money and children

I’ve always been a believer in boundaries.  They are important in life for raising kids and even managing a company.  Everybody needs them.  It keeps you grounded.  Parameters are helpful.  I am also a lover of fixed costs.  No surprises. 

This past week I was talking to my friend about how we deal with money and our kids.  She was intrigued.  Everything is a learning opportunity and money is certainly one that children need to learn how to manage as they become adults.  I have never been a fan of doling out $20 here and there because nothing is learned except that you have to continue to go back to the well. 

We have been on budgets for as long as I can remember.  My kids knew about our budgets since they were young and it should come as no surprise that they are now on budgets too. 

After graduating college, Fred and I traveled around the country for 5 weeks in a Toyota Corolla.  When our journey ended we moved to NYC to seek our fame and fortune.  We both had jobs ready for us.  We found an apartment and were ready to roll. 

We pooled our finances and got a joint checking account because I believe we saved fifteen dollars a month having one account.  Even though we had been together for a while Fred had never experienced shopping.  I will never forget when I came home after a small shopping excursion with a pair of new shoes.  Fred freaked.  He came from a family of all boys in a military household and shopping was definitely not high on his list.  I came from an upper-middle class Jewish household where new clothes were as essential as food. 

Fast forward a few years, Fred goes to graduate school, he comes back to NYC and we get married. While he was in graduate school, I was in charge of the money as I was the one making anything significant.  After his graduation Fred says to me, I want to take over the finances which was fine by me. What he did was brilliant.  He created a spreadsheet that we now refer to lovingly as Fredsheets of our income and costs.  He put us on a budget.  In reality, he put me on a budget that he could live with.  It wasn't that I ever went wild and put myself in debt because honestly I wouldn't be able to sleep as night but it was his comfort level.  As long as I stayed on budget, Fred could care less what I purchased.  If I came home with a fabulous jacket that ate up the entire month, he couldn’t be happier because he knew I would never go off budget.  I could carry over from the last month but never over spend.  I can proudly say that at the end of the year when we tally up the numbers, I always hit them. 

The budget has certainly gone up and down over the years, but I still stick to it today because it works. My friends always got a good laugh about the budget but it is perhaps one of the keys to our marriage.  I did not want to hide what I bought nor did I want to hear any shit about what I bought. We use budgets for everything. 

We now have the kids on budgets.  It is teaching them how to manage their money.  When each of them hit 9^th grade, essentially high school, they got a debit card.  We deposit money the first Monday of every month in their account.  That is their money for the month.  It is used for entertainment and getting around the city.  Each kid has absolutely blown the bank when they started out but forcing them to suck it up until the next month rolls in has definitely taught them all a lesson. 

When Jessica turned eighteen, and she went off to college, we created a different budget. She also had some money from her bat mitzvah that she had invested which she was allowed to liquidate. We agreed on a monthly number.  When she got a bigger budget that truly covered everything from clothes, to entertainment, to life, it was exciting but not as easy as she thought.  Being able to manage her own life and money gave her independence.  At the end of each month, I see what was spent and send an account of the money on what can be carried over or not.  Emliy and Jessica are both on this budget plan.  The one thing that is not on their budget is travel and of course family vacations which is a luxury that we want to support.

This has absolutely taught the kids the value of a dollar and how to manage money.  When they begin to work and have a salary, my guess is they will fall back on what they grew up on and know exactly how to pay rent, buy clothes and still have money left for entertainment. 

I love the budget!