parents secretly saving a portion of rent and giving it back when the child moves out… I’d be pretty insulted if my mom did that. For one, that’s not the same as a person saving their own money; it seems like it’s trying to teach them to be one of those people who only manage to save for large purchase thanks to their income tax return.
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Shelly is wrong, wrong, wrong with the message she is sending her children by “cutting the cord” after college.
As horrified as I am sure she will be, I hope you share the reader comments with her, lest she send her children out into the world with a mountain of debt and a cold dose of reality. There’s no ‘undo’ button in parenting.
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I believe in this:-
#1: Pay the kids for their extra efforts.
#2: Get them to buy things on their own money.
#3: Practice giving and donation.
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Shelly is wrong, wrong, wrong with the message she is sending her children by “cutting the cord” after college.
As horrified as I am sure she will be, I hope you share the reader comments with her, lest she send her children out into the world with a mountain of debt and a cold dose of reality. There’s no ‘undo’ button in parenting.
Sorry, forgot to add great post! Can’t wait to see your next post!
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I will comment on how tired I am of hearing the term “war” used to describe so many things — we have mommy wars, budget wars, sexual wars, culture wars, not to mention wars in Iraq and Afghanistan. Can authors break out the thesaurus and find another adjective to describe these types of things? War implies a battle with casualties, injuries and generally something horrible. I’m hoping that making a budget is more of a negotiation or a dialogue. If it’s a tough month, it’s a difficult conversation or a tight budget. But it’s certainly not a war.
Also, I’ll support the “don’t come back home after college” people. Maybe saying it’s an absolute rule is going too far — but if one of my kids comes back home after college, it’s going to be because they are in dire straits or can’t find a job. The expectation will be, though, that they will be actively looking for a job and trying to leave the house. This may be “culturally insensitive” to some people, but it’s certainly how I was raised. Perhaps rather than attacking the author for insulting your culture, you should realize that’s part of HER culture and respect it.
Anyway, struggling a bit with an entry level job and making a budget work with limited resources lets you fail when the risks are smaller — before you are married and before you have kids. Discomfort also makes you want to work up to a better position so you can have a place of your own, buy a car, travel and so on. It doesn’t imply piling up debt and it doesn’t imply that your parents love you even less. It just means that we will be old people and don’t want to share the house with twentysomethings who stay out till 3 AM, go out drinking, have parties and so on. Also, quite honestly, people who still live at home in the US in their twenties are considered to be a little strange — especially when it comes to dating. Guys don’t want to go back to a girl’s house when her parents are hanging around, and girls certainly are more interested in a guy who lives on his own (or with roommates). “I live with my parents” is most definitely not a thing someone likes to mention.
When I was working right out of college, the people that still lived at home certainly were not saving their money. They bought new cars, went out on the town a lot, took expensive vacations and so on. Then they would talk about staying home to “save money”. Right.
I would agree, though, that a child should have a decent handle on finances and independent living prior to leaving for college. I’m wondering when the author would recommend that the children be allowed to see the family budget? I also seem to remember opening my own savings account well before 15, as well.
As for an “undo” button in parenting, there most certainly is one. It’s labeled as “I’m sorry, I was wrong about that”. As a parent and a human being, I conservatively estimate that I get at least five things wrong every day of the week. Some may be small things, some may be big things, but with family, you have to be able to realize your mistake, swallow your pride, apologize and move on.
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Hi
I think the advice about giving your young children an allowance is great. My daughter used to be a nuisance every time we went into a shop, asking for me to buy her little things. Since we gave her an allowance she is very carful how she spends her money
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@ Robyn #35: are you sure? I think cherries and all fruits and veggies ARE a treat! Yum! And as a physician, I wish more parents would give their kids cherries as a treat instead of McDonald’s and soda and candy. I can’t argue with the statement that candy is a treat, I love it dearly myself, but my mother never bought me a candy bar as a treat, never. And I am thankful for that! Because now I am an adult who never buys candy as a treat. Unfortunately I was a picky eater as a child and never viewed fruit and veggies as treats. I would not have benefited from a lesson about consumption of expensive products from division of fruits, because I just didn’t care about fruits very much.
I think as always, we’ve got to do what works for us, and the author should have stressed that approach more in the article. Don’t read into these things so literally. If your kids don’t care about cherries, use something else. It’s the principle that’s important, not the cherries! And the author has already written in here to say the same about the moving back home tip. If you have a good hardworking child who you know has learned to be financially mature, it’s hard to argue that you’re ruining them by letting them live at home for a little while after they graduate to help them find a job, save up for a down payment, save up to pay rent, or whatever. I mean, obviously, kids don’t graduate college with much money in their pockets! Even the most financially savvy kid could have difficulty.
