Category Archives: Rant

Should you pay your wife an allowance?

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I get all sorts of email. I get emails about debt. I get emails about how to ask for a raise. I once even had a Nigerian prince offer to share his family fortune with me. Despite the fact that I opened an account and emailed him the account number, I never heard back from him. But I digress. My point? It takes quite a bit of craziness for an email to get my attention.

My eyes are wide open

Dear Pete

Hey. I love your podcast. It cracks me up. You said you take emails, so I thought I’d give it a shot. I’ve got a problem. My wife spends too much money. It might cost us our marriage…unless you can help. Hahaha. No pressure. I’m the only one that works. She stays at home with our two kids. I make really good money (nearly $120,000 in 2011). But we never can get ahead. Between us, we have over $85,000 in student loans, $30,000 in credit card debt, $40,000 debt on my M-Class Benz, and my wife has a major spending problem. It’s got to stop. She makes no money, but wants to spend all of my salary on clothes, and random stuff for the kids. She’s at Target like twice per week. Between the medication for our son, and the piano lessons for our daughter, she spends like $50 per week right there. If I was doing the buying at our house, we wouldn’t be in the position we are in now. We fight so much on the weekends, that I end up leaving the house and playing golf just so we dont fight for 5 hours. What do you suggest I do? 

My buddy thinks that I should put her on an allowance system. I’m thinking about doing it. Have you ever heard of somethings like this? It sounds crazy, but I really think it could work. For instance, if she cooks five meals in the week, then I’d give her $100 to spend. If she vacuums and dusts, then I would give her another $50. I’m thinking she just needs to earn her keep more so that she’ll value money. What’s a fair price for chores? I figure it’s much cheaper than a divorce. Hahaha. Things are just nuts around here. My college buddies are going on a guy’s weekend, and I can’t even go because the cards are maxed out because of her stupid Target trips. Sorry, I’m just venting. Thanks, man. I’m interested to see what you have to say.

Jeff

Jeff, thanks for your email. I’m afraid that I’m fresh out of candy-coating today. Therefore you are simply faced with the unadulterated truth.

I’m really worried about you. You’re pissed that your wife spends too much on your kid’s medication? I would sell all four of my limbs for my kid’s medication. I wouldn’t golf the rest of my life to pay for my kid’s medication. And your daughter’s piano lessons are a problem too? You’re not supposed to feel that way. I generally don’t make a practice of telling people how they should feel, but you shouldn’t resent your children’s medication and/or music lessons.

Anyone that would think/write the things that you thought/wrote clearly doesn’t have a strong grip on reality. I don’t know where you come from, but where I come from my buddies call me out for being an a-hole. They don’t tell me ways to be more of an a-hole. If you have the sort of friends that recommend that you put your wife on an allowance, then get new friends. Your wife isn’t the problem. Your attitude is the problem.

Here’s what I suggest you do. Take a week’s vacation. Given your salary of $120,000 per year, I figure you have the sort of job that allows you to take a paid vacation. Send your wife out of town to stay with a friend for the week, and then do her job for seven whole days. What you will find is that you are lucky that you currently aren’t divorced. My guess is that you will find that your wife doesn’t spend nearly as much as you think she does. She simply spends the money that it takes to run a household…without the (non-financial) support of her husband.

Jeff, I’m really concerned for you and your family. To be frank (as though I haven’t been), this is the worst situation I have ever seen. You need counseling. I highly recommend that you seek professional help. Dude, seriously? You care more about guy’s weekend than your kid’s medication. You have got to man up. You are going to ruin your kids’ lives. All they will ever know is dysfunction if you don’t get help. This is serious. I don’t have any financial advice for you at all. I’m just really sad. You don’t have any true friends that are pushing you to be a better person, and unless this email strikes a chord, then I’m afraid things will have to completely blow up before there is a resolution. Please change.

