I was recently browsing some other financial blogs when I came across an article on Consumerism Commentary concerning what the author will teach his children about money. While he had several good points, many of which I will someday teach my children (far, far in the future), there was one that he didn’t mention that I don’t think a lot of parents consider;
how to exercise restraint when receiving large sums of money.
Let me tell you a little story as to why I feel this way. The setting of this story was Technical School for the Air Force. For those who don’t know, Technical School is typically directly after Basic Training. You get paid while in Basic, but aren’t allowed to spend any of it as your every movement is controlled, however, once you arrive at tech school, where you continue to get a steady paycheck, you are granted progressive amounts of freedom, until after a short amount of time you can leave base and do whatever you want.
Now consider the fact that most of these “trainees” are 18 years old, straight out of high school, never lived on their own before, and never had more than a couple hundred dollars in their bank account at any one time. What do they do when they get their bank statement and see at least two grand sitting there, completely within their power?
They go absolutely, positively, completely freakin’ crazy.
By far the largest expense was electronics. I had never seen so many PCs, Xbox 360s, PS3s, top-of-the-line smartphones, and flat-screen TVs in any one building ever before. Many even purchased brand-new cars. In fact, there were local car lots devoted solely to new military members, the owners of which were all too aware of the spending habits of the newly wealthy recruits.
How I escaped these hazards is beyond me, but if I had to give one reason, it was probably picking up my father’s habits with money. I don’t believe I’ve ever seen that man spend a dime on impulse, and while I wasn’t taught specifically to hold on to lump sums of money, I always heard a familiar, cautioning voice in my head whenever I contemplated making a large purchase (or any purchase really), causing me to pause and really consider it, after which I nearly always realized I didn’t actually need it.
This makes me wonder if the recruits who consistently blew their paychecks were also reflecting the attitudes their parents have towards money.