Sometimes doing something becomes so automatic that teaching it can feel unnecessary. Last night Kid1 and Kid3 were in the mood to bake something. I decided to do a little cleaning around the kitchen while working on dinner and the kids were cooking along side me. Kid1 and Kid3 were making molten lava cakes. I figured I would help if they needed it but trusted my first born to find a recipe and get to it.
I’ve baked for years, and it’s natural for me to take butter out to soften. I’m used to separating eggs, and I was aware enough to mention doing it in a separate bowl because a second bowl is more forgiving than a botched separation directly into your batter. I know that chocolate should be melted and tempering is a pain so I prefer cocoa powder. This was a new recipe that I’ve never tried and I trusted my kids to read and ask questions. These are my automatic practices, so I didn’t notice when a stick of butter went straight from the fridge into the Kitchenaid. I didn’t think about it when they broke up the chocolate bar and threw it into the bowl. (I had them use hot towels wrapped around the bowl as the mixer moved at a slow speed to soften and melt the mixture into a silken stream, but missed the moment when the flour dump made a mass of lumps. As they were measuring what should have been vanilla into the teaspoon, I smelled the root beer candy flavoring and we averted that flavor foul up, except my overreaction made him not add more when he probably should have. That white chocolate root beer combination would have been epic. My kids have been slowly cooking on their own but baking is new and Kid3 was so excited, he expected that you just throw it all in a bowl and into the oven. He rushes me and I slow him down but didn’t consider that Kid1 would need me to help him do that.
Mistakes were made. We course corrected. They were happy and loved their white chocolate and root beer molten lava cakes, and I gave them space, but should have offered more guidance. They were happy but it could have gone smoother. If anything it was a lesson in course correcting.
How we do anything is how we do everything and how I taught baking last night was how I learned and have been teaching finances.
Money Lessons
When I was a kid, I liked money. I could spend it and when I wanted something new, my mom had more for me. I watched her go to work, come home, and give me all she could. As I got older, I needed transportation and my mom helped me get used cars. No car note was a blessing, but I know more about driving dangerous cars than I care to. With my mom’s endless support, I have been able to scrape by. I’ve seen her do well, but we never had a sit-down talk about how to do what. You should learn that in high school, right? Right along with the Pythagorean Theorem.
Lessons about money when I was growing up were never really lessons. I saw my mom write checks and bundle her bills with a rubber band. I saw that if I wanted something, she used one of many cards or wrote a check. I never paid attention to what was a credit card, and what was a bank card. I always knew she had more than one checking account and more than one saving account and she was a joint owner on most of them. As I’m older and my mom could use support, I’m learning more about what she does by supporting her when she wants to use the internet to buy or sell her stocks . . . or helping her reset passwords. She’ll hand me the mortgage statement to go over what is still owed on the house I live in. But the lessons were never directly taught. I get to learn on my own. Like it is with baking, I get to experiment and find the flavors and methods that work best for me.
Learning by Doing
The year I turned 18, was the year I got my first credit card. By the time I was turning 19, I had over 20. Credit can be good. Really good. Credit scores can affect your ability to buy a house or car, finance a business or emergency, get a job or rent an apartment. Abusing the credit you are trusted with can be really bad too. Managing your credit shows you can live within your means. It shows that you fulfill your obligations. It says you can uphold a promise to pay. The more you do what you’re supposed to do with your credit, the more likely your credit improves and banks want to give you more of it.
When my marriage ended, I was determined to pay back my debts and take control of my banking life. I learned that there are checking accounts that will give me an average percentage yield for holding my money instead of charging me a fee. I was thrilled when I discovered changing banks would change my APY from 0.01% to 0.25%. That was big news and I was excited. I was shocked and amazed at all that www.bankrate.com wanted to teach me. I was balancing my check book every single day. For the first few months, I kept every single receipt and kept careful track of where I was spending my money whether it was cash, my debit card or credit. I wanted to see where every penny was going and where I was giving away money with bank fees I could avoid. I started my vision board and my lists and added things like “Roth IRA” and “Stock Mutual Funds with a dash of International Funds.” I started thinking about my kids and what happens when I’m gone. I don’t know if Kid2 will ever work and I’m not exactly pushing Kid1 into it. I’m trusting them and I’m proud of where they are, but I’m letting them guide me because I’m not the one that lives with autism. I’m looking into an Advanced Directive and Durable Power of Attorney for Healthcare.