****Update #1****

This post has caused quite the uproar. I’d like to clarify a few points. First, I didn’t address the financials in the question, because I don’t think the answers would actually help him. In my professional opinion, although he has significant financial problems, his primary issue has nothing to do with money. I chose to treat the problem, not the symptoms.  In addition, the advice is so obvious, that I didn’t think it was worth writing. Alas, here it is: Jeff shouldn’t be driving a $40k Mercedes. He should be driving something paid for or something with a very cheap payment. The payment on his Benz is most likely astronomical. If he were to do this, the savings should then be used to pay down his credit card debt. He and his wife should sit down and work out a budget together using Pete the Planner’s Ideal Household Budget. Any other financial advice would be purely speculative. I don’t know his credit card and student loan interest rates. I don’t know if he has an emergency fund, though I doubt he does. And I don’t know how much they spend per month on their mortgage. My educated guess is that it’s a significant part of their income.

I’m not above criticism. When I write advice or give advice that is poor, then please ask for clarification or correction. I will gladly admit when I am wrong. However, in my opinion Jeff was looking for help. He thought his problem dealt with money. I disagreed, and wanted him to see that his family was at risk. Keep calm and carry on.

 

Why you need to avoid student loans

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How to Avoid Student Loans: wishtv.com

This video caused quite the ruckus today. It inspired an angry email. My point is very very simple: avoid student loans. Get your education, but avoid student loans. I give a few examples of how to do this within the above video. There are many defenders of the importance of an education. I am stepping up to defend your financial future, in relation to your education. Learn what I’m saying, and then decrease the cost of your education. There really isn’t anything to disagree with. Read the book and decide for yourself.

Emailer wants to repair credit to buy a house again

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Last week was a HUGE week at PeteThePlanner.com. Cision ranked me as the fourth most influential personal finance expert in the nation. I get a tremendous amount of email from people all over the country. It’s one of my favorite parts of my job. The emails are always VERY REAL questions. They are specific, heartfelt, and quite vulnerable. And I always think there’s something to be learned from everyone of them. We may not have the same problem (as the emailer), but many of us have the same spirit. We’ve made mistakes, we want a do over, and we want to to stop stressing out over money. We just want our lives back. The email below is the perfect example.

Hi Pete

I’ll start by saying my wife and I have made some pretty terrible financial choices and need to do a much, much better job. We were not taught financial responsibility and while we tried (not with the best effort or result) to fake it we’ve fallen into some of the cliché traps you’d expect. We used credit irresponsibly in our 20′s resulting in a bankruptcy in 2002. We tried to right the ship but my wife lost her job and we had late payments, a few collections and even a judgment or two over the last several years. We’ve ignored debts/collections and I’m tired of living with my head in the sand. We’ve entered into a lease-to-own contract for a home we would very much like to purchase, we have until April 2013 to obtain financing and I know we are going to need to build credit to be able to obtain the loan.

Pete – I guess what I’m saying is, I need help. I’ve dug myself a hole and I need help getting out of it. I’m willing to put in the effort and make sacrifices as necessary but I need that experience and additional push that a professional can provide. We need advice on how to build credit and do credit repair. We currently lease-to-own our home and outside of what I’d call our day-to-day living expenses, we have roughly $7000.00 in debt. The debt is a 2 personal loans and 1 collection account. We have no credit cards or auto loans at this time. I’m certain we need to do better with our monthly spending. We do eat out vs. grocery shop far too often, but for the most part I think a look at our lifestyle costs (internet, cell phones, etc.) need to be looked at and maybe slimmed down

Where do I start? Can you recommend a legit credit counseling service? You hear about so many of these places causing more harm than good. I just don’t know what to do to break the cycle and escape from this terrible financial position. I want to be secure; I want to be able to know I can obtain a mortgage and provide for my family. This is no one’s fault but my own, I know this, and I’m ready to change.

I am sorry my email is all over the place. It appears this email has become part confession and part plea for help.

C.E

Do you sense the stress? Its palpable, isn’t it? There’s so much here to address: technical issues, philosophical issues, and behavioral issues. I’m not saying this guy is screwed. I’m just saying that most financial problems stem from both technical and philosophical shortcomings. We’ll address these issues separately. I needed more info to answer the questions so I emailed this person and learned the following: $60,000 household income, he has a 401k at work but no other savings, his current rent payment is $925 per month.

This is a very involved question. I will deal with parts of his question today, and then the credit building stuff tomorrow. Deal?

