Thursday, November 18, 2010

Excerpt from In The Trenches - If kids were meant to fly.

This is one of my favorite financial topics: teaching kids about money.  They are so smart and so unencumbered by past mistakes that it is a joy to involve them in the process.  Kids are pretty much a clean slate and what is written on that slate can influence the future and help them avoid all the trial and error we as parents have endured on the road of life.  On with our story...

The easiest way to tell the story is to tell you about Joe and Michael.  Joe couldn’t wait to grow up.  His parents told him that they would buy him a car when he was 16. He counted the days.  Finally it happened. A new car, insurance paid for, and they even kicked in some gas money. Joe spent the next two years hanging out with his friends waiting for the next milestone in his life, which was when he turned 18 and moved out.

Right after high school he got a job and was ready to make the move. Now that he had his own place he could have girls over and someone was always able to get some beer or whatever sounded good. It was one big party all the time. If he ran short on food or the rent some of his friends would pitch in because they were often over and crashed on the couch. By age 22, Joe had racked up credit card bills to the limit, had his car half way paid off, and no extra money in the bank. He met Candy and she started spending the night on a regular basis. When they found out she was pregnant she moved in permanently. They were so excited to have a baby coming along. The doctor said it was going to be a boy.

This is not a real person but a composite of many people I have met. Young adults who go off into the world unprepared, unskilled, and headed for trouble and headaches the rest of their lives. Is it surprising then that under the stress of this that the divorce rate soars and everyone is left for the worse for years to come? It may take until they are thirty or forty to recover and get back on track.

The next story is a true one of my own son Michael. I homeschooled Michael in the forth grade because I wanted to ensure that he got a good start. We did everything together. Unit pricing at the grocery store, working business deals, hammering nails, and managing the house. I would have him prepare a menu for a month, make a grocery list and off we would go shopping. His first business was raising rabbits. We worked to figure the expenses and we worked with a rabbit farmer in trade for the cages. We worked together to build the big shed that was to house the cages. He saved his money to get his first rabbits and we did all the paperwork to plan and manage his business and look at the profitability. The rabbit business ultimately did not make a profit and we sold the rabbits but we did succeed because he retained all these lessons.

At this time I began talking to him about a wife. Yes, a forth grader. I told him that someday he would want to marry but that he had to prepare so that he could provide for a wife. I told him it was the man’s job to provide the house and that he shouldn’t even start dating until he had a house because he might fall in love and he would not be ready and have nothing to offer. I reinforced these ideas over the years and although he didn’t do things exactly as I said, (what kid does?), he was listening.

As far as traditional structured school work we spent two hours a day in studies and incorporated the rest into our daily activities. He learned his fractions while we cooked and baked. From this he started a pie baking business. We studied Spanish and worked on memorizing the Declaration of Independence. When he took his required annual state tests he scored in the tenth to 12th grade level on all subjects.

The next two years he attended private school on a scholarship for low-income people. I was required to provide the transportation so I worked at McDonalds because it was the only job that would work with my schedule.

Don’t think we were rich during this time. I was a single mother of three children. My mother helped with the mortgage payment and economy and thrift was our way of life.When Michael was in the 8th grade we stayed at my mother’s for almost a year. The older kids had already moved out. There were more job opportunities in the bigger city for me at that time and I worked one full time job and a part-time job. I continued to keep and pay for my own home in the rural community. My goal was to get out of debt and return home. After one year my financial situation greatly improved and I did move home. I also remarried.

Michael decided that he would like to stay at my mother’s because he had already found a job with the city parks department and also an ice cream store. The decision was mutually agreeable to all so we did it. At age 16 he got a job at a bank as a teller under a training program. He worked full time in the summer and adjusted his school so he could work part-time while he finished high school and took a couple of early college classes. Don’t think that he didn’t have a social life. The weekends were go, go, go.

When he graduated he worked full time for the bank and joined the Army Reserve. All this time he stayed with my mother rent free and banked and invested all of his extra money. 000000At age 20, he bought his first house with two other guys with the plan that they would sell it in about 5 years. At age 21, he bought his first 4 unit apartment which I manage for him. At age 22, he is working on obtaining other investment properties.

He is also getting serious about dating and is ready when he finds the right girl. He drives a Mercedes SUV. He is active duty in the army and is a Realtor with whatever extra time he can make. The point of this long story I hope is clear. There is a different road. We don’t have to wait until they are 18 and boot them out to sink or swim. We can equip and prepare them for the inevitable task of providing for themselves and choosing a spouse. These things don’t just happen by magic.

We can teach them as much as we can and then hope and pray that they will use the tools we give them wisely. And, when I say hope and pray I do mean it literally.

You might also like this story from Get Rich Slowly - Capitalist Kids, Encouraging Young Entrepreneurs.


Practical Parsimony said...

Carol,I cringe when I hear parents say their children must move out when they are eighteen. I always predict that these teens will have nothing better to do than to get married and have children. Well, you know they often get the cart before the horse on that one.

My son lived with his father through five years of college, got teaching jobs at hs level and college level, simultaneously. By living with his father and working two jobs, he saved to buy a house. He did follow my advice--get an education and good job before getting married. He was 37 when he married a 27-yr-old English teacher. They were able for her to stay home for seven years, until their second child starts school. Both were equipped for marriage and a family. How sad life would be if I knew my child were struggling in a minimum wage job, going in debt, and allowing problems like health and dental to go untended, all because of lack of guidance or because of being kicked out at 18.

Carol said...

Thank you for the words of encouragement. I know that this is a subject that I go against most of the common thinking prevalent in our culture. I think we are now paying a high price. Yes, many are able to succeed however many are also falling by the wayside either literally or in greater debt and frustration than needed because they were not fully ready to take on a home and family of their own. The divorce rate is 50% and money is the number one fight topic.

Olivia said...

Thanks for the encouragement. My folks bought into the "hands off" approach to childrearing. I've been making my own way since I was 17 and picking up skills on the fly. Not fun. We're teaching our sons life skills before they go on their own. Sometimes they balk, but they'll be far better off with a bit of knowledge under their belts.

Carol said...

I think the point was most dramatically brought home to me by a young man who worked with me at McDonalds. He struggled so hard to "be a man" based on doing it all on his own. He was such a nice young guy and when the pressure got too much from the finances and a break up he committed suicide. Others crash and burn in less final ways and take years to recover usually bringing babies along with us. None of us were meant to go it alone. Whether the support is given through advice, encouragement, or walking beside someone it's important to be there for one another, especially our family members.