Deirdre was late for our initial appointment. She’s a single mom of a 10-year old, trying to make it all work. As we start our conversation, Deirdre concedes that she is beside herself with the negative feelings she has about her financial situation. She berates herself for being “irresponsible” with her money. On the one hand, Deirdre feels she knows realistically the steps she needs to take to make things better. Yet, in the next breath Deirdre admits that no matter what her good intentions are, she is lost, and she cannot seem to fulfill the commitment she has repeatedly made to herself to actually deal with her “out of control” money issues.
When Deirdre gets to the heart of the matter, it turns out that she is really not in such bad financial shape. The internal beating she is giving herself is far more damaging, in my mind, than how the actual numbers look.
Deirdre has a small mortgage, current student loan debt, and a few thousand dollars of credit card debt. She is managing her household, her job responsibilities, and doing some paid consulting on the side. But at the end of the day, she is living paycheck to paycheck and has no emergency fund. Deirdre is never quite able to reduce her credit card debt because while she pays off more than the minimum every month, she seems to recharge about the same amount she has paid down in any given month.
Deirdre told me right off the bat that she knows eating dinners out with her daughter is a large factor in this equation. During an average week, including time for homework and household chores, the easiest and most effective use of her time is to pick up a precooked meal or simply enjoy a restaurant experience with her daughter. In her head she knows spending money this way is counter-productive, but Deirdre simply cannot figure out how not to sabotage herself and get ahead, while keeping her sanity and satisfying her basic needs.
Deirdre also tells me that she and her daughter, Meg, are weekend travel explorers. They research and find new places to discover together. The two map out unusual and meaningful excursions that provide for magical time together. Deirdre does not want to give up those weekends and the joy and memories she is creating with Meg.
So, while conceptually Deirdre recognizes that her resources and time are limited, she is conflicted in how to address her “need” to live her life and support Meg in meaningful ways.
It makes sense that when we are not taught something, we don’t know how to manage it instinctually. I impress upon Deirdre that her financial situation does not define her, she is awesome. She is juggling a full load and the fact that her finances may be slightly derailed does not make her irresponsible or lacking in any way. Rather, she needs a few money lessons.
First and foremost, Deirdre needs to bring her daughter into the equation, instead of trying to “protect her” by carrying the money burden alone.
This is a teachable moment. What would happen if Deirdre sat Meg down and actually showed Meg the money details? What if the two talked about how to maximize the income that Deirdre works so hard to earn? If mother and daughter (buddies to the core) put pen to paper and analyzed all of the income and all of the expenses, might that take some of the pressure off Deirdre? What impact would that have on Meg?
It was as if a light had been turned on. Deirdre immediately knew that being honest with Meg would reduce the stress she has been carrying and give Meg a literal understanding of how far (or not far) their actual money can go.
We discussed that Deirdre would explain to Meg the basic and necessary costs of their daily living. At 10-years old, Meg is completely capable of understanding the math involved. Mom earns this much and after paying all the bills (and saving some), there is a limited amount (if any) left over for the fun stuff. At that point if there is “disposable” money it can be allocated for their joint adventures. Thus, together they can decide whether to save that money for their next Mommy and Me weekend, or they can decide to use it to eat dinner out one night a week.
The key here is that when faced with the choice of “just charging” another weekend away or dinner out, now Deirdre can say to Meg, “if we want to get to Kalamazoo, we are going to have to be committed to fewer dinners out and a few more meals cooked at home.”
Managing (and saving) money is tough. It is not innate and it does not come without practice. If Deirdre and Meg can together work to understand money and how to maximize it and live within their means, the lesson for both will be invaluable and lifelong.
As parents, we must take on the responsibility of teaching our kids about money. If they only learn from watching you, without hearing you tell them the actual money lesson, they may have no idea how money works and then they will be forced to figure it out by trial and error – maybe just like you did.
A lot of kids believe that you can buy them that new pair of shoes because they know you have that plastic card in your wallet. Others believe you can just walk up to an ATM machine and get money for “free.” Children are extremely bright and resilient, and they will be delighted to be included on your team when making “grown up” decisions about money and about how to achieve joint goals.
When I spoke with Deirdre exactly one month later, it was as if she were a new woman. She and Meg took my suggestion and the results have been amazing. To Deirdre’s surprise, Meg has real talent in the kitchen and she is enjoying experimenting with her mother. And now when they go shopping, Meg does not ask for extras. Instead she loves to look at the different prices of items and does her own comparison shopping. And, she is good at it!
Are you willing to try this at home with your “Little Me”?
I’m a debt settlement and bankruptcy attorney who negotiates resolutions between clients and their creditors. I am also a real estate attorney involved in both sides of purchasing and selling distressed real property. I am passionate about teaching people about money and helping individuals of all ages achieve financial independence and success in a "no…
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