Technical Issues

C.E. is currently in no position to buy a house. He is not a homeownership candidate. Unfortunately for him, someone might actually loan him money next year. The absolute worst conclusion to his story would be for him to buy the house next April. Based on the income numbers he provided me, C.E.’s take-home pay is about $3500 per month. That means that his rent payment is 26% of his take-home pay. All other things being equal, 26% of income going towards housing would be acceptable per Pete the Planner’s Ideal Household Budget. However, the rest of his financial profile suggests struggle. He’s struggling.

A prospective homeowner should have 10% of the value of the home they are purchasing as a down payment AND an emergency fund on top of that. C.E. currently has zero dollars saved, has debts in collections, and owes personal loans. All of these characteristics are the opposite of a prospective homeowner. This doesn’t make him stupid or dumb. It just makes him mislead. He is mislead that homeownership will solve his financial problems.

Philosophical Issues

Peer-pressure is a mamma jamma. It can cause some weird decisions. The overriding social philosophy of Americans that homeownership is the best way to go, is quite strange. I kinda get it, I’ve personally felt that way in the past, but given what’s happened in the last five years in the housing market, I can’t understand why anyone would be in a hurry to jump back in.

C.E. mentioned two personal loans that also need to be repaid. I can’t, under any circumstance, given the information above, recommend that C.E. pursuit homeownership in April 2013. He mentioned that he and his wife have made several bad decisions. I believe that this is primarily due to philosophical issues.

Tomorrow we will continue this conversation by giving credit rebuilding tips and I’ll give you my perspective on credi counseling.

An open letter to parents of high school students

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Greetings. I’m Pete. You may or may not be a regular reader of my work. Either way, welcome to my little spot on the internet. My role in the financial world is pretty simple: protect people from themselves. Your job, as a parent of a high school student, is to help that student make the best decisions during some of the most vital years of their lives.

There is no bigger decision than trying to decide what to do after high school. I hope that you have highlighted the importance of higher education to your student. A post-secondary degree CAN open doors for them. The operative word here is CAN. And this is where our conversation needs to begin. An education does not guarantee employment. An education does not guarantee ambition. An education, the cost of an education to be exact, can actually ruin your young adult’s financial life.

If our relationship just started (if you are a new reader), then chances are I just angered you within minutes of you learning of my existence. For this, I’m not sorry. If you let your student blindly buy an expensive college education, then shame on you. No seriously, shame on you. I’m not suggesting that you should pay for their education. Nor am I suggesting that you have failed in any way, shape, or form if you have failed to save for their education. In fact, you may actually feel guilty if you have not pre-funded their education. I can’t make those feelings go away. It is what it is. But DO NOT, under any circumstance, dig a deeper hole by allowing your student to mortgage their financial future via student loans. And for that matter, you should not take out loans for their education either.

The solution IS NOT to forego post-secondary education. The solution IS to lessen the cost of said education. The $75,000 question is: how in the heck do you do this? Very strategically. More on this in a moment. But first, let’s chat a bit more about student loans.

There is a popular sentiment circulating that suggests a student should never take out more total student loans than what their first year salary will pay them upon graduation. As an example, let’s say their first year salary upon graduation is $40,000. If they were to follow this popular suggestion, then they would feel comfortable taking student loans up to $40,000. Based on a 5% interest rate and a ten year payback period, upon graduation their student loan payment would be $424.26 per month. That is 17% of their take-home pay in their first year. That is completely unacceptable. They don’t have to put themselves through this. Yet, according to the statistics, over 70% of private school graduates may be faced with this very situation. Say no to all of this garbage. Help your student AVOID STUDENT LOANS altogether. There’s a better a way. There’s a smarter way. And you are about to learn it. Don’t let them ruin the first 10 years of their lives after graduation paying for something that they didn’t need to borrow money for in the first place. It’s ridiculous.

