Smallsteps has realized that being away on vacation is fun and it costs. We have tried to be open with money considerations with her, but also not worry her with some of the more difficult discussions yet. Our early relationship with money likely dictates a lot of our future financial wellbeing or struggle and a scarcity mindset is difficult to shake. At least it is for me.
I say "is" because like an addiction, once an addict, always an addict.
For me, financial struggle has dominated the majority of my life and the very real cost of opportunity lost has been felt. Like many, financial scarcity means making a decision between two poor choices, and hoping for the best - which rarely happens.
Just like the worst.
Preparing for the worst or close to means being covered if it comes to pass, but also having allowance for when it doesn't, which is usually the case. If that "extra" is used wisely, it could offer financial empowerment, but the fact is, most people who are struggling, don't make great financial decisions, in the same way that an addict doesn't make good decisions either.
Getting into unnecessary debt to purchase a desire, or stealing from loved ones - to fulfil a desire. Similar, aren't they? They are both about making a decision to take am opportunity that probably shouldn't be taken, yet is. Under the duress of want satisfaction, we rarely act well, or in our long time self-interest. We get what we want now - at the expense of our future position.
I don't think any addict wants to be so, nor do I think an addict wants to purposely hurt their loved ones, in the same way that I don't think anyone wants to be in debt. Yet, that pull of the want can be incredibly strong.
And, the line of credit is attractive.
And the more it is used, the more it will be used, until the limit is reached and the tap closed. Then, withdrawals set in, because the lifestyle that was being lived, is no longer possible, because it was never sustainable - always running on a line of credit of some sort - from a bank or the stolen jewelry of a parent.
While it seems so easy for some, the fact is that under certain circumstances, most will fail to make good financial decisions, once they are in a position of struggle. Starting from that point and watching parents make mistake after mistake, doesn't help lost of us learn and instead, sets up almost unbreakable patterns, because before we can break them, we have to improve our conditions, but our habits are making that incredibly hard.
A catch-22
Even if broken, like an addict, it is easy to fall back off the wagon. Just when you think you have control, one drop and it all comes crashing down again, old habits kick in like they never left.
For some of us, no matter how much money we receive, it will continue to pass through our fingers like water. We keep dipping in, scoop after scoop until there is nothing left, and then into minus. I know people who have burned through more money than I will likely see in my lifetime and now, they struggle to pay their utilities, let alone take a vacation. Their "good times" were amazingly good, like the ultimate high, but the crash on the other side has left them with memories of opportunity wasted and bitterness, not gold.
It is important to make memories we can cherish, but we also have to think about the life we live each day and the impact the cost will have on it. How much is a memory worth and does it pay off the future struggle and continual debt burden?
When we think we deserve to splurge, do we also deserve the ramifications of our decisions?
I think this is where we are currently focusing some our parenting attention for Smallsteps, the consequences of decisions she makes. Sometimes, it is that she says she doesn't want something but then (like children do) changes her mind ten minutes later, but it is too late, the decision has been made. It isn't always possible to go back and choose again and understanding that many decisions lead us down restrictive paths, with each taking options off the table, we can start to feel the oppression - self-inflicted oppression of our own making.
A lot of the decisions I have made in my life have felt forced, because they were made from positions of not having enough to do as I please, so it is a compromise. Compromise is good, but when it is affecting whether we go to a specialist doctor or not, it is painful, and the ramifications can be severe.
The chronic illness I have now, was misdiagnosed by a general doctor when I was 16, because y mother couldn't afford to go to a better one - one who would have likely sent me to a specialist, which she couldn't afford either. It was "easier" for her to feel she was doing something, even though it was not the right thing to do. But at that age and in the condition I was, I had little choice in the matter, and have been living with the consequences ever since.
There are lots of variables in this world and it makes decision making difficult, but at the end of the day, we are the only ones who have to live our lives, so learning how to make the best choices we can, at least gives us the comfort that we did our best, even if we failed. Passivity is also a choice, then we just feel like victims of circumstance - even though we had a say in the outcome.
Do we keep scooping, or do we fill up the hold?
Taraz
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That line about picking from two bad choices and hoping for the best. Really hits with me this morning. I know that feeling all too well. I had a misdiagnosis a short time agom luckily they caught it in time, but the mild outrage was still there.
Hopefully whatever you did end up with, you are okay. Sometimes they diagnose worse than it is, sometimes they underdiagnose, as in my case.
In my case they treated it like hit was an infection when really it was cancer. It want until I got a new primary care physician that they caught it.
I feel this more and more as I see prices in New York City hit mind boggling numbers. I just don't work hard enough / make enough money to survive here long term and it is frustrating that maybe I should have done more (like you said) with opportunities I had when I was younger. I chose the fleeting memories every time.
Do you ever consider moving? I wonder if that is a thing these days where people are moving out of the more expensive cities to somewhere cheaper - especially with remote work as an option.
The last bull should have secured me. Instead, I am pretty much where I was...
