shame of the middle class (and why teach kids about money)

By now you may have read either the original Atlantic article on The Secret Shame of Middle-Class Americans, or read a response to it.

The article was fascinating to me, and so were the comments.

It seems that most people fall squarely into two types: they lambasted the author for his stupid financial choices (he cashed out retirement to pay for his daughter’s fancy wedding, chose to live in the most expensive zip code in the country, kept his finances secret from his wife, etc), or they blamed something entirely outside his control (the economy, the government, illegal immigrants, yadda yadda).

I’m not an expert on the economy. Many people claim that middle-class Americans have higher costs of living and that wages are stagnating. I don’t know if that’s true or not, but what I do know is that I have no control over all that, so why waste my energy on it?

What I DO have control over is how I earn (for the most part) and spend.

(If you do a quick Ctrl+F of the article, you’ll find the word “budget” doesn’t appear, which is quite telling!)

Whether cost of living is higher or not I don’t know, but I DO know that we have higher expectations of what’s normal and expected. We’ve come to view as “needs” that which most of the world, and our parents, viewed as “wants”.

One tiny example: central air conditioning.

My husband spent most of his childhood in the Florida Keys, and I spent mine in Georgia. Hot, humid climes to say the least. And yet both of us remember quite well living in houses with no air conditioning. Somehow we had happy childhoods and survived  – but our kids will never know what it’s like to sleep with windows open at night, use the sprinkler, or wet one’s hair in the shower for relief from the heat. My family can afford to pay $400 a month for electricity in the summer, and so we do.

I’m no Luddite, and I enjoy my laptop and cell phone as much as anyone for the entertainment and productivity (and income) they provide, but I didn’t get a cell phone until I was an adult. My 10 year old has a tablet, my 13 year old an iPod, my teenage sons multiple laptops, desktops and phones.

I had a charmed childhood in many ways and never wanted for anything, but I also had no expectations that when my parents picked up a coffee to go before a road trip that I would get a fancy hot beverage! (I created that monster with my kids, not lyin’.)

The term is lifestyle creep.  

I’ll try to get to my point before I write another 1,000 words on this topic, because I’m passionate about it.

I talk to my kids every day about money matters.

I talk to them about my past mistakes with money, and my successes. I use other people’s example, items on the news and any other excuse to talk about this essential topic.

We could whine all day about the economy, complain that schools don’t teach money management, or blame capitalism and the marketing machine and such.

OR

… we can get busy educating ourselves and our kids about money. 

I don’t want my kids to experience the pain that comes from making unwise decisions with money. So I teach them that debt makes you a slave, that not having an emergency fund is not an option once you’re earning money, that cars are things you save and pay cash for, and that money is not for spending but for managing. Also important? Learning to delay gratification and saying no to self temporarily in order to win long-term (something that, sadly, today’s Americans aren’t great at doing).

So far the message is sticking.

As an example, my 17 year old is apparently better off than nearly 40% of Americans because he could get his hands on $400 if he had an emergency. All he would have to do is withdraw it from his emergency fund, something I told him to set up when he got his first job.

My aim here is not to brag, because I’ve made mistakes with money in the past.  I was once in debt. I got out after reading a free library book, putting my nose to the grindstone and working hard to attack it. And I was a single mom at the time earning between $1,200- 3,000 a month, with 4 kids to feed.

When I married my husband, we took Financial Peace University together because we didn’t want to repeat the mistakes we had both made in our first marriages with money. We paid off $80,000 of debt in basically one income. We pay cash for our cars. We budget and make financial goals.

I hear some people make the excuse that they didn’t “come from money”, so they didn’t learn how to manage it/invest it/earn it. I came from a solidly middle-class family, but I was able to learn from my parents, who kept their life simple, valued spiritual things and family more than stuff. I also learned that self-employment, as long as you set money aside to pay your taxes, was generally smarter than employment.

Most of what I’ve learned about money and taught my kids came from the liberal use of my library card.

What did you think about the Atlantic article, and how are you teaching your kids about personal finance?