Teenage Money Date Night, Part III: Judgment Free Coaching

I began “Teenage Money Date Nights” when Oliver’s brakes went out and I realized that I let her buy a 10-year old car without teaching her to immediately begin saving for repairs. Bad mom. Bad financial coach. I needed to immediately step up my efforts to teach her two of the most important things we all need to know: how to budget and how to save for predictable, but nonrecurring expenses.

Once a month we set ourselves an appointment and went to dinner at the super-cool Bows & Arrows cafe. We'd hang out afterward to have little working sessions. Being at Bows & Arrows set the stage for fun. Note to the parents out there: choosing a place that served wine was also a plus.

Date Night #1 was rough. Frankly, I wasn't too sure what I was going to teach her. I've taught tons of people, but I've never taught a teenager. I knew that lecturing wouldn’t help much; she was already getting lame “financial literacy” education at school. I knew what she really needed was what many of my clients need, someone to do the work alongside them and ask them the right questions. Ooooh, that’s what I needed to do, treat her like a client.

First task with a client: see them as a hero. I learned from Master Coach Maria Nemeth to always see the good in your clients, to know that they are on a mission in life and that it is your sole purpose to support them, to the best of your ability, on that mission. So when I decided to fashion our Teenage Money Date Nights like a client meeting, I knew I’d have to see Oliver as the hero she is. Which meant I had to set all judgments aside, even the ones about her buying ridiculously frivolous things and even the ones when she didn’t send her savings away like she said she would. It was not my job to judge; it was only my job to teach. 

It was hard; really, really hard. But luckily I listened to the little voice in my head that kept saying, “treat her like a client, treat her like a client.” That first meeting was the hardest. I think we were both nervous, didn't know what to expect and emotions were charged. By the end of the night, I could see that there were judgments hanging thick in the air, but interestingly none of them were mine. By the time Oliver had sketched her spending plan together and realized that it didn't work, she was upset and berating herself. I didn't need to; she was doing a good enough job herself.

My job became being the impartial teacher:

• “Well, how far off is your budget?”
• "Are there any spending categories you want to shave a bit off of?” 
• “Is there any way to earn a bit more money?” 
• “What would the risk be if you saved a little less for car repairs?”
• “How close are you now?”

My job became being the truth telling cheerleader:

• “Honey, many people's budgets are out of balance.”
• “You're doing the next right thing by looking at it and calculating it.”
• “If you keep doing this work, you'll get it in balance. It just takes a while.”
• “Don't beat yourself up.”

My job became being the leader: 

• “I think we've done enough for now. Let's work on it again next month.”
• “I don't think we're going to come up with a final solution tonight, and that’s ok.”

I didn't push her for a workable solution. I knew it was time to walk away and come back to it before emotions got crazy out of hand. And I knew that she’d find the right solution on her own; clients eventually do. I taught her an important lesson I’ve learned, that there are few financial emergencies. Most financial issues, if dealt with consistently (and preferably in advance) have several potential solutions.

I showed up to that first meeting thinking I was going to be teaching her about money, but in the end I realized that it was just a little bit about the money. Mostly I was simply serving as a Sherpa, helping her navigate through her own ascent into the world and emotions of money.

-Stacey Powell

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Teaching Your Teenager about Money: Part II

Last year I walked my kid through buying her first car. She wasn’t responsible for the cost of the car; she had some special savings that had been put away , but we did make her responsible for putting together a Quick Spending Plan before she got the car, and made it clear that she was going to be responsible for registration, a third of the insurance, general maintenance and all gas beyond the $70 monthly stipend we’re throwing in. If you’re old enough to drive a car, you’re old enough to do research on the cost of insurance for different types of cars, the mpg of the cars you’re considering, the estimated cost of gas and the cost of registration. 

The result, she chose a reasonable 10-year old starter car that costs her $200 a month (and only costs me $150); she put an earning plan in place to increase her $650 monthly income; she suffered through DMV; she is now officially a car owner and understands the costs that come with car ownership.