I think about moving all the time. I left New York City in 2009 a year into my first marriage and spent 10 years away in some pretty great US cities like Austin, TX; Denver, CO; and Phoenix, AZ. But it is hard to turn your back on family when your presence is needed, so hopefully after my lease is up August 2024, I will be in a much better position to move away.
As much as I go on about cost of living and the high price of everything, there is still a lot I love about the city including my access to some of the best nightclubs in the world, amazing museums and art collections, and the vibrancy of a diverse mix of creatives and urbanites all together. The one time I tried relocating to a smaller, quieter town an hour outside of a major city, I got kinda bored kinda quickly. Tbh though, I think that said more about my inability to entertain myself than anything, so I'm hopeful it will work out the next time I try it.
I can say that financial challanges have dominated my life since the early ages, 10s. I had to study hard and change the course of my life, and I did. However, due to the my poor financial decisions in last few years where there has been hyperinflation, I have been not able to buy a house despite working for years.
I hope I will improve my financial situation through HIVE :)
Looking back, it is easy to see what we could have done differently - I should be a millionaire too. But, it isn't easy as "buy Bitcoin" 10 years ago. And even if we did, would we have held?
Something like land or house, we might have hold.
Responsibilities of life won't cause an issue, when we start making plans at early stage, though most parents seems to support their children focusing more on studies.
Having a vacation isn't a bad idea at all, but considering the fact that things might be too shaky, when we pull out some certain funds from our savings, makes us want to seat up tight and make plans.
The idea of spending or borrowing to spend in what does n't yield profit, is an automatic threat that can cause a big issue to someones financial life.
How much have studies changed over the last 50 years and how much have employment needs? They have said that soft skills are lacking in the younger generations, and that is what will be in demand. Financial management is actually a soft skill, especially with the grouped emotional needs of it.
I love the kinds of conversations you are having with small steps. She would be able to spend and save money. She will be financially wise and educated... and I'm also glad that you are not telling her the difficult part of it yet. When the time comes, she would know but she must have been having some ideas about them...
That's a good training
I am hoping that she will be educated in the right things - but it is hard to say at this point whether she will apply them well. Fingers crossed :)
It is difficult to know what children will take away from the lessons we teach them. My son has made fantastic decisions about education, job choices, and saving and investing.
My daughter is the exact opposite and is in debt up to her eyeballs.
Yet they both grew up side by side. When I look at my son I feel as if I did everything right, and then my daughter is walking proof that I failed somewhere along the way!
Do you ever consider what the difference between them is? It is is interesting to note (anecdotally) that men seem to take far more interest in finance than women.
People usually fare poorly in making financial decisions. It is for this reason that traditional financial institutions thrive. The majority succumbed to the cycle of poverty and it would take a great effort to break free from this bondage. Most usually prefer immediate gratification. Everyone wants everything fast and sometimes sacrificing the future. I think what we need is discipline and the courage to withhold instant gratification for the sake of a promising future. I am glad that I belong to this community where I learn more and grow more. All the best! #hhguild #teamph
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And the discipline comes naturally for some,, but is a struggle for others. Unfortunately, there isn't an on/off switch for these things. Would be much easier if we could pizza menu our lives sometimes.
It is possible to learn to make investments from an early age, they are small steps that are taken; it is possible, however, to be an expert in financial operations and to make mistakes in the decisions taken. This is how third parties will see it, they are not mistakes due to lack of knowledge, it is simply the financial environment and its multiple variables to be considered.
My seven-year-old son Matthew has learned to save. The allowance he receives from his maternal grandparents he manages very well, he asks me how much this or that costs and estimates the possibility of acquiring it, if necessary, with two or three allowances.
I don't consider spending money on holidays to be a waste, for me it is a healthy investment. We must enjoy the short life, let's remember that time flies by, we are mortals who at any moment will leave, abandon the ship and take nothing with us...
The financial environment is set up for those who already have finances. So, to really take advantage, a person is going to have to learn ways to build that base, if they aren't born with it. My daughter will hopefully have something to start with, even if it isn't much. But if she doesn't have the skills on how to maintain and grow it, it will be flitted away.
Starting monetary awareness early is one of the best things that parents can do for their kids wellbeing, as it helps them grow independence and confidence in later life.
Why are you getting downvoted?
Cynically speaking, he is an obsessive-compulsive lover who I didn't pay 4 years ago because of a misunderstanding on Discord and every time he remembers he visits me. Twice I have gone over 60, but he and his little group, who consider themselves the authority in the hive, have affected me by knocking me down to 40 margins. I openly called them immoral, corrupt and leeches, who benefit financially, making life a funnel for others....
I couldn't agree more, everything is a choice. Passivity while also a choice is probably the worst one anyone can make. Sorry to hear about your condition, and misdiagnosis can be a problem with primary care sadly. But she did what she thought was right and could afford. Every choice you make in life leads to where we are now whether or not they were good ones. While we can't fix the past we can make the future better!
