Wednesday, 20 May 2015

Teaching

Do some parents teach their children about managing money at all?  Or should I put it another way - do some parents not allow their children to learn about managing money?  Heard about a student this week who pays all her loan/grant to her parents and they add a little to it, and then give her an allowance each week......drip feeding her enough for one week at a time.

If this student has a history of being very stupid with money, I can see their point.  But for most, I think that they need to learn how to manage funds themselves.  The EFG has full control of her dosh, although I have sat with her a couple of times to discuss her budget and how to work out how much she might need to allocate to different budgets, and whether she is getting a good rate of interest on her savings account.  I have looked at accounts with her and weighed up the pros and cons of taking a special student account, or staying with the account she opened here a few years ago - we came to the conclusion that the main benefit to compare the student accounts against was the overdraft fees and since she didn't plan on needing an overdraft, that would be irrelevant.  Then we compared free gifts, and railcards seemed to feature heavily in that category - we had already bought a three year one and got a good discount, so that wasn't much of an attraction either - so we concluded that she might as well stay where she is!

We have an open relationship when it comes to talking about money - she told me how she had spent £60 on a pair of Doc Marten shoes, and I opened and closed my mouth like a fish a few times!  We've chatted about the best bargains in Lidl and Sainsbury's and which give the best coupons - and where to save cash.  She meal plans very well, and has done me proud.

I have hopes of her coming home a little earlier than expected as she is not well and I really want her home NOW!  She's got to work a few things out with her friends about storage, but I am keeping everything crossed that she pulls it off so that she can come home and collapse.

9 comments:

Caz said...

some people will always be poor at handling money.No amount of talking or explaining will change that.
Wether a student or not.

Ali said...

I have two 13 yr old and I give them a monthly allowance which they have to use to pay for everything except school clothes, school shoes and a hobby each, dance lessons in their case. They are learning to budget and use charity shops for their clothes.

Morgan said...

That sounds like an excellent start for your two, Ali.

The YFG also has a system in place here where she can earn money for doing extra chores like washing my car, which enable her to grasp the connection between wanting something and being willing to work for it. She has a chart on the wall in the kitchen where we are marking off her payments on her phone bill, as she chose a phone with a tariff which exceeded the budget I gave her for it - so she has to pay back the difference over the life of the contract. She's putting bits and pieces of money she has earned from babysitting, birthday money, and car wash money towards it, and eating down the debt! Early lessons in paying off debts are always useful, and I would much rather teach her about debt with me as the person to whom she owes the money than anyone else!

Sue in Suffolk said...

Daughter 1 + partner earn a fortune - well a lot more than average and spend up to their limit. If mortgage rates go up they will be in a muddle.
Daughter 2 earns less than average, spends everything and more
Son and partner keep within their budget, always save and manage well.

All from the same 2 parents who've always been frugal!

Lyssa Medana said...

My ongoing battle with bear and budgeting is, well, ongoing. At least he now asks me if things are on offer. WS xxx

Morgan said...

Interesting comments from everyone - we have no idea how our children are going to take things on board and use our example in their own lives, for sure!

lizzie said...

The saying "you cant put an old head on young shoulders " is very often true.
We all have to make our own mistakes with money and everything else. 60 quid for Dr. Martins is probably an investment - I have had mine for over thirty years....

Helen Graham said...

Hi, Morgan, I agree with you. Children won't learn unless thay are allowed leeway to manage their own money. My children have all had a little money fo their own since they were about 5 years old. They have all also had part time jobs while studying and earned their own money since they were 16. At various times they have mismanaged their money and we have helped them out, but with the understanding that it needed to be paid back, and mostly they have done so with us maybe letting them off a little of the debt. Now, except my youngest son who is still learning but improving, they are all quite financially savvy and like to tell me about their bargains and money-saving tips. I think they've learned well by making their own mistakes, but having a helping hand (not hand-outs) when necessary, so unless a child is absolutely dire with money then I think they need to be allowed to manage their own finances. Sorry that sounds a bit preachy, but its from experience with 5 children.

Morgan said...

@Lizzie - you are right about the DMs, as I know UJ has had a pair for about 50 years, so if they are looked after, they are indeed a worthwhile investment!

@Helen - yes, your experience is really valuable, and thanks for sharing. I think you have it spot on there - allowing them to make small mistakes with us there to support them when they need to is a sensible route, I think.