There are several ways to decrease the cost of a college education while avoiding student loans. One of the most significant cost-cutting measures is to secure college credits while your student is still in high school. In some instances, acquiring college credits while in high school, from the high school, will result in over a 90% discount on tuition. You read that right. With early and proper planning, you can eliminate thousands of dollars worth of potential student loans. Check out these tuition fee schedule pages from Indiana University (Schedule 1 —- Schedule 2). The first is the credit hour fee schedule for IU Bloomington. It shows that the cost of a credit hour, for a college student, is $263.45 per credit hour. The second is the credit hour fee schedule for Indiana University’s ACP (Advance College Project). This is a program that allows high school students to take high school courses – for college credit. According to the schedule, your student can gain college credit for just $25 per credit hour. Um, yeah. Many high schools and universities all across the country have programs similar to this. It’s about time that you take a serious look at them.

There’s more. And that’s why I wrote a book about it. Avoid Student Loans: A guide for maximizing scholarship earnings and making smart financial decisions during college. I wrote the book along with Aaron Martin. He was able to practice exactly what this book preaches, and SIGNIFICANTLY reduce the cost of his education. The book is written for your student, but you obviously would benefit from reading it too.

How’s our relationship now? I angered you, then taught you one small way to lessen the cost of your student’s education. Want to continue the relationship? Feel free to come back to this site every day. Want to take it to the next level? Buy the book.

Your (new) buddy,

Pete

Inheriting poor financial skills is a real problem

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Our parents and grandparents didn’t face all the problems we do today as we try establish a financial foundation. The funny thing is that we brought these problems on ourselves by trying to simplify our lives. Our predecessors didn’t have debit cards, lengthy credit terms, and interest-only loans. Rather, most of our grandparents (when they were our age) cashed their paychecks and put the household cash into different envelopes representing different budget categories. They’d pay bills out of those envelopes and always have enough money to cover the expense. It was hard for them to go backwards financially because they relied on cash. They couldn’t, for example, buy fifty dollars of groceries with thirty dollars in cash.

What do we do now? We log onto our online banking accounts to see if we have enough money to cover the purchase we made earlier in the day. We spend first and worry about the consequences second. With this mentality, it doesn’t matter if you are in the 1950s or 2050s, you’re going to go broke.

Yes, managing your financial life is harder nowadays. Yes, peer pressure is worse than ever. And yes, some people make a lot more money than you. But if you are truly focused on bettering your life, you will ignore what’s irrelevant. More money doesn’t solve maladies caused by meager money management; more money only magnifies these money maladies. Mm-hmm!

Despite these money differences among generations, most of the skills that you need to function financially were instilled in you by your parents. And sadly enough, this is the root of several problems . If your parents didn’t know what they were doing, then your chances of innately knowing what you are doing are slim. And the problem gets worse when you factor in your parents’ level of financial confidence. Your parents’ financial aptitude can be classified into a few categories:

  1. They knew what they were doing and passed it on. This is the best-case scenario. They had solid financial habits, they led by example, and they educated you along the way. In addition, they cut you off when they should have. They also saved money for you, taught you how to save money, and showed you exactly what to do with it.
  2. They knew what they were doing but didn’t bother or didn’t have the time (for whatever reason) to teach you any of it. This is a pretty rare scenario, but definitely one worth mentioning.
  3. They had no clue about how to manage money properly, and they set a bad financial example for you. You still love them. They still love you. We aren’t voting them off the island. We’re just agreeing that they didn’t teach you many good financial habits.
  4. They had no clue what they were doing, but they thought they did. This is a flat-out dangerous situation for everyone. If you inherited a get-rich-quick mentality, a blame-other-people-for-your-financial-problems mentality, or a game-the-bankruptcy-laws mentality, then we have some serious work to do.

Not only do you need to learn how to budget, but how, in some cases, to reverse years of financial socialization. It’s time to face the facts of your financial upbringing. Bluntly, it may have sucked. That’s okay. But that doesn’t mean that you have to perpetuate the suckiness of the past. Standup for your present. Standup for your future.

And even more is at stake. If you are a parent, your children may already be picking up some of these bad habits. Your problem may have become multi-generational. Therefore, as you sharpen your skills as an adult, realize that your own children are watching you now—and they’re making mental notes.

If you have a bad relationship with money, then your children will have a bad relationship with money. If you give your kids all the luxuries in life—but don’t show them that luxuries come through hard work and wise investing—then they won’t understand the value of a dollar.

