Take Control of Your Family's Finances

Tuesday, February 9, 2010
Posted by Pearl

What is it that makes kids force parents to go into debt for the latest techie phones, or the newest gadget? And why do parents give in?

Lead by Example

Going into debt or spending over one's means for toys or brand names in shoes, clothes, and accessories are a common thing nowadays. A leading bank reports a whopping 17% of loans go unpaid. A friend shared recently that he was surprised to see his secretary, who earns a modest income and supports two kids, with a new MP3 player, that she sheepishly admitted, she got through credit card.

So, how indeed, can we minimize our kids' (and our own) attraction to what is in, what is new, what is hip, and especially if it means going into debt to get it?

We simply pass on to our family the values we know and practice ourselves. If we teach them that persons are more important than possessions, and truly believe it, then laughing together at the dinner table is much more entertaining than eating while facing a huge flat-screened TV set Daddy just bought with his new credit card.

Here are six rules we can live by:

1. The purpose of family is "to grow people". With this in mind, when making tough decisions on whether yet another pair of rubber shoes is needed or not, ask oneself, "Will this help my son or daughter grow into a better person?" As a parent, usually know the answer.

2. Reward big goals with big-ticket items. Whether it's good grades, good behavior, or consistently great work at home and in school. Emphasize that you are saving for the item, so that there is a sense of value in the reward.

3. Don't espouse total deprivation. I tell my kids we split on the item; I pay 50% and the rest comes from their allowance. Usually, there is a pregnant pause after this statement, and an "Oh well, never mind, Mom. It's not so important."

4. Work on your own bad spending habits. You've heard it before. If you have too many credit cards, cut some up, literally. You will feel a liberating peace, much like that of sleeping without clothes between sheets.

5. Set goals together. If you want to go to Hongkong or the US as a family, you'll need to save a lot of cash for that, especially if you have more than one child. Remember, it's not only the tickets and the accommodation, it's the theme park entrance fees, the food and drink, the rental cars, the shopping you have to budget for!

6. Work on your and your kid's self-worth and self-esteem. Look into your own issues. Did your parents use gifts and toys to buy your love? Do you really need that expensive suit to look successful? Did you grow up deprived and not want your kids to ever be that way? Surprise. It's not so bad to be deprived when growing up. There is that impetus to do more, and to succeed where others give up.

Family Affair

Stewardship, simplicity and sharing: words we seldom hear these days. These are the activities of a happy, healthy family. Are they easy to practice? Yes, easier than we believe. Remember, you are growing people. Your kids are putty in your hand. But most of all, don't forget, they are God's putty, not yours. Impose His values on them and you won't go wrong.

Involve the kids in your saving and spending rituals: shopping, depositing money, budgeting. Take them to work to let them see how hard you slave at it. But usually, it starts with saying "No" to that bag that calls your name from the shop window, as it whispers gently to you, "use your card, zero interest, pay later."

Pay later? No. If you really have to, pay now, and pay in cash. That's the final lesson to teach your kids and yourself in our never-ending battle against debt and the temptations of this material world.