Friday, February 26, 2016

Ways I Cheap Out and Blame It on My Parents

Recently, I was doing some reminiscing with Mr. Frugal Rock and was waxing romantic (rambling) about my childhood when I mentioned something that my family did that I thought was totally (or mostly) a funny quirk about 80's and 90's families- like everyone wearing the same clothes in family pictures, or the desire for beanie babies. Some weird items must have been in the water that made us all go collectively crazy about these things... BUT it turns out it was just a funny, frugal quirk about MY family. Frugality was a household norm when I was a kid, and it's not a surprise that this imprinted on me (Thanks mom and dad!!). 

What happened to all the
beanie babies? Does everyone have
a hidden stash in their attic? Is there
a beanie graveyard somewhere?
I love me some research and I have been noticing more studies lately about kids and how they learn about money- both the good and the bad, and how it impacts behavior. Research has begun, unsurprisingly, to demonstrate that high debt loads of parents shows a correlation with poor child development and behavioral concerns. A recent paper, documented that this appears to be the case with what the study called 'unsecured' debt, or credit card debts (as opposed to home/student loans). Families who had a lot of credit card related debt, presumably have higher stress levels, which can result in impact on their children. This could be due to a lot of reasons- maybe parents with higher debt loads, are also working multiple jobs resulting in more time away from their families- but either way, the important take away is that money habits, even debt load, impacts children more than we think!

From looking online, it appears that more research can be done on the positive role of parental behavior on teaching kids about $$. While there are a lot of 'curriculum' ideas of activities to do with your kids around money, my gut is that it's the day-to-day interactions and behaviors that will help the most in teaching kids to be frugal adults!

While the Frugal Rock household, doesn't have any Frugal Pebbles (kiddos), I did round up my favorite financial lessons from my childhood of ways I learned about money- without knowing I was learning about money.

1. Avoiding Entitlement Traps

My parents would take us to the budget night at the theater ($2 Tuesdays, ya'll), but my siblings and I learned early that we would have to smuggle in cans of soda/candy if you wanted a snack. I learned fast that a sweat shirt held more soda cans, and that you should always wait until the movie started to pop the top (of the soda can that is). I still have been known to bring snacks to the theatre on the rare occasion Mr. Frugal and I go to the movies, much to his embarrassment probably. #noshame

Now I'm not advocating that you teach your kids to smuggle contraband or that you begin too, however there is value in teaching kids that just because something is available, doesn't mean they have to have it. This is true, even if you can afford it. Delaying gratification is a great life skill, no matter the age! We learned early to shop for deals, go on nights when events are more affordable, and that buying in bulk was cheaper than buying individually. A lot of lessons in one evening of family fun.

2. Saving is NOT optional

Birthday money? Graduation gifts? Christmas money from the grandparents? All great things, but there was a rule for as long as I can remember that 1/2 of the money was mine to do what I saw fit. I could spend all of it at the dollar store or candy store if my little heart desired but the other half went to my savings account. Non-negotiable- from birth through my teenage years. Even if it was $20, $10 went into the bank. Until I started doing the research for this post- I never realized how much of my personal finance skills was learned behavior! While the Frugal Rock Household is not at a 50% savings rate (see this post on our retirement savings habits if you're curious) but it's still a goal that I have. A common trend among early retirement folks is the high savings rates of 50%+ so I hope to move more in that direction.

3. Re-use: The Art of Hand Me Downs

My parents were into re-using before it was a trend. They really sold us on the fact that hand-me downs were cool and that they could save you money. I'm not sure how they convinced us of this- maybe it was the idea that all three of my sisters and I would pool all of our clothes in the same closet or that we got to 'shop' each others dresses for different events. Shoes and accessories could be purchased, but my parents would give us a deal- we could re-wear an already bought dress (often originally bought for over a $100) and they would pass along part of the savings of not needing to buy a new dress to us often about $40. If we declined, they were willing to take us out and purchase a new one, but no extra spending money for you! I distinctly remember wearing the hand-me down or thrift-ed dress and pocketing the cash.
In hindsight, this was a perfect strategy not only to keep the clothing costs of three teenage females in check, but it also taught a great lesson in the value of re-using what you already have. By passing along some of the savings, it made the benefit more real to us. To this day, I am much more likely to shop my closet when I have a big event coming up. I find myself looking forward to the challenge of whether I can pair something I already own in a new way, rather than purchasing something new.

So how do you teach your own family about finances? Looking back are there any money skills you learned without even realizing it?

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