Tomorrow I plan on making a gigantic announcement here at PeteThePlanner.com. I encourage you to come back tomorrow at 8am to see what has me so excited. Here’s your hint: There’s been something bothering me for a very long time, and tomorrow I am  going to scream about it very loud, for a very long time, to as many people that will listen. Tomorrow is the true beginning of an insane 2012 for me. I hope you can be part of it.

This post is an excerpt from What Your Dad Never Taught You About Budgeting (due to be released March 6th 2012).

The 5 biggest financial mistakes of the part-time entrepreneur

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My sister was a high school senior when I was a freshmen. Prior to one hour into the first day of school, I thought this was awesome. She would drive me to school. She would help me make friends (via her friends), and she would make sure that no one messed with me. Boy, was I mistaken. The experience was nothing like I had imagined. The highlight of my first 60 minutes of high school? Her friend, Jon, helping me find my next class. “Go to the end of that hall, out the door, and take a left into the corridor.” Great advice, Jon. I went out an outside door, the door shut behind me, and I had to walk to the front doors of the school. School security almost didn’t let me back in, and I was 10 minutes tardy to my second high school class.

Whereas this mistake was comical and most likely unavoidable, common errors of new entrepreneurs are never comical and always avoidable. Don’t be a noob. Learn from the mistakes of so many part-time entrepreneurs.

Oh, wait. We should probably identify the group of people that I’m talking about and to. I’m talking about that awesome mom with the awesome camera who knows her way around Photoshop. I’m talking about that brainy computer guy that can navigate all things tech. I’m talking about that talented designer who can breathe life into a dying project. And I’m talking about the hard working account manager who doubles as a club promoter on the weekends. Yes, everyone who earns money outside the realm of normal employment with the hope of that income turning into normal employment. That’s who I’m talking to.

Avoid the following mistakes and your chances of turning your part-time gig into your full-time gig will increase exponentially.

  1. Bad Banking- My biggest entrepreneur pet-peeve on the planet is the commingling of personal banking and business banking. Alright, I’m puttin the smack down. If you don’t have a business account, then you don’t have a business. Go to a credit union or small bank, and get a business checking account. Yes, this requires you registering as a business in your state. Yes, this SLIGHTLY complicates things. But it’s a business, dammit! Treat it like one. Get a freaking bank account. Plus, you get the added bonus of naming your business. Don’t name it something lame like I named my first business (Advanced Planning Solutions).
  2. Wrong mix of free work- While you are honing your skills, you will probably agree to work for free for a friend or family member. That’s fine. Just don’t do it too much. Don’t get taken advantage of. Do a couple of projects for free in order to have examples of your work, and then move on. Charge your friends. Charge your family. My uncle is my dentist. He charges me. One of my good friends is my doctor. He charges me. My best friend on the planet is my lawyer. He charges me.
  3. No business budget- How much does it cost to run your part-time business? What’s that? You don’t know? Come on, man. You HAVE TO know what it costs to be in business. I know exactly how much it costs to run my business. This is because I have a business budget. How will you know if you need a new piece of equipment, if you don’t have a budget? You won’t. So you will either buy something you can’t afford, or you will not buy something that will help your business grow. Create a budget.
  4. Treating your business like a hobby- Are you treating your business like a hobby because you don’t want to stop enjoying it? Big mistake. The quickest way for the fun to run away from your business is to treat it like a hobby. I LOVE my business. It is perpetually fun. Your side-business, or full time business for that matter, is most likely something you are passionate about. That means that it’s easier to have fun with it. Have fun. Just don’t treat it like a hobby. Don’t have a stupid email address. Don’t have crappy business cards. And have a website. It’s a business, not a hobby.
  5. Calling your revenue, income- When your business earns money, that money is called revenue, not income. It’s a very small difference, but when you call the money, income, then you tend to forget about things like taxes and expenses. In addition, when you call the money, income, you tend to just deposit the whole damn check, and spend it freely. No real business would do that. The money that your business earns is called revenue. Repeat after me: revenue.

