A few days ago I had a conversation with a group of adults about parenting, decision making and responsibilities. The style of parenting varied, however, most agreed about disciplinary methods. The conversation quickly shifted to how parents taught money management to their children. There is no doubt the youth will have a rude awakening when they reach adulthood.
According to the parents, there were a few children who still engaged in chores, but most of the children simply requested money from their parents without exchange of tasks or responsibilities. Let me disclose the families were middle class, earning less than six figures. For the sake of exposing one parent true identity I will call him Jimmy Smith. Jimmy stated, “My kids do not have to save because they have me.” Jimmy is retired, married, lives on a fixed income and has adult children and small grandchildren.
Jimmy was proud to state that his family always looked toward him as the provider, but he never took the time to educate none of his generations how to manage money or discuss retirement. Jimmy was proud that his children and small grandchildren never saved the money that was given to them. The proof was in the stories as he explained how he wired money to his 32 year old son and wife because they were not able to make their paychecks stretch. They spent money before paying bills and were planning an extravagant vacation. Jimmy’s grandchildren were also spoiled. His adorable grandson once told him that he never had to worry about money because “it is in granddad’s pockets”.
Although it is an honor to provide for your family, it is even better when you can teach them how to live a life long after your days on earth. What exactly are we (parents) doing? Why is it that children have no concept of money, how to earn it and make it last?
As we were engaging in a long conversation with stories and pictures, I could not help but ask the question, “Are we raising a broke generation?” It seems that we are.
Let us put the conversation into perspective. If more parents continue to provide for their family in a way that lacks responsibility of self, then the generations to come will not have the concept of money. Instead they will believe that money is only a means to purchase their high end apparel, home, vehicle and vacations. In case you are not told— you must earn a living and save for what you want.
As a parent, the following is my concern. If we do not teach our child responsibility, what will happen to him at our demise? He will not have practical tools to make decisions, manage money and raise his own family. A broke generation practice behaviors that causes a broke mentality.
If you do not agree, have a discussion with a person from the Great Depression “depression baby” and a millennial. One will encourage you to save first, and then spend while the other will save a portion of what is left after spending.
Generation X and Millennials are always getting picked on when it comes to managing money. Millennials are always getting compared to Baby Boomers due to lack of financial responsibility and the boldness in the workplace. Millennials are now becoming synonymous to a debt lifestyle. More are moving back home with their parents while attempting to find ways to eradicate debt and save money.
If parents and schools taught the principles of saving and spending less than you earn, would millennials be in the financial predicament they are attempting to dig themselves out of today?
According to CNNMoney, “Four in 10 millennials say they are “overwhelmed” by their debt — nearly double the number of baby boomers who feel that way, according to a Wells Fargo survey of more than 1,600 millennials between 22 and 33 years old, and 1,500 baby boomers between 49 and 59 years old. To try to get out from underneath it, 47% said they spend at least half of their monthly paychecks on paying off their debts.”
Bad financial decisions will not only affect millennials, everyone will have to pay the price for their mistakes.
Bahiyah Shabazz is the President of Shabazz Management Group, Fabulous & Money Savvy and BROWN GIRLS DO INVE$T. She has appeared and given financial advice on various media outlets, and is the author of Women Building Wealth.