This letter is in response to Think Money's challenge, which asks bloggers 'what's the most important lesson to teach your kids about money'. I could write about pocket money or popping pennies in piggy banks or earning cash by doing extra chores, but I'm not. Instead, I'm going to tell you about how being sensible with money changed our family's life and demonstrate to you by example why it is so important to never ignore your financial responsibility and to always think forward to your future.
Fifteen years ago, we lived in a housing association flat. I hope that those of you old enough don't remember much about this time of our lives. Living below us were the local drug dealers with their barking dogs, furniture-shaking loud music and neverending procession of friends who visited at all hours, loudly proclaiming their arrival with the shouting of obscenities. Although we did what we could to make our flat homely and welcoming, the fear, noise and intimidation stopped our 'home' being a happy one. We made a decision to get ourselves out for the sake of you - our amazing children who deserved so much better.
Your dad wasn't earning much in his job at a warehouse, money was incredibly tight and we knew we had to earn more and save more if we wanted to better ourselves. So your dad went to night school to get himself some professional qualifications in ICT. Once qualified, he went on to get a job working shifts for a telecoms company that earned enough for us to be able to afford a mortgage on a semi-detached house further up north, where properties were much cheaper than where we were living in Hampshire. We saved hard, cutting our outgoings down to the barest minimum. A few months later I moved into our new house with you kids while your dad continued to work down south. He worked around his shifts, commuting between Shropshire and Hampshire which was grueling. But we all coped, even though dad would sometimes fall asleep during his dinner because he was so exhausted.
Eventually he found a new job in Birmingham that paid more than his shift work. The twice daily 60 mile trip down the M6 was made on a motorbike for years as it saved on travel expenses. Some days your dad would get home so cold that he would have frost on his eyelashes, but we carried on. We continued to save every spare penny and as dad's pay increased we were just able to afford a new four bedroomed detatched house on a brand new estate. That was eight years ago.
Now we have a lovely home and a comfortable life, where I am afforded the luxury of being a stay at home mum, financially supported by your dad, so I can be at the beck and call of you kids. I feel incredibly blessed. But I remember the journey we have been on to get to this point. It wasn't easy and we worked hard to get to where we are now. Every penny we earned was spent wisely and with thought. We never ever went into debt, going without rather than overspending. We saved our way out of our predicament and bettered our lives by working together as a team with the same goal in mind.
If there is one piece of simple advice I can give you, it is to always think before you spend. I have brought you up to respect the value of things and to appreciate the cost of living. So don't go into anything blindly...just stop and think and reason.
Try and save, even if it is just a little bit each month. Work hard and get some money behind you. You've had your own bank accounts since you were babies, so put them to good use! I want you to have nice things but not to be wasteful with your hard earned cash. Buying those designer clothes might make you feel flash but there are cheaper alternatives that look just as lovely. Those new release computer games are very tempting, but couldn't you wait a little while longer and buy it secondhand after it's been out for a while? Avoid impulse buys. Always ask yourself...do I actually need it or do I just want it? If you don't need it, set yourself a time frame to save up for it. After you have the money, maybe you will realise that you would rather have that cash in the bank as savings. If not and you decide that you do really want the item, at least it is all paid for and you will appreciate its value all the more. Avoid the debt trap because it can create a devastating spiral that is so difficult to escape from. Material possessions really won't make you as happy in the short term, as making a good life for yourself will in the long run. Honestly.
Set aside money for bills every month so you don't get behind with essential payments. Always make sure you know what's in your account so you don't end up short. Being aware of incomings and outcomings is essential to successful budgeting. Write it all down and calculate what goes in and out so you can take control. (Some accounts such as the thinkmoney personal account do this for you to help you manage your cash by setting aside money for regular commitments leaving you access only to what's left.)
Takeaways and eating out should be saved for special occasions, home cooking is so much cheaper and cooking something delicious feels so satisfying. Shop wisely, looking out for the special offer staple items in store. Plan healthy meal ideas on a budget. Have fun eating well for less. Try the Value labels - some are surprisingly good! We wouldn't be where we are now if we had wasted our money on fancy food. We lived on 3p Tesco Value Baked Beans and eeked out our value mince with grated potatoes. But it was an adventure!
I hope you will all have happy successful lives, but unless we win the Euromillions or you become a best-selling author or Premier League footballer, you will need to think about your financial future carefully. Think about where your dad and I started out from and know that you have the power in your hands to manage your money successfully and make every penny count. Don't look at this as a negative thing, embark on it as a great adventure! So when you are saving money on your insurance policies by using cashback and comparison websites, or whilst you cut your weekly expenditure by shopping at Aldi, smile to yourself and remember that every penny saved is an investment in tomorrow! Good luck!
This is my entry into the Children's Financial Advice Competition with www.thinkmoney.co.uk.