The following is a guest post from a friend of mine, blogger and freelance writer, Kristi Muse. Take it away Kristi!
I vividly remember being flabbergasted that you had to pay a bill for water use. I knew literally nothing about which bills cost what or how long my parents had to work to earn X amount of dollars. If I asked, I was told, “That is none of your business. Please do not ask again.”
We never went without as a family, but we were not upper class by any means. I grew up just knowing that they worked hard for their money, and they did not like to see it wasted. I’m not sure why my parents decided that they didn’t want my siblings and me knowing how much they earned. They were probably just trying to protect us from having to worry about things outside of our control.
Not only was I completely shielded from my parents’ budget, but I also never had a steady “income” as a child or teenager to learn how to budget with. My parents never gave us an allowance. They expected us to work extra jobs outside of our normal chore list if we wanted to earn money from them. Also, they always told us that they did not want us to work in high school unless it was a summer job, as school needed to be our primary focus. I was sixteen years old when I opened my first bank account as a way to save money for books and other college expenses.
I know that my parents never meant to do me a disservice by keeping me away from the finances. Due to their decision, though, I became a financially illiterate adult. I had no real concept of the value of a dollar, and I knew nothing about saving. I am ashamed to admit that, until last year, I had never even filed my own taxes. My dad always took care of it for me through high school and college. Then I got married, and my husband always took care of it after that. I only helped this past year, because I insisted on learning how to do so.
100% Income Honesty
I have immense respect for my parents. They did what they thought was best, but my husband and I have chosen a much different way to raise our kids.
I want them to know that their daddy had to work one hour for that toy, three days for their monthly piano lessons, and a two weeks for the mortgage payment. I want them to know down to the dollar what our family budget is and why it is set that way. I want them to appreciate and understand how hard and how long we have to work for each and every thing that comes in or goes out of our household. We want them to have a concrete example of the value of a dollar.
Along with making sure our budget is open and honest with our kids, there are three things that we are going to insist on as they learn to become financially stable and independent adults:
I believe that earning a weekly allowance is important. Before they have their first real job, it gives them daily, weekly, monthly, and annual exposure to what earning and saving money looks like. It is so important to teach kids from a young age to handle finances responsibly. We want our four year old to see that earning $5.00 a week, and saving half, means that they she will have $130 to spend and $130 in her savings account by the end of the year.
- Savings Accounts and Investment Options
Both kids have their own savings accounts that we will be depositing money in as they grow. Each birthday, Christmas, graduation, etc. if they are given money, we want them to deposit at least half into savings. Half of each week’s allowance will be going into their savings account as well. As they get older and have their first jobs, we will discuss different investment options with them, encouraging them to buy stock, open an IRA, and learning how to maximize their money’s worth.
- Tax Knowledge
We want our kids to leave home knowing how to file their taxes. When they turn 16, we plan on having them sit down with us to watch how our family taxes are filed and how their own taxes from their after-school jobs are filed.
We want our kids to be financially savvy adults by the time they are out on their own, so we are going to do our best to expose them to real world finances. We want them to see us paying the electricity bill and the water bill. We want them to have practical experience with saving and investing, and we don’t want tax time to be stressful or fear inducing. We want our kids to learn from our mistakes and start their lives out with money in the bank and the knowledge of how to make great financial decisions.
Did you grow up knowing about your parents’ finances? Are you choosing to take different approach towards money with your own kids?
Kristi Muse is a freelance writer, blogger, police officer’s wife, and mom to two beautiful children. She loves homeschooling, organic gardening, sustainable living, and cooking from scratch. For more information on how to hire Kristi to write for your blog, please visit her hire me page.