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Penny Pincher or Money Burner?

Posted by on Jun. 3, 2012 at 12:17 PM
  • 14 Replies

Are You Raising a Money-Burning Spender or a Penny-Pinching Saver?

Posted by Janelle Harris

Saving moneyKids can coach you through the set up of a Skype account. They can recite the full lyrics on any MTV playlist. They can bring you up to speed on reality show melodrama. But when it comes to money matters, they are completely and totally clueless. And if you don’t teach them to care, they’ll run roughshod all over your bank account until they have one of their own to destroy.

I’ve already concluded that, should a fairy tale character show up here in Washington, D.C. peddling magic beans or secret potions, Girl Child would be the line leader. Homegirl has a real cavalier attitude about money that I just can’t seem to shake. That became quite clear when she lost a $20 and didn’t even break a sweat.

Let me tell you something: if I lose 20 cents, I’m down on the ground scouring, looking, searching, trying to figure out where it went. For $20, I might take a day off of work and unfold a full-out investigation complete with witness interviews and shakedowns. Not because I’m cheap—I like to call myself frugally fabulous—but because I hate losing stuff for one and for two, the thought of wasting money I’ve worked for really grinds my gears.

So I instituted the opportunity for her to work for allowance, even though I don’t really believe in kids being paid for things they should be doing around the house because they live there and need to be contributing anyway. Once they’re old enough to tell you they can’t find the TV remote or start asking for their expensive little hearts’ desires—like video games and $150 sneakers—they’re old enough to get a little household chore to do on a regular basis.

But the bottom line is I want her learn the value of money and the benefits of saving it. Childhood innocence assumes that cash flows in bountiful supply from parents’ wallets and purses, but I stomped that dreaminess a long time ago with snippets of reality about money in the adult world. It’ll take a while to sink in, I understand. And there are plenty of distractions to dissuade her from saving the crisp, spendable dollars she gets for birthdays, good report cards, or this whole allowance thing, but I want her to get it early before credit cards get a whiff of her greenness. You know the rest of the story.

Four years until she graduates from high school and the loan sharks start circling. Sheesh. I have my work cut out for me.

Is your kid a spender or a saver by nature?

Any valuable lessons you have to share that changed their spending habits?

by on Jun. 3, 2012 at 12:17 PM
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Replies (1-10):
mumsy2three
by Shauna on Jun. 3, 2012 at 12:19 PM

I am a penny pincher. Our sons take after me more in that respect.

My hubby is a spender, our dd takes after him.

I try to instill the idea of needs vs. wants while deciding on a purchase.

annie2244
by Silver Member on Jun. 3, 2012 at 12:25 PM
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They are penny pinchers, because their allowance includes clothing allowance, and no advances are granted. You want something you don't have money for, you do extra chores or you wait.  And allowance is cut in half at age 16 and cut in half again at age 17. When they graduate from high school we are responsible only for room/board/tuition/bks and continuing them on the family cell plan if they can live with their portion of the minutes. They pay for phone internet if they want that. And both HATE the thought of big debt. Both are talking about attending colleges the total bill for which is within the amount we've saved for them, and are pondering whether to try to make a part of it last for the first part of graduate or professional school. We've shown them how cheap it is to buy a house you can pay off quickly and then trade up later after you've socked another huge additional down payment on the new one, vs buy a big one off the bat and pay all that stupid interest, or pay with a paltry down payment and have to pay the even more stupid mortgage insurance. We've shown them the difference in taxes and insurance on the new car and new house vs the old car and old house. We've shown them the value of dollar cost averaging on retirement investments, and the huge benefit of starting retirement saving early and aggressively so that by the time you're 45 your money is earning loads more than you are putting in.  They know the reason neither the DH or I freak out when one of us loses a job and we're out that income for a period of time while that person finds a new one is b/c we save the money before we buy something, and we live way below our means.  I think they'll be fiscally prudent adults., 'cuz we waste no opportunity to instruct them and have them live the lessons we wish to convey.  Time will tell.

But I'm finding just knowing and being forced to live a fiscally conservative lifestyle does not a prudent adult make! The other ingredient is a WORK ETHIC! My 16 y/o is, am I a bad mom for saying? LAZY.  Chores are only done after going days w/o privileges and only then if a friend event is coming up in the next 2 hours that she wants to attend. And if she can make her now much more meager allowance last by being frugal she'd rather do that than get a JOB.  Aargh. Most couch/bed prone kid I've ever met. Sorta alarming. Procrastination is her middle name. So is figuring out a way to get the gold star without doing the work. So is her thinking that thinking positive will get her a good grade.