Finally I would just like to say that I got a savings account when I was about 8 years old and a credit card when I was 16. This does not mean that everyone else should do the same, but I received a sizable allowance at age 8 to be able to put money into a savings account if I wished, and I was never the kind of kid to spend money I didn’t have using a credit card, and I think my parents knew that and got me the card to help with my credit history.
It’s all about who your kids are and what the circumstances are, just as the first commenter illustrated.
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Just wanted to add something about — of course — the 18 rule.
Many of the commenters sound pretty critical of the American “hyper freedom” individualistic self-reliant mindset and they think it’s mean to kick kids out of the house.
Well I agree almost completely but I also understand a little bit of the necessity. One of the major reasons is the way houses are built in America. Just about everything is a single family home designed to house a SINGLE family. There’s only one kitchen. There are generally no boundaries between floors. There is absolutely no privacy in the house except for individual rooms like bedrooms and bathrooms. Also, houses are poorly/cheaply built and have almost no chance of lasting for multiple generations unless they are periodically and extensively renovated. Why have multiple generations live in a house if the house is going to fall apart?
In Germany, where children often live with their parents, houses are designed with that in mind. My grandparents’ house has 3 levels and each one is completely independent. The idea was the parents live on the main floor, the first child lives on the 2nd floor, the second child lives on the 3rd floor. My grandparents only ended up having 1 child so they were able to rent out one floor.
And my parents (my dad is American and was stationed in Germany) did in fact live with them and it worked out really well. It was weird for my dad, who had the exact mentality being criticized here, but because the house was designed for it and they had plenty of privacy, it worked out for many years until he was transferred to South Africa.
Hopefully as America matures it will shift into a more future thinking mindset. People are focusing on green construction now and part of that is making houses more durable. When houses are built to last 100+ years, it will be natural to think about having it continuously occupied by your family for multiple generations.
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Wow I can’t believe the reactions to this post; calling the author an “insensitive ass”?
Perhaps her phrasing wasn’t the best but I happen to agree that children should be encouraged to find their own way unless circumstances are such that moving out would be nearly impossible.
I was allowed home every summer during uni but the understanding was that I should try and make my own way afterwards; at the same time I know my parents would have helped me out if needed.
OTOH my brother took advantage of this and, at age 31, is still at home paying minimal rent and getting his meals and laundry sorted. I don’t think this set up is doing him any favours in the long run.
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Another disagreement with never letting a kid move back home. I won’t let them sponge off me indefinitely while making no progress towards financial independence, but I’m not going to let my kid wreck their credit by living off credit cards just because they need a place to stay for a few months while looking for a job. Families help each other.
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Just saw this quote, via the Tomorrow Museum. It seems appropriate.
“The French and Italians are encouraged to live at home as long as possible. In England, kids are pushed to leave early and that creates a humor, edge, and early floozy mentality.” – Malcolm McLaren
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@david
“Where do we draw the line?” Well, how about with a little common sense. Your 22 year old, recent grad has been job hunting for months, and still hasn’t found a “real job”. She’s working part time for pocket money, but she can’t stay in the dorms after graduation. Is it unreasonable for her to move back home for a few months while she’s job hunting?
Your 28 year old son is getting out of the military. His last duty station was overseas, and while he was able to find a job in the civilian sector, house hunting from another continent didn’t go quite so well. Is it totally outrageous for him to move back home while looking for that dream home?
OTOH, if your healthy 18 year old has no job (and is making no attempt to get one), is not attending classes, maybe it’s past time for a little “tough love”.
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I viewed the “you can’t come home again” as a general “I will not be providing economic outpatient care” thing. Otherwise known as chapter 5 of The Millionaire Next Door.
Why? Because when you think you are helping, you are really hindering your adult child’s financial maturity by teaching him or her to depend on handouts. Read the chapter.
Obviously the exact details will depend on the particular family and the culture. But the concept is pretty sound.
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Like #32, Elizabeth, my parents made it clear that:
a) As long as they’re alive, I won’t be without a roof over my head, BUT
b) If I have to live with them for more than a few months and am unable to care for myself, something’s wrong, and they will be grossly disappointed in me.
The last time I lived with them was 5 years ago, when I was between jobs after college, for 3 months. Like Elizabeth, I don’t want to disappoint my folks. At the same time, the economic situation 5 years ago was much more positive… not sure how I would have fared if that was the situation this year.
Meanwhile, the only young woman I know whose parents “kicked her to the curb” (their words) at age 18 got married at 19 to the father of her unplanned child: a 30-year-old man with two other children and a criminal record. Her parents gave her neither roots (if you can’t come home, where are your roots?) nor wings. I find the quote to be completely contrary to the practice that woman participates in.
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