I’m a sucker for tradition. Actually, I am a fan of nostalgia – things that make you warm and gooey and bring you back to the days of your youth. When it comes to issues of personal finance, however, nothing I was taught (even the more “traditional” lessons) really panned out for me. While I’m a big believer in balancing the budget, following the law, and doing your share, I won’t teach my kids money lessons that are popular simply because they are old. Here are a few examples of lessons that are still being handed down from generation to generation – but that really need to stop.
“Be a Company Man”
There are two problems with this lesson. First, there are no company “men”. Just as many women are pulling down a fair wage in today’s economy, and the occasional guy who spouts this lesson may also still think “women shouldn’t be in the workplace”. The second issue I have with this is becoming more obvious in this current economy. Companies try to take care of workers, but they can only do so much. Be a family man. Be a man of truth. Be a funny man. But don’t ever base your identity solely on the corporation who signs your checks.
“Always Pay with Cash”
This can be a terrible piece of advice that assumes we live in a one-size-fits-all world. It is also nearly impossible to abide by. If you use water, gas, or electricity that costs more per month than the deposit you put down when you opened your account, you are using credit. Unless you waltz in with a wad of cash and tell your utilities manager that you would like to only use the amount you prepay every month, you are “charging” your bill for a short time.
Most should avoid credit until they have developed the ability to use it responsibly. (You may also want to apply for a credit card but put it in a freezer for the time being in order to build your credit profile.) But let’s call a spade a spade, shall we? This adage should never be given to your kids without a lengthy lesson on credit. It would be better if it were changed to “pay with cash if you aren’t good for your word of paying back the things you buy with credit.” You may also add in “credit rocks if you are good with your budget and like earning perks for the shopping you do anyway.”
“Don’t Spend it All in One Place”
This is one that many of us still hear. The thought behind it is that if you “blow” all your money on one purchase, you won’t have it for other things. But don’t we already know that? Similar to the “play the field” advice for relationships, it can discourage kids from setting, planning for, and committing to a financial goal so that they can one day buy a large purchase that would otherwise be unattainable. So yes, “spend it all in one place” – if that’s what it takes to make that mega purchase of a home, car, or college tuition.
“Time is Money”
Yikes! To some extent this is a true statement. If I burn minutes and hours waiting for a doctor that is late for my appointment, and I’m missing time in the office earning a paycheck, then time is money. If I’m spending a day off from work (unpaid even) to visit my sick aunt in the hospital or to witness my daughter’s first volleyball tournament, then this is very simplistic thinking.
I can always earn more money, but I can never get the precious moments of life back. Most people can always spare more time for important things. Be sure that when teaching this to your kids, you are qualifying the value of time in units other than cash. You only get one life, and you can take none of your belongings with you when you die. (Both are traditional lessons that parents should be passing on to their kids!)
What lessons did you hear growing up that should be revised? Or maybe it should be left in the past altogether?
Btw, there's a pretty nifty tool that motivates your kids to do chores. It's called MyJobChart.com. With a free account, they can earn points for finishing jobs you assign them, good towards free merchandise. Give it a try. It's completely free!