Sometimes a little tough love can help your kids learn the money lessons and savings habits for a successful financial life
Sometimes it takes a little more for parents to help their kids with money habits. A little tough love can go a long way in developing the savings habits that will help your kids throughout their life.
Today’s essay is by Dereion Wright, a student at the University of Memphis. He shares how his mom helped him develop a savings strategy to help pay for college.
Check out Dereion’s story and please share on social media. The most-shared essay on how parents can teach their kids about money will win one of our two $500 personal finance scholarships, announced August 31st!
We’ll be publishing scholarship essays like this all this month and next so be sure to check back in for new posts.
Where Does the Money Go?
As Nelson Mandela says, “Money won’t create success, the freedom to make it will.”
This quote speaks volumes to my financial maturity and how I got there. As a high school student working at Popeye’s Louisiana Kitchen, I got paid every week and the money went as fast as I made it!
I spent my income on everything I could from designer shirts to concert tickets, but I was lucky enough to have sort of a financial advisor, my mother. I learned quickly that sometimes the best peer advice can come from someone related to you!
The first thing she told me was that, “I made too much money every week not to be doing something productive with it.” I thought she was out of line at the time because it was my money and I was making it. I soon learned that she might have had a point to what she was saying.
How I Started Saving Money to Pay for College
I sat down and told myself that it was time that I bettered myself since it was almost time to retire the title of high school student and adopt the title college student. If I could have seen the price of the textbooks earlier, I would have gotten a little bit more financially serious way sooner! During the summer I worked at Popeyes and started a job at the University of Memphis Bookstore, and I got some fees that I kind of struggled on.
Check out these 15 online jobs for college students that lead to great careers.
My overall tuition was around $2,000 and of course FASFA didn’t cover the entire cost. I had to take out a loan and I was introduced to something I wasn’t used to and that was debt! My mom had some constructive criticism, but it did me some good, because I finally sat down and started my first bank account with $100 in it as a starting investment.
I also noticed that I couldn’t purchase all my necessary textbooks for class until about two months into the semester and almost failed a course. My mom luckily purchased the textbook along with some motherly advice as usual.
A New Strategy for Saving
What she did was set up my direct deposit to her account and of course I didn’t like it at first, but every week she deposited $50 into my account. She gave me the rest to spend for necessities only and if my funds ran dry a little early, she would increase the deposit into her account in order to stop me from spending extra, so we did have a pretty good system going!
The forced saving plan is a great idea, especially when kids are younger and probably don’t need all the money they’re making at work. Consider opening an investment account with TD Ameritrade to get them started on long-term goals.
I am thankful to this day for what my mom did because she saw that my financial character was slipping and that I had to get myself together and I did!
I am financially stable to the point where I am set up on an installment plan to pay my tuition every month. I am inspired about how much she helped me to be financially stable and mature and I can’t be thankful enough!
I want to thank Dereion for his story about how his mom used a new savings strategy to help him control his spending. Be sure to support Dereion by sharing the article through social media and check in August for the winner of the personal finance scholarship.
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.