I started reading the books my parents suggested as I was growing up. I paid attention to my late grandfather Erasmus’s advice: If you don’t have the money in the bank, you don’t need the junk. And while I know you’re not supposed to spend more than you earn, I admit it’s not easy and like most Americans, I’ve gone overboard. In 2015 the average American family owed $15,950 in credit card debt. I must point out it’s an old statistic because I’ve also read that millennials are beginning to stockpile their cash. This is a generation that’s aware that waiting for your pension and government retirement is not enough to live comfortably. I have kids that may need support for the rest of their lives.
In my marriage, we had a lot of credit card debt and it was never a priority to pay it off. didn’t make money decisions other than spending on what we needed as a family and my rebellious over spending because retail therapy is my thing.
It's Never Too Late To Course Correct
When I became single, I was determined to take control of my finances and pay back my debts. Don’t get me wrong, I fully accepted the legal protections that forgave 7-year-old debts. At the same time, paying back what I promised to pay became a matter of my integrity. It was important to me. It was hard. It took time. I set up payment plans and called if I knew a payment was going to be late. Even though I didn’t have a job for months, by the time I fell into a position that was full time but also temporary, I had improved my credit enough to be able to lease a car on my own. In my marriage, taking my name off the application improved our chances of getting a used vehicle, but here I was, driving off the lot without even making a down payment. I lost my job and still made those payments happen. I read Suze Orman’s book Women and Money. There was so much I learned and so much I can let go of. But it gave me a starting point.
For the first time since 1997, I’m in a full time, permanent position. That first full-time job was a student position and it didn’t offer benefits. After that, I was a full time non-union tv extra, with no benefits. Then I became a stay at home mom for 15 years. The benefits weren’t mine and they left when he did.
Over the last few years I had been working temp jobs. Just 3 months at my first gig, and my job ended. The next position was 8 months and there was no warning or even an opportunity to pack my things. The position after that, my term kept getting extended. I was in the running for a permanent position and they got notice for a hiring freeze. My position ended but I knew a week in advance which is the most notice I ever had. The next position was 3 days at a time, every so often but they were happy to offer references.
There were a lot of periods of unemployment and support from the county. There were times when I was really grateful for my credit cards because they provided meals and laundry detergent. They made it so my kids were never hungry when the EBT benefits ran out and I was eating fried eggs or canned tuna each night at dinner when I didn’t have custody. They were my emergency back up when I needed it. But now I get to focus out. A consistent check means setting up a budget. My first focus is paying down debt, but my next goal is investing in the future for myself and my children. I get to look beyond living pay check to pay check.
I get to start with paying down the debt I have. You want to keep your balance between 30%-50% of your credit limit. I’m practicing a debt roll up I learned in a financial literacy workshop I’ve been going to for the last few weeks. Rather than paying off your debt with the highest APR, you pay off the smallest debt, and take that same payment you were making and apply it to what you were already paying to the next lowest debt.
As I’m learning, my goals are shifting. I want a Life Insurance Plan to supplement the term policy my job provides. The payout they offer, and the additional one I pay into sounds nice, but ideally, there would be enough coverage that my kids could live off the interest in the same comfort I’m offering now. It’s just short of 2 years salary and if I ever leave, that policy doesn’t come with me.
I have steps and goals, and for the first time in a while, I feel like I can go forward. I feel confident with these steps. I feel empowered by making my lists and mapping out my goals and at the end of the day, that’s what I love about taking control of my finances. At the same time I know that all I’m learning must be taught to my boys and I get to teach them. As soon as they’re emotionally ready, we’re opening teen checking accounts and going over goals and plans. It won’t be easy, but it’s something I can offer while they’re young enough that their mistakes won’t make them go hungry.