Broker Check

Losing The Purse Strings

March 09, 2023

Well, here I am. I am in a position I never thought I’d be. I can’t control my kids’ money anymore!  

When my four kids were little, it was easy to hold the purse strings. My kids would get some money for a birthday or Christmas, and I would basically help them spend it. Examples included a trip to the movies, the indoor trampoline park or buying a treat for the neighbor dog. Their money was often in cash and usually just sat in little bank envelopes in our cupboard. For a long time, their world was pretty small. We did school-at-home long before Covid, and they just didn’t have much use for money. Then a few things changed.  

The first thing that changed was attending school part-time. This lead to more friends, activities, and pretty soon there were birthday parties and athletic events to attend. My wife and I were funding these activities and we could approve or deny a specific request. A gallon of gummy bears, umm NO. A book for a friend’s birthday party gift, sure! It felt good to be in control! Soon the oldest started full-time high school. The activity level went up, and the money outflow went up too. As you all know with kids’ activities, they get expensive real fast! But still, my wife and I held on tight to the purse strings and had the veto power. Then the real change kicked in… my kids got jobs.

The first job was dog-sitting for the neighbors, and the second was a weekly cleaning job. All of a sudden they had money coming out of their ears! My first reaction was, “Hey, this is great!  There are all sorts of things they can start paying for themselves. I told my wife, “We should have them start buying their own groceries!” My wife gave me one of those looks, and I quickly agreed that was a silly idea. Tempting, but silly.

This influx of money changed the status quo. No longer did they ask Mom and Dad for permission. They just dug into their money envelope for anything they wanted. Trips to Dairy Queen ramped up, and I’ve found lots of candy and gum wrappers under my son’s bed. I had totally lost control of the purse strings!

I realized I needed to step up my fatherly duty and teach my children about the wider world of money. I have a longstanding saying that “kids need help making good decisions,” and that is especially true with money. Here are a few of the key things I’ve tried to teach my kids.

  1. Work equals money.
  2. There are three things you can do with money. Give, save, and spend.  You need to do some of all three.
  3. The best things are still free. Love, a walk, a hug, a nap, a homemade gift, a sentimental note.
  4. Money is a tool – not good or bad, just a tool.

Each of my children have reacted differently to having income. My son was startled at the speed with which his money was disappearing without anything to show for it. He endeavored to make a ‘money management’ binder where he tracks his income and spending on paper. I thought that was a great idea and encouraged him. 

My oldest has an additional summer job as a lifeguard. She has financial goals of her own, which include paying for school trip opportunities in high school. I helped her file her taxes for the first time this year, and she is showing prudence and wisdom in her handling of money.  I am encouraged.

The other two kids are pretty ambivalent right now. They like having money, but they need help making good decisions with it.

This whole process has been happening since the beginning of time, but it’s new for me. I don’t know that there are any big lessons for me in this other than life keeps changing, and I better change with it.  For my kids, however, it is their introduction to paid work and money. It is forming the basis of what they believe and how they will interact with money through their whole lives. I hope they have learned something good at home and learn something new about themselves in the process. Please feel free to pass this along to someone else you know who is approaching or going through the same thing. 

As always, we thank you for choosing Compass Financial! We just love to walk through the journey of life together with our clients and referrals. 

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