So I think it's more than just being frugal. B/c frugal thinking with indolent living may keep you out of debt as long as you live really cheaply, it's not enough to save for retirement, and if you've never earned much money from 20-67, the gov't isn't gonna hand you much soc sec. Not enough to live on (even if it exists in 40 yrs). So, moderately frustrated. We've cut off her allowance for the summer to force her to not simply penny pinch over the summer but get a JOB and off the couch.

atlmom2
by Susie on Jun. 3, 2012 at 12:32 PM

I hope penny pinchers.  I should say a live within your means no matter what your means are.  That is the way we have always lived.  No way have we ever paid interest on our credit cards.  If there is $10 its paid off, if there is $3000 its paid off without any interest.  We have always talked about how to save.  Heck my dd is 21 and got a Roth IRA 2 years ago.  She also has stocks she inherited from her grandma.  She knows never to touch that.  It is for retirment.  The best time to save money is between 18 and 30.  After 30 its not as beneficial for retirement.  My dd had saved $14,000 in the bank before buying her car last month. 

sunflowers12
by on Jun. 3, 2012 at 3:43 PM
I have a great solution 16 job time buy your own crap... You be surperised about how much they don't need...
bizzeemom2717
by Jen on Jun. 3, 2012 at 3:55 PM
We as a family are not either extreme, however we have always tried to live within our means and debt free. I hope my kids do the same as adults.
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Manth
by on Jun. 4, 2012 at 8:20 AM

My kids are pretty frugal with money - but they had to learn to be that way.  We started with a small allowance the year they started school - 50c per year of age, which could be supplemented by doing additional chores around the house.  Yes, ideally they would contribute without being paid to do it but the reality is I got sick of nagging and offered bribery instead.  They do have some chores - basically personal housekeeping like putting away their own laundry - that must be done without pay AND if they are not done in a timely manner I do them and charge their allowance for the time I had to spend doing it.  They soon learned they did NOT want to give up their precious allowance.

I always let them spend their money on anything (legal) that they wanted.  At first yeah they went crazy buying candy each week.  Then they wanted toys - but they had no money to buy them and Mum's purse wasn't open for toys any more.  So they learned to decide what to spend their allowance on, and if it was better to have candy now or a toy in 2 weeks time.  And they learned the joys of delayed gratification.

In High School they looked for work but to be honest jobs are seriously thin on the ground around here for teens.  If a company DOES hire you, they want you to be able to work full-time, not part time after school and weekends.  My older daughter put in loads of applications to places the week she turned 14 1/2 (minimum working age here in South Australia).  To date she has had not ONE call back - and she is 17!  Employers just are not interested in hiring teens part-time here.

To be honest, I would rather keep paying them an allowance and have them concentrate on studies anyway.  To me, keeping their grades up (we expect nothing below a B and As are preffered) is more important given the University studies they intend doing (17 yo IS doing, she graduated a year early and is half-way through her first year as an Engineering student).  Their courses demand high grades to get into.  DD#1 also won a scholarship for her Engineering degree that will only continue for the 4 years of her degree if she continues to get high grades.  Much better that she has time to study rather than offering Fries With That!  And she lives at home so I see her studying on a regular basis of an evening and on weekends so I know she is doing the right thing.

fantasticfour
by Grumpy on Jun. 4, 2012 at 8:30 AM

I have one spender and two savers.

hotmommytutu
by on Jun. 4, 2012 at 11:43 AM

My girls (9 and 12) are spenders with my money, savers with theirs!

drfink
by Emily on Jun. 4, 2012 at 1:53 PM

Mine are in the middle.My daughter was a SPENDER then we put her on a clothing allowance in high school as well as her regular allowance.Her church clothes and things of that nature didn't come out of her allowance.There was a time she wanted to spend a ton of her  clothing allowance on one silly foolish item.I bit my lip and let her.Worked like a dream ,she did regret spending so much ,there are no advances so poor ,poor girl...haha...had to make do with the ton of clothing she already had .She learned her lesson and is now thinks about her purchases and saves when she works in the summer.

All of my boys are savers.They are too generous with gifts for us , but they both save and spend appropriately I think .

I no longer think cash only is the way to go.We use cards but pay them off each month but our oldest son chose to go only cash and it bit him.Our 27 year old had in savings the cost of a town house he wanted to buy but had always used cash.He didn't want to pay for the house in cash .We gave him a car for college graduation so he had not paid for a car.He was cash all the way for everything furniture etc.He goes to buy his town house and they wanted to charge higher interest ,he called us to ask what to do.We visited the lender t with him and were suprised to find out despite havinfg more cash than the house cost he was considered a a risk due to a lack of credit purchases..We could have co- signed but that would not have been a huge help for his future credit.He went to USAA and they helped him get  very good rate and approved him.He now buys some things with a credit card and pays it off each month.He did buy his washer/dryer and frig on a pay in 12 months no interest deal to have proof of that kind of credit .

We try to be in the middle.When we were younger I was a bit more of a spender and my husband could be almost a miser at times .UGH.But between us we were how we should be and we both changed to become more like each other except no one is a miser .We agree there are times and reasons to spend and times and reasons to save.

annie2244
by Silver Member on Jun. 4, 2012 at 3:35 PM

Credit rating is all about having a long history of NEVER being late on a payment, and having a lot of credit you've got available but aren't using. That's a good lesson me and the DH should add to the list of things to discuss with our teens at dinner. It isn't something that teens/young adults would otherwise know, sadly, b/c financial education isn't on most high school's course list.

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