No One Has Carte Blanche!

The pandemic has thrown families everywhere a real curveball to say the least. But social distancing is presenting more than just challenges; it is also giving families with older kids a real opportunity to well…just talk more. From our vantage point, some of those opportunities should absolutely be used to discuss money. As few as four conversations with teens can allow your family to exit the pandemic with money-smarter kids. You don’t need to be an expert or download an App. You only have to take some of the time you are already spending together and speak honestly about your experiences earning and spending. Tonight at dinner, consider discussing your very first full-time job after leaving school.

Many young people believe they only have to get to the point in life where they can finally be done with school and “get a job” – to experience financial freedom – to be able to buy “whatever they want”. But adults know it’s just not that simple. It can come as quite a shock to discover just how little of your at first-glance large grown-up pay-check is leftover for actual discretionary spending, once you start paying for all the things that your parents used to: rent, food, utilities. And let’s not forget about taxes!

Can you put your hands on your very first T4 or W2? Bring it to supper and describe what your life would look like if you were still making $9000.00 a year. Do you remember being surprised at how much all the payroll deductions added up to on an annual basis? How many years did it take to double your annual income? A decade? Two? Has there ever been a time when you felt like you were making enough to meet all of your family’s needs and their wants? Have you noticed how the level of income you believe will allow you to achieve that seems to creep just ahead of your actual income – every single year? There are entire fields of study about this very dynamic, (Yale’s extremely popular course examining some of them is available right now on Coursera for free) but let us summarize them in very simple terms: income and happiness are only highly correlated up until the point a family can eat under a dry roof.

Spoiler alert: Even when you are all grown up and earning “your own money”, discretionary spending has to be planned for – otherwise, you can still easily end up with more “swipes” at the end of a month than income.

At it’s best, a conversation about the first time parents lived and worked away from home, cements all the reasons why careful spending is so important. Discuss celebrities and athletes who never managed to achieve financial security despite earning larger incomes than most families could ever hope to. They made a lot, but no one showed them how to spend what they made carefully. If you want to employ a sports analogy, as we often do when conducting in-classroom workshops, it’s not enough to practice strong financial offense in the form of high wages. Strong financial defense in the form of careful spending is equally important.

No one can sustain unlimited spending. Convincing your teens of this historical fact, drives home the power of being frugal almost more than anything we have seen.

Hang onto hope everyone. Lets get through this thing, if nothing else, with money-smarter kids.

If you are interested in how children research the full value of a request or purchase (before they make it) at one of our in-classroom workshops, please click on the Green or Pink Buttons below. Of course, they can also do this at home!

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