Frugality – Teach Your Children Well

by Claire K. Levison

saleMy dad is a master of frugality.  His brother often remarks that it’s “the family way.”  As a kid, I thought my dad was cheap but as it turns out, he’s just smart.  He knows what’s important to him and what isn’t.  Those priorities are reflected in the way he spends his money.  The car he had when I was in high school was the base model.  It didn’t even have a radio.  When I would ask him why, he would say, “I don’t need a radio in my car.”  When Dad would take me to a fast food restaurant (a fairly rare occasion), he was never willing to buy drinks.  “Those drinks are so over-priced.  We can get a drink at home,” he would tell me.  As a child, I didn’t understand it.  It drove me nuts.  Now as an adult, I can see that where it drove me was down a path of financial success.

As a mother, I’ve vowed to teach my children to be frugal too.  My fourteen-year-old hasn’t fully embraced the concept yet.  She does enjoy seeing her money go further when she buys things that are on sale, but she’s still fairly enamored with high dollar items.  And I’m not always as good as my dad was when it comes to holding firm.  I can’t remember my dad ever giving in to those fast food sodas.  Although I’m sure he must have at some point during my eighteen years of childhood.

And yes, as time goes on in our society, it seems that ante is continually being upped.  Instead of a soda, my daughter wants UGGs. When I bought her first pair, I remember thinking, “I can never tell my dad how much I just paid for these boots.  He will think I have completely lost my mind.”  Although I was buying an expensive pair of shoes for my daughter, frugality was still churning inside me.  When I looked at the price tag of those boots, it set off an alarm in my head.  Even as a grown woman, I was asking myself what my dad would think of that purchase.  It made me feel uncomfortable.  It made me think, “This should be a rare occasion.  This should be a special treat.”

I could tell you that you should never buy your kids a pair of UGGs or some similar name brand item, but I’m not going to. I think as parents we can find a balance between providing a lifestyle that allows our children some flexibility in a world that puts such a high value on material things and providing a lifestyle that shows our children that frugality will ultimately be a roadmap for financial success.

I expect, like it is with so many other lessons we try to teach our children when they’re growing up, that it may not be until my daughter is out on her own that the light bulb will really go off in her head.  I picture her being debt-free, having a solid savings account, and investing for retirement and other future needs she’ll have.  I picture her standing in the midst of her firm financial foundation thinking to herself, “Wow, I guess Mom really did know what she was talking about when it came to all that frugal stuff.  She taught me well.”  I don’t think this is too much to hope for.

But for now, my sweet daughter just rolls her eyes when I drag her to the clearance section at the back of a store.  I don’t go shopping that often but when I do, I always hit the clearance racks first.  Maybe it’s my version of a radio-less car or a soda-less trip to McDonald’s.  Dad taught me well.  Teach your children well too.

Clare K. Levison is a certified public accountant and author of Frugal Isn’t Cheap:  Spend, Less, Save More, and Live Better.  She is a national financial literacy spokesperson for the American Institute of Certified Public Accountants (AICPA) and has appeared on major radio and television networks across the country discussing various personal finance topics.   She has served as a member of the Virginia Society of Certified Public Accountants (VSCPA) Board of Directors and was named one of the 2010 Top Five CPAs Under Thirty-Five by the VSCPA. Levison has more than a decade of corporate accounting experience and is also an active volunteer, serving as PTA president, Girl Scout leader, and Sunday school teacher.  She lives in Blacksburg, Virginia with her husband and two daughters.

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Tips For Children About the Basics of Money

by Patrick Bet-David

kids-moneyIt’s not that kids shouldn’t have fun, but today’s distractions are taking too much time from more important things like learning about money. Whether kids are going to the movies, shopping for clothes or music, buying a car, trying to help support their parents or even working a couple of jobs to pay for college, money is and always will be an important part of our lives.

 

Use these tips for children to learn about the basics of money:

 

Start a habit of saving money – Whether someone gives you five bucks or you just got your first paycheck, whatever money you are making, try to save at least 10% in an account that you try hard not to touch.

 

Start a budget – Open up your own savings account and learn the basics of having a bank account. Start a budget and learn to manage it.

 

Shop around – It’s tempting to see something we like and buy it on the spot, and that’s called instant gratification. But if you go online or wait a couple of months for a sale, that same item may cost less which saves you money.

 

Avoid credit cards at all costs – If you plan on buying an awesome car, buying a house one day, or being taken seriously in any business venture, your credit score will play a huge role in how much financial companies will trust your spending habits.

 

Focus on earning – Saving is very important, but if you’re not earning money you won’t have any to save. Start thinking like an entrepreneur at an early age. Open a lemonade stand, car washing business or pet walking service. The key is to offer a service that people are willing to pay for.

 

Expect more – People usually make the amount of money they feel they are worth, and most people sell themselves short. Teach children to have a high self-image, and they will create a world for themselves that meets that self-image.

 

Download an app on your phone – There are so many apps for managing your budget and savings on phones nowadays that you can track your money on the go. Get in the habit of keeping tabs on your spending habits.  Kids will have more fun doing this on their phones and tablets.

 

Bet-David says there is a difference between just saving money and building an awesome financial foundation, but it’s a good idea to start with the basics.