I love owning a business (several actually), and I hope that you will enjoy owning your own business some day too. If you follow these 5 tips, then you will avoid many of the pitfalls that so many part-time entrepreneurs face. Want to read a good book on part-time entrepreneurship? Check out my friend Erin Albert’s book Plan C: The Full-Time Employee and The Part-Time Entrepreneur. Not only is it a great book, but Erin embodies this philosophy. She is an amazing person.

Have a mistake that you would like to share. Leave a comment below. Thanks!!!

Misinterpreting generosity

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Who wants to get uncomfortable? Me too!

On Monday I had a chance to have lunch with a friend. While I was waiting for him to arrive, I noticed a group of ladies lunching at the table next to me. I, too, am dismayed by my use of ‘lunch’ as a verb. Just as I looked over towards the table, the 3rd member of their lunch party had arrived. She was carrying two small gift bags. She handed them to the ladies, and the ladies tore into them like 8 year olds on Christmas morning. They were candles. First off, as a guy, if you ever buy me a candle, I will promptly throw it at you and call you a derogatory name. But this isn’t about gender. This is about the comment that followed the exchange of gifts.

“Margaret, you’re always so generous!” said one of the ladies.

Bullshit.

Margaret may be thoughtful, but that doesn’t make her generous. Upper-middle class ladies giving each other gifts during a $50 lunch doesn’t make them generous. Generous is when you are giving something to someone that needs something. Giving modest, or even extravagant, gifts to your friends is often misconstrued as generous. I know that it seems like I’m splitting hairs here, but I’m not.

When gifts exchanged amongst family members and friends are misconstrued for generosity, something REALLY bad happens. People who really need others’ generosity, miss out. And it’s especially bad if the giver deems their give to be generous. I believe that most people innately want to help others. This “want” is satisfied when you feel that you have helped others. When you do something generous, or what you perceive to be generous, then this desire is satisfied. An extravagant gift to your friend for her baby shower isn’t generous. It’s thoughtful. The diamond earrings that you give to your wife, girlfriend, and/or mistress isn’t generous. It’s thoughtful. Yet, if we perceive these gifts to be generous, then everyone loses.

This is a HUGE problem around the holidays. Several American families are about to exercise their generosity…in the wrong way. The exchange of gifts amongst the fortunate steals the satisfying act that comes with truly being generous. This makes me very sad.

Yes, I realize that people are allowed to give gifts to each other. Yes, I realize that there is nothing wrong with that. But when you have sifted through the thousands of household budgets that I have, and when you have seen that “gifts” account for a major amount of spending, while “charity” does not, you would feel as jaded as I do. We MUST listen to our instincts. Our instincts are telling us that generosity is very important. But something different is telling us to share that generosity amongst your friends, who happen to be in the exact same socio-economic situation as you.

Gift away. Give. Give. Give. Just realize that you aren’t helping ANYONE by giving your loved one a gift. Harsh? Absolutely. But, I’m in the same boat as you. If I give my daughter a motorized child’s size Barbie Cadillac Escalade (which there is no way in hell I would ever do), then I’m not being generous.

When you truly are generous, you will feel the difference. You will want to repeat the process over and over and over.

Agree? Disagree? Let me know.

Where’s Thanksgiving?

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Thanksgiving is far and away my favorite day of the year. I love food. I love family. I love football. And I love reflection. What I don’t love is what Thanksgiving has become. It has become the “official start of the holiday shopping season.”

I love that Thanksgiving exists to remind us that we should be thankful for the things that we have, but I feel sick that we spend the other 364 days lamenting the things that we don’t have. And in recent years we have kicked this off with the most horrific display of American greed that exists in modern society today: Black Friday. I know that “black” is meant to describe retailers moving “into the black” (becoming profitable), but I think it signifies the beginning of the blackening of our hearts until the next Thanksgiving. The formerly most grounded day in America is now followed by the shallowest display of mindless spending, greed, and excess that is Black Friday. Retailers want us to do stupid irrational things, and we gladly do them. We camp out to buy consumer electronics that we don’t need. We trample our fellow humans in order to get the latest Crap My Pants Elmo or whatever the PR machine spins. Black Friday shopping has even under-classed itself. Instead of fighting each other for gifts for each other, we are now fighting each other for gifts for ourselves. The crowds are thick with self-givers and farcical units which perpetuate the thoughtless gift-fest that is American Christmas. The beast is hungry. We feed the beast. The beast eats us.