I agree. It is disempowering - but gives the sense that someone else is to blame.
Reminds me of a friend of mine. He had some kind of work related injury when he was in his late 40s. I don't know the details, but his company offered him a lot of money plus early retirement. I don't know how these things work in Japan, so I don't know if that's a common thing or not. Anyway, instead of investing wisely and making the money last, he blew through it all within a few years and then had to go out and get another job. (A dead end job at a convenience store)
Then there was MC Hammer... I wonder if he still works as a used car salesman.
I struggle with this with my oldest all the time... I'm forever trying to teach if you delay making a decision, that is a decision and likely one that causes you to miss both options that you were indecisive about.
Seems common. Easy come, easy go - pain to follow.
Amazing isn't it! How can that happen, from having your initials on golden gates in belair to nothing.
If you find a good way to ease the struggle, let me know :)
Today my son was learning the multiplication table. Every time he answered my question correctly, he received coins. 6 times 4, that's right, keep 24 coins. My son and I often touch on financial topics :)
I am not sure how old your son is, but I would be broke in no time playing that game!! :D
))
It's tough and it's too bad that you got a misdiagnose when you were a child. When I was a kid, I didn't get any allowance even when most kids around me did. I found that it was hard and I think it's hard to really do much. Things are better now and it has lead me to think about my finances more. There are good and bad sides to most things.
Allowance? What is that? :D
I think it is a good way to start teaching kids, though it has to be in exchange for something they wouldn't normally have to do, I think.
Yea. I think it's a good way to teach them and I agree that making them work for it is a good way to teach them that it has value.
Financial Management is an incredible skill to have and something that keeps changing as you get older and financial situations change. I think one of the first steps is to acknowledge your relationship with money and know what kind of money person you are. Only then you can slowly figure out what next steps to do.
I am not trying to spruik this book, but the Barefoot Investor is a decent read especially if you are looking for some guidance around planning and some psychology behind it. I am a believer in out of sight, out of mind especially when it comes to saving. So I do split my money into buckets and have my savings in a separate bank so that it takes effort to get it. The time and effort lets you re-evaluate if you really need to touch your savings.
This is something that the gurus don't seem to address - they say "what to do" but it has to be cross-referenced with who you are also.
I have heard that book is good - a best seller in oz I think.
I actually got that acknowledging your relationship with money part from like a reality show on Netflix.....lol. How to get Rich, not a fan of the title, but it does share some interesting tidbits.
There is no one size fits all method to money management, but for the math/formula nerds.
Assuming all things constant, Revenue > Cost = Winning. Revenue < Cost = Good luck.
Now click & upvote me to pay for my advice.....hahaha
One thing that is rarely thought of by many is how do you handle expenses that arise, or things that you want, that are greater than just a few paychecks? One of the hardest practices is to indebt yourself to an imaginary recurring bill that has not materialized. I take 10% of any monies I receive and place that money in my savings account. For the most part, that money get's used for auto maintenance costs, but it could be designated as a build up to pay for any large debt that paychecks cannot cover on their own. For example, saving up for a new car, home or for a vacation. Everyone should start a tithe savings, if you will, to put money away for something unforeseen, or, unattainable within your pay structure.
I think it is good to build an emergency slush fund, then have the discipline not to use it. I ,also think that it is worth it to keep building that way into investments once there is enough in there, or alongside it.
we should learn more about financial management from asian cultures like vietnam, they really know to work hard and how to prepare for old age and family matters.
I think we should limit our expectations and needs of life according to money that matters alot.
When we keep ourselves in limit, we will spend our lives more happily.
Amazing post, financial security is a mindset...
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That's pretty tragic dude and I guess it really shows the inequality between different people based on how much money they have in the bank.
That inequality is greater still in some really poor countries, where many will never see a doctor of any description.
What I do find interesting though is that many in these poorer societies can actually be healthier than affluent countries as they don't eat junk food or processed foods. Everything is made from scratch with raw base foods.
On the subject of financial mgmt it's great to instill some knowledge in them at a young age like you are doing with little steps. That's great parenting in my opinion. Life skills are up there with education as a fundamental building block of a solid person.
I would rather have not had than had and lost a fortune as I appreciate what I have as this has not been a free ride. Struggling is what we do and the decisions we make are limited due to having fewer choices. I know when and if fortunes one day arrive they will be appreciated and not wasted like many tend to do. I need a holiday as well, but that wont be happening for a good few years yet. teaching our children the value of money is the biggest lesson we can teach them as just looking around it is obvious this has been neglected by our generations.
I find it really interesting how this article ultimately emphasizes the importance of making informed decisions, considering the long-term implications, and taking responsibility for the outcomes of our choices.
It highlights the power of proactive decision-making and the role it plays in shaping our lives.
We as individuals should be mindful of our financial decisions and aim to strive for a balanced approach that considers both present enjoyment and future well-being.