And then an interesting thing happened: her excess earning plan fell through. Instead of being upset about it, or railing about the unfairness of her plan not working, she moved right on to Plan B. Because she had put the plans together, she knew immediately what her hole was going to be, the unfunded part of her plan. And she immediately set about making a new Earning Plan. And that’s the value of teaching your kids about money. You've not given them a fish but instead taught them how to fish. She solved her own problem.

But wait, that wasn't the end of the lessons. The next lesson was for her, and for me too. As it goes with 10 year old cars, 3 months into owning the car she had a major repair. She discovered her brakes were worn down to the rotors. Total cost: $400. Ouch. A $400 car repair is a hard hit to many adults, and to a high school senior, well, ouch.

This is where my lesson came in. I wanted to rescue her. I didn't want it to hurt so bad. I felt horrible for her. I remember sitting at my desk that day staring out at the window and I just kept telling myself that the right thing to do is to let her weather this. It wasn't just the money; it happened on her way out of town for a holiday weekend at the beach with her friends. She had to turn around and come home. She had to wait to get the car fixed by a mechanic friend who could do it a little less expensive.

She was so sad. And I wanted to make it better.

In the end, I steeled myself and let her deplete her saving to repair the car, as hard as it was. It was a great lesson for me. I saw it as a fork in the road: I could be the kind of mom that financially rescued my (almost) adult child, or I could be the kind of mom that taught her to rescue herself. I scheduled our first "Teenage Money Date Night." We went to a favorite cafe, and I started teaching her about her overall spending plan and the importance of "savings silos." We calculated how much she should put in savings every month for car repair, because a 10 year old car will need repairs. I sure wish my dad had done that with me.

Oh, and I also gave her $50. Not for the car, but so she could have a "staycation" that weekend she and her friends were stuck in Sacramento while the rest of their friends were camping on a Mendocino beach. She felt a little better, and so did I.

- Stacey Powell

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 

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Teaching Your Teenager about Money: Part I

This is an intermittent series on the foibles and successes of teaching my kid about money.

Here’s the truth. I did a horrible job of teaching my child about money. If you read "Telling the Truth", you know I’ve come to this work because I teach what I needed to learn. And when my kid was young, I’d pay her allowance sometimes, and then I wouldn’t. Sometimes it was because I forgot; but sometimes it was because I didn’t have $10. Or I thought I didn’t. And I never clarified what the allowance was for, because I had mixed feelings about the purpose of an allowance. [Note: Big mistake! Always be clear about what allowance is for. If it’s just because they’re a part of the family, be clear about that too. Tell them why you’re giving them money, or what it is they’re earning it for.] My mixed feelings led to vagueness and inconsistency. I gave her young formative mind so many mixed messages about money; I did it all wrong.

As she reached her teen years, I began feeling pressure to make up for lost time. I needed to teach her as much as I could, as fast as I could, to somehow make up for the years I didn’t have it together, and I needed to do it before she left for college.

How do you teach a teenager about money? Imperfectly. I started a few years ago by sharing our household spending plan. I’m sure she glossed over the dull areas like Shelter and Transportation, but I’m also sure she was the only kid in her class that knew exactly how much she had to spend on clothes and entertainment every month. She knew that every July we’d lay low on movies and art supplies, our typical entertainment expenditures, because our fabulous State Fair was happening, an event that we happily spent the entire months’ budget on.

I shared, but not too much. I began to weave in numbers where appropriate “well, it’s the end of the month, so we only have $80 left in our food budget for the month,” or “we haven’t been clothes shopping for a while, so I think you have $105 to spend.” She didn’t always need to know the numbers, but I think it made her feel a part of some of the mechanics of how our household worked, financially. And where possible, I’d include her in decisions. If we wanted extra money to buy more fun stuff at the State Fair, we made a joint decision about how much to borrow from September’s entertainment budget.

And, if she learned nothing else from my proactively sharing our household spending plan, she learned that it’s ok to talk about money. That it’s just a normal conversation; a part of everyday life.

Stay tuned for Part II  - Coming August 15

- Stacey Powell

Finance Gym offers personal finance coaching in professionally facilitated peer-advisory groups. 

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