Thanksgiving was the day that we used to stop, find and then give thanks. But the crazier that consumerism gets, the harder it is to find true gratitude and humility. Thanksgiving has become Waldo. We can hardly locate sincere thanks when our actions are those of the unappreciative. If you were truly thankful for your income, would you treat it like you do? If you were truly thankful for your job, would you try harder than you do? If you were truly thankful for the freedom that we enjoy in American, would you still help destroy the fabric of this country via cancerous consumerism? If you aren’t part of the solution, then you are part of the problem. The corporate greed that deadens our holiday celebrations was seeded by our thoughtlessness. We have married ourselves to this by our yearnings for more, our discontentment in what we have, and our refusal to buck popular culture in order to change popular culture.

The prophetic words of Langston Hughes have never rang more true. He writes in 1935′s Let America be America Again:

I am the poor white, fooled and pushed apart,
I am the Negro bearing slavery’s scars.
I am the red man driven from the land,
I am the immigrant clutching the hope I seek–
And finding only the same old stupid plan
Of dog eat dog, of mighty crush the weak.

I am the young man, full of strength and hope,
Tangled in that ancient endless chain
Of profit, power, gain, of grab the land!
Of grab the gold! Of grab the ways of satisfying need!
Of work the men! Of take the pay!
Of owning everything for one’s own greed!

Recently, a friend of mine in Georgia lost everything. Everything. He lost his wife. He lost his business. He lost his wealth. He lost his status and credibility. If he gives thanks this Thursday, then I know it will be sincere. For when you have nothing, then you can see what you really have. The noise will be turned down. He can’t be thankful for his money. He doesn’t have any. He can’t be thankful for his wife. He doesn’t have one. He can’t be thankful for his business. He doesn’t have one. He can’t be thankful for his status and credibility. He has none. What will he see this Thursday? Will he see what he has lost, or will he see what he has? If he had ever been truly thankful for all that he had, then would he still be in this position today? These questions keep me up at night.

I wish the best for you. I just hope that we both are on the same page on what “best” means. I hope that the aspects of your life that you can make simple, are simple. The rest is complex. I know this. Just don’t make the rest of your life harder than it needs to be. To me, this means being thankful everyday for the life that you have…and not missing out on it by focusing on the things that you don’t have. Happy Thanksgiving.

Your kid deserves the best. Give it to them, for once

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Would you rather listen to this post? Here is the audio of me reading it to you. Your kid deserves the best as read by Pete the Planner

 

At some point in the last 5 years I have found that I feel responsible to say things that no one else really wants to say or hear. This is mainly because the truth hurts. I feel like we are letting social pressures ruin our kids. We aren’t standing up for their futures because we are too caught up trying to appease them in the now.

***Disclaimer of the day*** If you do any of the things listed below, then that doesn’t make you a bad person. I don’t think you are a bad parent. I’m not the judge of you, nor am I trying to be. I simply believe that we have socialized ourselves into a corner. We have allowed really strange things to become okay. Just allow the following text to enter your brain objectively. If you still disagree, great. And yes, I will most likely be guilty of one of things too someday. But I sure as hell hope not.

If you are anything like me, then you believe entitlement issues are getting worse as the generations progress. It is increasingly common for younger Americans to feel like the world owes them something, when in fact, we are owed NOTHING. I have more of an entitlement issue than someone in their 40s. Someone in their 20s is worse than me. And the 10 year olds are really jacked up. This is because every generation is loosening their grip on sensibility. It’s getting worse. We have to start asking uncomfortable questions in order to stop this awful problem. So you gotta start asking yourself why. Why does a 12 year old think it’s their God given right to have an iPhone? Why does an 8 year old enter you into a Worst Parent of the Year contest if you don’t buy them a Nintendo DS? But what is worse is, why do people think that banks are obligated to give them a mortgage that they can’t afford? Or why do people think that their parents should financially assist them deep into their 20s?

