by Eilleen
Hello everyone,
I was talking to someone a few months ago and he asked me "if you don't tie pocket money to chores, then how will your kids ever learn that money needs to be earned?" (see here for my approach to pocket money) We ended up having a long rambling conversation about income and what it means to be financially "rich" or "poor".
Now on the subject of kids learning that money needs to be earned.....To be honest, I actually don't think this is an issue. I believe that its more important to impart the love of work for its personal and social benefits rather than the income it can bring. I believe that one should work because it makes one feel good and allows one to participate more effectively in their community. I think if you love to work, then you will get an income...and the level of income should not be an indicator of whether you are "rich" or "poor".
I think what defines "rich" or "poor" is not so much the level of income but the level of spending.*
I have been "rich" when I had less debt and a very clear commitment to my goals. I was rich when I was still at school on a casual wage and I wanted to buy a TV, VCR and stereo. I was rich when I was on minimum wage, living realistically within my budget, whilst saving up for a deposit on a house. I am rich now as a sole income earner for my family, with very clear priorities for my spending and savings whilst resisting the urge to accept offers from the bank to borrow more so I can have things now.
I have been "poor" when I had too much debt and no idea what to spend my money on. I was poor when I earned higher than the national average income and I got two credit cards with high limits. I was poor when I was promoted to an "executive" and I got myself into debt in order to live up to what I thought was the lifestyle that was expected of me. I was poor when I wanted things "now" rather saving up for them.
So for me, rich or poor doesn't have anything to do with what I was earning but had everything to do with my commitment to spend wisely in order to achieve greater goals.
What about you? Have you experienced "rich" and "poor"?
15 comments:
i have certainly experienced rich and poor...my first real job i really learned what poor felt like! i had to pay all my expenses and really learnt to budget, because my wage was so small that after paying all my living expenses i literally had $30 a week left to spend on food! i learned to cook cheaply- that's for sure! and i very rarely got to go anywhere that cost money!
however, earning that money really made me appreciate it and made me also appreciate my parents (and what they had done for me as well)...
i understand your philosophy on pocket money (and everyone is completely entitled their own choices!!)- but i'm definitely in your friend's camp... my children will be working for their "pocket" money because i think it's one of the best ways to teach them about how the world works... i think it actually enhances the whole "Learning to spend your money wisely" lessons you teach your children... as it gives them more respect for money in the first place...
I'll second that, Eilleen :)
I agree that earning how to spend wisely is the key to being rich or poor. I was once poor when I first left home and spent three quarters of my income on my rent. It was not a fancy apartment, and it certainly wasn't close to work! I was poor when I'd put everything I had into my house and racked up thirty grand in debt. I knew I'd eventually get it all back (and I did, and then some) but I was living hand to mouth, making minimum payments on my credit cards and worried that I'd lose my house. But I've been 'rich' now for awhile, and feel safe, even though I'm unemployed, because I have money saved.
I also tend to agree that kids need to learn how to spend wisely, and save money first, but I'm not sure that earning money doing chores is the right way to go. A family is a community, and in order to live in community, everybody needs to pitch in and do their part, even if it's just folding the laundry or keeping their rooms clean. Money can be earned doing special projects, like painting the living room, or sanding bare wood chairs before Dad glues them together and finishes them.
What a great post!
To me, poor = insecure. I haven't been poor in a long, long time. We were "comfortable" for a long time and now we're, frankly, rich in exactly the definition you're using.
But to me "poor" is that place where basic needs and obligations are not quite covered, so every little thing that goes wrong is a disaster - doctor's visits can't be made when you're sick, transportation can't be repaired or replaced, rent might not get paid. It doesn't have to be debt, but debt payments will push you right into it - that feeling of terror at the abyss right under your feet.
Great post. I actually forwarded this to my mom who was telling me about a friend who commented on someone "doing really well" upon seeing their car, home, etc...
What a bunch of hoopla!
Love it Eilleen! So succintly said. :D
Great post! I recently did a post for helping guides kids to learn the importance of money, savings and giving back. Check it out! Melanie givebacktoday.blogspot.com
Thanks Eilleen for a great post! I've never really thought about "rich" and "poor" in that way before but it makes perfect sense. We have just moved from the city to live in a caravan on a beautiful property and now have to rely much more on what Mother Nature provides for us rather than how much money we have...and we couldn't be happier or feel "richer"!
We don't connect the pocket money and the chores. Our kids get pocket money so that they learn about saving and spending, and do chores because they're members of the family and that's just what we do. I remember hearing somewhere that if you tie pocket money to chores, you're potentially going to hit a point (probably the preteen or teen years) when one of your kids says that he or she would just rather not do the chores because they don't want the pocket money that badly. So we don't connect the two. We have the kids save 10%, put aside 10% for charitable causes, and the other 80% is theirs to save or spend-- they quickly learn that they can fritter it away or delay the gratification and save up for something good. So far, so good. :)
I think household chores (such as cleaning their room, washing up, putting away clothes) should just be done, because that's what being part of a family is part of. But if children want to earn some pocket money they could do extra chores, such as washing the car, helping in the garden etc (or whatever the parent deems as an extra chore). That way if they elect to not do the extra chores, they earn no money. But, IMO, children should never be allowed to "opt out" of household chores. At least they're not allowed to in my house!
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I'm totally in agreement with separating chores from pocket money. Chores are part of "being a family"
Everyone needs to learn about money as we will all eventually have some, rich or poor, so let your kids learn it's lessons early and they won't get in such big trouble later.
I can see both sides of the argument, but I interpreted your friends point as meaning children need to know that money won't just appear every week when they're older rather than teaching them that money is the ultimate goal in life.
Dinah
I agree with you. I think everyone has experienced and still experiencing both. Being poor is when your debts is greater than your savings. Borrowing money from a payday loan company when you need to buy thing ahead of time is definitely fine, as long as you are willing to pay 'em back on time. It is advisable to settle your liabilities as soon as possible. As for the children, they should be taught on how to spend money wisely by showing 'em how responsible you are as spender as well.
Thank you everyone for sharing your thoughts and experiences!
Rosa - you are so right. I too have experienced poor in the way you have described. I had just moved out of my parent's house and 60% of my wage went towards rent. There were times (thankfully few) when I called in to work "sick" because I couldn't afford the bus fare due to some bill or other cropping up. I learned my lesson and realised that I wasn't earning enough to be living out of home and thankfully I was lucky that I could move back in to my parents.
Anyway, all of your comments have gotten me thinking about "work". Off to think about it further now...
THANK YOU!
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