DD3 = Dear Third Daughter
Attempts to inspire my 13-year-old to save
Three years ago, I wrote (in a post entitled “Debt, DD3, and Justin Bieber” – DD3 was in love with him at the time) about my struggles in trying to inspire our then 13-year-old daughter to save. “DD3 gets a monthly clothing allowance from us, and in our efforts to teach healthy money habits, we’ve imposed some policy on her management of this allowance. 20% goes into a savings account . . . ‘What am I going to use the money in the bank for?’ she asked when we first started this system. I hesitated because I didn’t have a good answer. Would she blow it all on a car some day? Was she to use it to supplement the funds we’ll have saved for college or university? Or were her savings to be for an even longer-term purpose? For a house? For retirement? Retirement! She’s not even in high school yet. Isn’t that ridiculous? I still don’t know.”
DD3 had mixed success in maintaining her savings while she received an allowance. Without a compelling “Why?” she didn’t have much motivation. Her goals were always very immediate. A concert ticket. Shopping for clothes. A friend’s birthday gift. She developed good habits in managing these expenses, but long term savings just didn’t fit with her world. They felt like an imposed and useless tax on her small income.
16-years-old with a part-time job
This past August, at 16-years-old, she started to work her first part-time job in the deli of a grocery store within walking distance of our house. I remember the day she received her first pay. I was looking forward to advising her about putting some amount aside in her savings account – maybe 50%? I knew that she was planning to buy clothes before school started, but I wanted to steer her clear of blowing it all. Before I could ask her anything about it, she told me, “I made $4o0! I put half of it right into my savings account.” I was SO proud!
But I wondered how she would manage her savings in the weeks and months ahead. DD3 has friends who spend their money at dizzying rates. Clothes, movies, meals out, make-up, concerts, more clothes . . . Unless she had a real “Why?” for her savings, it would become very tempting for her to blow what she earned. I talked to her about saving up for her first car. I talked to her about our savings for her post-secondary education and how they wouldn’t cover everything. She understood, but I could tell it was just head knowledge.
An inspiring “Why?”
Last week, DD3 let me know that she’d gone to a meeting at school. “It was for the Europe trip,” she told me. Every second year, a few history teachers at her school organize a “Tour of Remembrance” which includes stops in The Netherlands, Belgium, and France. The next trip will take place in April of 2017, so students have a year and a half to prepare. Some have parents who will pay the whole bill. Others will go half and half with mom and dad. DD3 didn’t even need to ask. With her parents in the fourth year of their journey out of debt, she knew that it would all be on her if she went. Estimated cost? $3,200.
How do I want my daughter to see personal finances?
She seemed tentative as she spoke to me about it. “You can do it!” I said to her. “You’ve got eighteen months to save up what you need.” DD3 was surprised at my response. “I thought you would be mad,” she said. “Why did you think that?” I asked. “Because it’s not something I need,” she explained. “And we don’t go on family vacations, so why would you want me to go on this trip?” As my husband and I have been working our way towards debt-freedom, I’m afraid we’ve conveyed the idea that wise money management means a nose-to-the-grindstone kind of life.
I want her to go on this trip because it lights a fire of interest in her. It promises adventure for her. It gives her a significant opportunity to exercise her power of choice. It will grow her confidence. It will give her an enticing “Why?” for her “long-term” savings.
When I was 16 years old, I had no concept of the distant future. I couldn’t see beyond high school. And although I am convinced that parents need to instill the habit of saving in their children, I believe that we have to be realistic in our approach to it. A 13-year-old can put allowance money aside for a movie. But for his/her first car? Maybe that works for some, but not everyone. A 16-year-old can’t necessarily conceive of the expenses involved in post-secondary education, but she can definitely get excited about a school trip. And if the 13-year-old can save for a movie – if the 16-year-old can save for a trip – then the young adult will have the training to save for whatever new goals inspire.
I want my daughter to look upon money as a tool that will help her to shape the life that she longs to live. I want her to develop the basic skills and habits that will allow her to manage her finances well. I want her to be aware of the traps of marketed dissatisfaction; of envy and keeping up with the Jonses; of unconscious, reactive spending on impulse; of buying as self-medication; of debt. And I want her to know what it is that she truly values, so that she can direct her resources in a meaningful way.
Right now, she values this school trip – which will be supervised and involve learning. How can I complain about that?
“I’m going to start saving 70% of what I make,” she told me this evening. When the “Why?” is compelling, a teenager will step up.
Were you good at saving as a child or teen? Do you find that you need a compelling “Why?” to motivate you to save? Your comments are welcome.