I have identified a few random pop culture occurrences that are ruining the financial sensibilities of our youth. There are thousands of these things, but here are the first four that came to my mind.

  1. High end doll company- I’m angry, but not stupid. I’m not going to name the line of AMERICAN made GIRL dolls that are at the heart of pre-adolescent opulence. Why does a child of any age need a $100 doll? Seriously, just evacuate your mind and ask yourself “what good can a child learn from owning a $100 doll that has $14 shoes and a $50 coat?” People keep telling me that I, too, will eventually buy my daughter this type of doll. “She’ll want one, and you’ll want to make her happy.” Man, I hope I’m better than that. Yes, we all want to make our kids happy, but why does that mean that we have to buy a $100 doll? Why is that socially acceptable? Well, because we allowed it to be. Are you a bad person if you have done this? Not at all. But I believe that you are helping to perpetuate an unnecessary reality: buying luxury items even brings status to 8 year olds. Step back, what are we saying to our kids when we buy them something that is this ridiculously priced? We may be trying to say I love you, but I believe that the heinous financial decision casts a cloud over our expression of love. This cloud will rain over their brains longer than your “I love you” will. In retrospect, I’m now more appreciative of my parents for the things that they DIDN’T buy me versus the things they DID buy me.
  2. Electric lunch money- ”Here Billy, take this lunch money,” I hypothetically say. “I don’t need it. Just fill up my cafeteria card and the balance is deducted from the account that you fill up electronically,” Billy says with 21st century sass. Nope, that won’t give then a skewed concept of money at all. Yes American education establishment, let’s teach our children about money by giving them mock credit cards. Let’s COMPLETELY desensitize them to money. Save all of your “convenience talk” and “safety issues” BS for someone else. I’ve been a Nancy-ass my entire life, and no one ever took my lunch money. Okay, so there’s an opportunity for our kids to make a purchase up to five times per week using real money, and we choose to squash this opportunity and instead teach them how to use plastic? Really? Come on. This stuff happens because we let it happen.
  3. Endless activities- Taking your child to 15 different activities per week isn’t a sign of your love and devotion. It’s a sign that you can’t say no. It’s also a sign that your kids have found themselves to be the puppet master of your world. The higher we lift our children onto pedestals, the farther they will fall when they aren’t the center of the universe anymore. Should you leave them at home in a drawer? No. But when did spending 20 hours a week on your children’s activities start making sense? The reality is that it has never made sense, but we did it anyway. Why did it ever seem sensible to drive three hours to play another 10 year old basketball team? At what point did spending hundreds of dollars per family in travel, food, and hotel rooms to play a “tournament game” against a random group of kids that is 300 miles away make sense? Does your 10 year old really need travel experience? My hand to the sky, I have seen countless middle class families put themselves in terrible financial decisions in order to “be on the travel team.” Not only is that a bad financial decision, but it offers up a terrible decision-making matrix for the impressionable children. If you are trying to support your kids’ dreams, just make sure you aren’t doing it at the cost of their financial future.
  4. Don’t lie to yourself, video games do absolutely nothing positive for your kids- ”It improves their dexterity.” “It keeps them off the street.” “It’s their passion!” Just stop. Stop it. I can’t think of a single item more responsible (in the year 2011) for preventing children from learning the value of dollar than video games. How is it that not only do children have several $40-$50 video games, but in many cases they have several $200-$500 gaming systems. How does this make sense to anyone? Really? Answer me out loud, right now. Ignore your coworker, and answer the damn question. What are we doing? Sure, it’s wasteful. But the damage it does to your kids’ sense of money is worse. And don’t start with the “they save their own money for the game” stuff. Your job is to prevent you kids from wasting money on stupid stuff. If you let them spend their money on whatever they want, then they will do that FOREVER. Forever ever? Forever ever.

I’m am NOT a parenting expert. I am a financial expert. I fix the poor financial parenting that can be traced to the behavior above. Your kid deserves the best. Give it to them. Don’t give them things. Give them parenting.

My goal is to make this post a discussion. Do you have a different perspective on this? Please leave a comment below, and let’s have some intelligent discourse.