Giving our kids a firm footing when it comes to financial habits is one the most helpful things we can teach as parents. Listen in to today’s show as Karen shares about her struggle with being on a budget early in her marriage and the lessons she and Greg have taught their kids over the years. Hear how they handled talking about finances in their family, what they taught their kids about money, and how they still budget to this day!

Resources Mentioned in this Episode:

Smart Money, Smart Kids by Dave Ramsey & Rachel Cruze

Financial Peace Jr. Kit

Love Your Life, Not Theirs: 7 Money Habits For Living the Life You Want

Question 1: I grew up in a very privileged home where money was never really discussed. It was always just there. I had free reign over my mom’s credit card throughout high school and college and she even paid for my first apartment because the job I got right out of school paid next to nothing. (That’s embarrassing to admit now). But now that I’m married with two young kids, I can see that this hurt me more than it helped me. I am learning at 40 what a budget is, and how to say no to things and it is NOT FUN. I want to do better for my kids, ages 2 and 5. Where’s a good place to start in teaching them how money works and how to be wise with it?

Karen’s Answer: Great question! I fell into the same situation, to a T.  Not only did I not know how to do a budget, I truly had no concept of money.  When I would tell Greg I wanted something, and he said we couldn’t afford it, I just thought he was being mean.  Yes, I was young and immature, I’m just being honest.  Here is what I did with my children:

• Even if I could afford things I didn’t always get them everything they wanted.  But, honestly, when our children were young, we didn’t have a lot of money.  We lived paycheck to paycheck, not because we were unwise with our money, we just didn’t have a lot of money.  

• I told my children from a young age, “You can’t always get what you want, and if you really want something, save and get it or wait until Christmas or your birthday. 

• Do the three jars, GIVE, SAVE, SPEND

Question 2: How much did you share with your kids (like during elementary and middle school years) about your family’s budget choices or financial situation? We live in a super affluent area, so I want our kids to understand why we say no to certain things (like eating out and going places) when other families might say yes, but I don’t know how much to share or when to start the conversation.

Karen’s Answer: By elementary age and older I think it’s fine to share.  I know after Greg and I read Dave Ramsey’s book, we sat all the children down, we told them we were going to get out of debt, save money and stop eating out so much.  We went to the cash system and honestly, because of our conversation, the children accepted it and helped by not arguing to go out all the time. It was a game changer.  

Also, I will say, going cash helped my children see how fast money goes, when I would come home with the cash for two weeks they were always like, “WOW!” But, I told them, we need all of this for groceries, gas, etc.  I think it was a good way to help them learn money. Don’t be afraid to talk about money with your children, the more you do the better they will be able to handle it in the future.

Question 3:  Our son started mowing lawns for our neighbors this summer and has quickly saved up $400 (he’s 11). We’ve taught him the idea of give 10, save 10, spend the rest...but for him to spend $340 on anything (or lots of little things) seems excessive at his age! Should we encourage him to put more into savings or let him make his own choices even at this young age?

Karen’s Answer: If he is already saving money that is great. I totally see what you are saying, but he is earning the money.  Maybe sit and talk with him on what he wants to buy and why.  I’m usually in the camp that we learn in life by our mistakes, and what a great age to learn.  

It also might be a good time to talk to him about additional type of savings and teach him what it looks like when you invest a little money and how it grows over time. 

Question 4:  My daughter is 18… just graduated from HS and going to University of Tennessee in the Fall. She had a car accident and backed into a parked truck, which cost $3000 to repair! Should we make her pay 1/2? 

She’s a very good driver but we don’t want to rescue her. She’s looking for a job but not sure how hard she’s looking. Also, we are clueless about how much we give her during her college years. I know things will come up with school, sorority, and other activities. It’s been so hard for me to budget on what to give her. Thank you for your advice.

Karen’s Answer: Here is what we did with college, I told my children to get a job during the summer and that would be their spending money.  Greg and I paid for all tuition, room, meal plan, and sorority/fraternity if they were involved but anything else was on the college student. What I have noticed with other parents that I don’t think is a great idea, is to give your college student a credit card and let them charge anything on it.  That has disaster written all over it.  If you want to give her a credit card, I’d suggest to set a limit every month. I’d say, “If you go over this amount you will have to pay the balance and if you can’t it will be taken away until you pay it.”  Last thing about college, every now and then if they came home from school I’d give them a little extra spending money for when they returned to school, but that was about it.  I hope that helps.  As far as the car, that is up to you guys.  We usually paid for accident type of stuff, the only time we didn’t was when Kelsey had three accidents in a row and we wanted to grab her attention so she would pay more attention while driving.  It worked! ☺ Hope that helps! 

Show Credits: hosted by Karen Stubbs with Sunny Williams, written & produced by Katie Leipprandt, edited by Kyle Cummings

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