A while back, I talked about why we’re not paying for our daughter’s college.
To much outrage, in fact.
In that spirit, I’m going to bring up another controversial thing we’re going to do with/for our daughter when she is old enough to work her first job.
We’re not going to let her spend the money.
You can get mad – it’s really ok! – but just wait until the end of this article If you’re still mad then, so be it, but at least hear me out first.
It teaches her delayed gratification
In our society which is permeated by instant gratification everywhere, we have lost touch with the value of waiting.
In personal finance, especially, so many have lost touch with what it means to wait. Take investing, for example. Investing involves parking your money somewhere: be it in stocks, bonds, mutual funds, or whatever else – and then waiting.
Millionaires don’t become millionaires overnight. They become millionaires because they worked hard and were patient. They waited out the highs and the lows of investing their money. They didn’t panic when things got tough, they just waited, because they knew that the long-term trend was up.
Those that don’t know the power of delayed gratification pull their money out when they get scared. Or they want to buy something. Or they get bored. Millionaires don’t.
Another example of the downfalls of instant gratification is consumer debt.
Rather than waiting until they could afford something, be it a new car, a pair of shoes, a television, or any number of things, a person with consumer debt needed to be instantly gratified. All of those things could have been afforded, and would have cost a lot less in interest, had they just waited.
I’m guilty of this, as you all know, so I’m not judging. I’m just telling it like it is. And I’m telling you that I don’t want my daughter to end up that way.
So, we’re not going to let her spend the money she earns while she works in high school.
What we’ll do instead is tell her to save it.
If she can refrain from spending the money she earns at her summer job – other than on necessities like gas to get to work, etc – but instead save it, we’re going to double her money and put that in savings. Then, once she’s saved all summer, she’ll be free to spend the money she earned, while the money we gave her sits in the stock market, earning interest.
Don’t worry, we’ll make sure she has a bit of money to do things like youth group events, or other meaningful activities, but she’ll have to come and ask us for money to do so, so that she won’t be spending excessively.
We feel strongly that making our daughter realize the power of delayed gratification will benefit her greatly for the rest of her life – and that it’s well worth a few summers of tough love.
What do you think? How do you teach your children the power of delayed gratification?
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