Dear Finance Diary,
I was luckily one of the few people I knew that was good with my money from a young age.
While I had friends that were buying trinkets, snacks, toys and gadgets, I was always conscientious that money didn’t grow on trees. I also second-guessed myself about purchases I would make. I initially thought this made me weird, but I am rather thankful looking back that I stuck with it.
We can’t necessarily say our upbringing dictates our relationship with money. It certainly isn’t the only factor. While it does have a strong influence, I have had a different relationship with money than those around me even though we grew up living similar lifestyles, went to the same schools, had the same kinds of environmental influences, etc. Somehow, we all can still end up different.
No matter the factors, it’s not to say it’s impossible to teach good money habits to your kids, and it’s certainly never too late to learn them. Here are a few of my favourite money habits that I believe in:
1 . Not Getting a Regular Allowance
In my home, an allowance wasn’t just earned simply for existing. Allowances were tied to certain tasks and chores being accomplished. Not just picking up after yourself or doing your dishes (those to me are just human decency).
Instead, helping to paint or weed the garden, shovel the snow from a very long driveway, mow the lawn, etc. were the kind of tasks that earned you money at home. The kind of tasks that my single mother didn’t have the time to do on her own and could use the help with.
Earning money, and truly earning it by working for each dollar, really helped me understand that money is never just handed to you in life. It helped me understand that when I spend it, I’m exchanging the hours I worked for whatever I was buying. This made me second-guess my purchases and has greatly limited me in frivolous spending.
I actually read an interesting article where a woman discussed introducing the concept of taxes to her children. What she did was to always tax their allowances to help introduce them to the concept of contributing taxes to improve the community. With the “taxes” the mom collected, she put it towards family things, like a family vacation fund or movie nights or maintenance of the family pool. This helped them grow an understanding that taxes go towards the benefit of the community (or the family in this case) and that it was normal to pay them. It became normal for them to have to pay taxes, so by the time they started working real jobs, they weren’t bothered that money was going towards actual societal taxes.
2. The Concept of Budgeting and Saving
I’m not specifically sure what I could have been saving up for as a child, but I do remember as a teenager that I desperately wanted the new iPod. This was before my first hourly job that would come a few years later, so I had to get creative.
I went to the store near my home and asked the cashier if he could please tell me the total of the iPod including taxes. He told me the total and I thanked him and left the store.
When I got home, I put the dollar figure at the top of the page on my notebook, and I broke the figure down. I calculated how many hours of snow shovelling it would equal to. I calculated how many hours of grass mowing it would be equal to. I calculated how many lemonades I could sell, or what I could sell in my room to get to the amount I wanted.
Every time I grew my iPod savings account, I became more and more focused on reaching my goal. It was becoming easier to forgo getting a snack I didn’t need at the convenience store, or not getting into Pokemon trading cards. Since I didn’t really care about those things, I focused on my iPod. As an adult, this is an amazing skill to have. I realised that fads and trends never really go away, they just change as we get older. Learning to say no to things that aren’t meant for us was a more essential skill than I could have known at the time.
I’m pretty sure it took me more than a year to get the iPod. I can’t remember how long it was exactly, but a new version had come out by then which made the version I wanted less expensive. I do remember quite clearly the day I bought it and buying my first songs on the iTunes store. I was so happy listening to my favourite 4 songs (all that I could afford at that point haha). That moment and that journey really solidified my character of saving.
3. Avoid Comparing Yourself to Others
This was another great one I learned from my family, and it rings truer every day.
My late uncle, late grandfather and my mother started a charity toy drive 23 years ago to get gifts to every child in our community during the holidays. Being a child myself throughout these initial toy drive years exposed me to seeing how fortunate I was in juxtaposition to the children that we were helping out. It often made me feel embarrassed about the things I owned and easily had access to. There was genuinely nothing I had done to deserve the life I was living, and the inverse was certainly also true.
It’s quite easy to compare ourselves to others, we tend to do it subconsciously. We see someone with a nice new car, a big new house, a promotion at work, going on a nice holiday. However we can do it in a way that we recognise them without being jealous, or wondering why we can’t have the same things.
We never know a person’s true situation: they could be heavily in debt, they could have received a huge financial gain from the death of a family member, they could have been saving for years, they could have had help from a family member, etc. etc. etc.
We have no idea what someone is experiencing financially. Just like others don’t always know ours.
I think to the children that must have compared themselves to me during the toy drive, thinking that I must have the best life. But I also think that in my eyes, there is someone living a better life.
We’re never really happy with what we have if we spend time comparing ourselves to others. And we don’t have the chance to be grateful and thankful for what we have if we’re always making these kinds of comparisons.