We live in a society where we tend to think that the number of possessions we have determines our status, happiness, acceptance, and any other things that we think materialistic things add to our lives. The problems with these perceptions are that we end up being slaves to our own possessions and the reality is the things we spend our money on own us instead of us owning the possessions.
All of the external influences around us cause us to mismanage our money and lose sight of what it means to have money in the bank. Advertisers tempt us to open our wallets; magazines and the Internet make us feel like we have to project a certain image; and crafty marketers seduce us into believing we need something when we really don’t. All of these external forces cause us to think differently about how we handle our money.
So what can you do to help family members who have succumbed to society’s demand for materialistic things and have developed society’s evil for instant gratification?
1Start from the Top
Sound money management within your family must begin from the top with the parents as a role model. If one or both parents has poor money management skills it is time to recognize them and then change them. Children take their cues from their parents and if one or both parents are careless with money, the children will most likely be terrible at money management as a result.
2Set Money Management Goals
First, one or both parents should begin by setting their own money management goals. If one parent is having problems managing money then both parents should set a time to talk and decide on exactly what you are going to discuss. Instead of placing blame, be understanding and encourage each other to talk openly. If both parents are having trouble with money management as a result of their upbringing or other factors, there are a lot of money management specialists that are ready and willing to help you develop these skills.
3Difficult Situations and Money Management
As a parent, if you need to learn money management skills and are in a tight situation, take a look at what you have including all of the change that is hiding in the couch, your coat pockets, in the laundry room, etc., and collect it. Take stock of what is in your bank account. Decide on material things you don’t need and turn them into money.
Track your income and add up all of the pay stubs for a month to get a better understanding of what you bring in every month. Take a few weeks and track your spending habits to see where everything goes. After a few weeks of tracking you will find that you really do not need some of the things you are spending your money on.
Armed with this knowledge, come up with a plan for living within your means and make an agreement to stick with the plan. May it help you to know that even the poorest of people have been able to save a significant amount of money over a period of time because they set their mind to do so. Some invested as little as $1.00 at a time (less then a cup of coffee) into their savings and over a period of years ended up with a nice nest egg.
4Teaching Children About Money Management
As a parent, if you have a handle on financial matters then you can teach your children good money management skills. If children learn the value of money at an early age, you will teach them skills that they will use throughout their life. You can begin by teaching the difference between wants and needs and how to weigh the two when they are thinking about spending money. Also, show them how to compare the alternatives of spending money on a need and having money to spare and spending money on a want with no money left over.
You can also teach your children how to keep records and provide them with a clear idea of the bigger picture. For example, if they want to go to an amusement park, see that they understand that there is more than the cost of admission. They must also have money for gas, snacks, and other extras. Have them pay for the whole thing so that they learn how to always consider the big picture.
Also, include your children in financial decisions you make and allow them to witness your process of making financial decisions. This will help them to actually experience the process and they will also learn that money is a topic that can openly be talked about. You should also discuss the difference between money you earn and money you borrow as well as the danger of credit cards.
5Helping Loved Ones Who Have Financial Difficulties
If you have loved ones who constantly live beyond their means and have financial difficulties as a result, you can walk a really fine line when it comes to helping them out. While it is okay to help out your loved ones, it is important to establish some guidelines when you help them out. They may tell you that they are looking for a fresh start however, if you give too much, getting a fresh start will seem too easy for them and it will not be long before they fall into the same trap again. This is not really helping them. It is much better to encourage them with suggestions for resolving their financial difficulties to help them learn better money management skills.
On the other hand, if you see they are trying by cutting back on things like eating out, that $5.00 cup of latte every day, working a second job, or they are making other types of efforts, these family members will be less likely to get back into debt again and it will be more like helping them through a rainy day so to speak.
With family members who are terrible at managing money you must decide how much you should give and if you do, set specific guidelines. You can also offer to accompany your loved one to money management training if they are open to your suggestions or offer sound advice as to what you would do in the situation.
Another issue you should also be aware of is you may have family members who are careful with their money and if you give too much to the other members who live beyond their means, the other family members may feel like you are rewarding them for getting into trouble. In this case, you can make it a rule to give a little bit to everyone and make that clear to the loved ones who are in financial trouble because they live beyond their means.
If you are struggling to make ends meet for your own household, you must make it understood why you cannot help out another family member. Although they are your family and some members may get upset, if you are unable to do it you simply have to make it clear why and reiterate the fact that it has nothing to do with how you feel about your loved ones. If you cannot help them monetarily, immediately find some other way to help them out so they understand you meant what you said about your feelings for them.
6Relatives Who Give Money
If you have relatives that have money to spare and want to give, don’t be afraid to let them know some of the standards you have established in your household when it comes to money management. Insist that the relatives respect your wishes and don’t be afraid to confront them if they do not abide by your wishes. Come up with a plan that works in the event they want to give money to your children or other relatives in your household.
Money management can be a tricky business if you have some family members that are responsible and others who are not. The best way to handle this is to set a time to meet and have an open discussion about money and how each of you feels about spending money. Organize an agreement that everyone can live with and then stay consistent with it. If you do this in a manner that does not place blame on anyone and instead focuses on the issue, you can accomplish a lot when it comes to money management.
