A Real Life Product of Two Parents’ Tough Financial Love

This post is from my friend Erin of BrokeMillennial.com. I asked her to share her story because it’s a great example of how giving your kids a little taste of the “real world” can help them grow into responsible adults. Take it away Erin! (P.S. I’m writing over at Erin’s site today too, so when you’re done reading this you can go check it out.)

At the tender age of seven I experienced my first financial smack down, dealt by the hand of my very own father. Unbeknownst to me at the time, this was simply one of many lessons my parents had in store for me that ultimately lead to my development as a financially literate millennial adult.

Money held a certain fascination for me, even before I truly understood the power of the almighty buck. I hatched a plot to capitalize on my childhood adorableness and little sister’s big, baby blues in order to get my hands on some dough.

On a hot North Carolina summer morning, I roused myself from my bed early on a Saturday to use my Mother’s yard sale to make a few of my own dollars. Using my little sister as free labor, we set up a Little Tikes picnic table stacked with Krispy Kreme doughnuts at the end of our driveway. As yard sale enthusiasts entered I politely asked if they’d like to buy a doughnut for fifty cents — a pretty decent mark up after my Dad bought a dozen for $4.

We hustled those grownups until our doughnuts sold out a little over an hour later. I proudly sat stacking my quarters and counting my earnings when my Dad appeared over my shoulder.

In the exchange that followed I received my first lesson in basic economics: net profit.

My Dad — who’d  purchased the doughnuts — had me pay him back for the money spent to buy the product and then pay my four-year-old sister for smiling and luring in customers.

This transaction didn’t go down easily and my face looked something like this:

But this simple lesson was only the beginning.

Require your children to have ownership in their toys

Not long after I started my doughnut stand did I begin dabbling in other money-making schemes, notably the pet-sitting industry. As I started to bring in pocket change, my parents began teaching me how to think through making a purchases and putting a value on my money.

When I’d ask my parents if I could have a certain toy the response would always be:

“Will you pay 50 percent?”

If I was willing to meet my parents halfway to purchase some Sea Monkeys, a Beanie Baby or some Pokemon cards, then I could get the item.

More often than not I’d carry the desired item around for a little while before returning it to the shelf as we approached checkout. This simple strategy taught me to curb impulse buying before I even needed my first training bra.

Make children earn and ask for their money

As I matured — and needed a “real bra” — I started to expand my pet sitting empire and even began to watch humans.

During my adolescence, my parents also began offering an allowance as payment for basic house chores. The catch being that my sister and I had to ask for allowance on Sunday nights. It wasn’t just handed over like most of my friends. If we forgot to ask — no allowance for us.

I quickly learned not only how to value my money, but how to start tracking my income. My Mother even gave us a tutorial in balancing a checkbook (mine had pretty clouds on the front) and to this day I have an obsession with crunching my numbers once a week.

Don’t pay for college (in full)

I get that parents want to pay for their children to go to college. They dread sending a child into the world crushed under the weight of student loans. While I abhor debt, I advocate that parents require children to have a financial stake in their educations.

Harkening back to my childhood years of paying 50 percent for a stuffed animal, my parents decided I’d be responsible for half my college education (even though they could afford to pay for me in full). My strategy then became to find a way to pay for my portion without draining my bank account. This lead me to aggressively applying for scholarships and trust me, there are some crazy ones out there.

Even though my parents required I pay for half my education, I still graduated debt free because I elected to go to the school where I received academic scholarships instead of picking the bigger name, expensive private school I originally planned on. By being an investor in my own education I was incredibly motivated to always attend class, perform well and graduate with honors in order to secure an ROI for my education.

“Real World”

Cut off.  It didn’t even need to be a conversation.

I knew without asking that my parents would in no way be supporting my post-college lifestyle. For that reason, I saved 50% of all my paychecks in college and graduated with a decent nest egg so I could fulfill my dream of moving to New York City. In June of 2011, I made that move on my own, without financial support from my parents.

Standing on my own two feet immediately after graduation may have been a bigger sense of accomplishment then my diploma.

Tough love is the best love

I knew — and still know — that should I ever need assistance I could go to my parents (for a loan of course). They are by no means heartless or scrooges, but simply used tough love to give me a precious gift: financial literacy.

I credit them for so much of my success in life and ability to thrive (especially financially) in one of the toughest and most expensive cities in the world.

Photos courtesy of Denise Krebs and GIPHY