The housing market is down. Unemployment’s on the rise. Yo-yo stocks aren’t helping the economy either. We’re going into winter with an expected 15% increase in residential fuel costs.
And the holidays are upon us.
Since a lottery win is unlikely, what we may need most from Santa this year is a lesson in financial discipline.
Search Institute has identified Responsibility and Planning and Decision-Making as two of the 40 Developmental Assets. Research shows these are characteristics of healthy, caring, resilient kids. The more assets youth have, the more likely they’ll resist risky behaviors in the future. And financial discipline is one of the ways we can demonstrate these assets.
We could blame our financial derailment on the credit card companies, the marketers, or those darned Joneses, but the bottom line is that we are neck-deep in a philosophy that stuff is an absolute necessity – a lot of it.
For parents of teenagers, it may be a tall order to dial down the materialistic needs that crop up every time their friends get a new gadget. But if your kids are young, it’s not that hard to correct this philosophy. The toughest part is becoming disciplined ourselves.
There are many ways to improve our financial discipline.
Create a budget. For many people, half the battle is admitting we have a finite number of dollars to work with, despite the fact there may be a dozen credit cards in our wallets.
Use paper, not plastic. Cash insists we stay within the budget we’ve planned for.
Save to spend. If you have your eye on a must-have camera lens, make a personal savings plan. Use auto-transfer into a special savings account, or open an Ing account that bears above-average interest.
Give up something to get it. Consider simple sacrifices that could help you get what you want. Our family quit cable with ease in September, and we’ll decide as a family what we’ll buy with the monthly savings.
FOR YOUR KIDS:
Make miniature managers. Let them manage money. Whatever system works for you is fine, but somehow kids need to have money in order to learn to be responsible with it. The key is to establish a situation where they’re forced to make choices – without parental bailouts.
Save to spend. Their “auto-transfer account” may resemble a porcelain pig, but the philosophy is the same. They need to decide what they really want, then delay the purchase until they have the cash.
Discuss marketing. When my kids buzz about the commercial they just saw, I respond, “Those advertisers really know what they’re doing, don’t they?” Candid conversations about the way marketing works will help introduce a discussion about financial responsibility.
Give up the power. When friends have something your kids really want, use this as a conversation-starter for how they will manage their money. “You really want one of those. How are you going to get it?” If it’s truly a priority item, there are usually a few ways to save – birthday, Christmas, or extra chores to name a few. But when your kids realize simply wanting something won’t make it land in their lap, it may magically become less important.
How do you teach financial discipline to your kids?
Thanks for joining in to build assets in your kids! Please join me next month for part two of Financial Discipline: Cost-Saving Ideas for Christmas.
Kelly Curtis is a Wisconsin school counselor and author of Empowering Youth: How to Encourage Young Leaders to Do Great Things. To read more about Kelly, please visit her Weblog, Pass the Torch or follow her on Twitter.