Buying Dependence

While none of us set out to raise our children to become entitled, unmotivated, irresponsible young adults, many of us treat our precious offspring as if that is exactly what we are trying to do.

Self-confidence and self-reliance go hand in hand.

Do you remember when your three year old pushed you aside and stated strongly “I can do it myself“?

When is the last time you heard that from your 23 year old?

Have you accidentally spent the last 20 years undoing your child’s in-born desire to be self-reliant?

Better for My Kids

We all want our kids to have it better then we had it. The problem lies in defining what better is. At first blush, many of us would say we want our kids to have it easier, to not have to struggle as we did when we were young, broke, and inexperienced.

Let us think about that for a minute. Who would you be without those times? How strong would your marriage be? Chances are, those early hard times taught you to depend on yourself and your spouse. You grew confidence and competence every time you worked hard to overcome your lack of money and experience. I bet some of your best stories come from those times. In fact, I would venture that those “hard times” were some of the best times of your life.

Do you really want to rob your children of that?

Warning Signs

Does your adult or near adult child call you first when they have a problem?  If so, are they just telling you what’s going on, asking for advice or expecting you to solve the problem?

Cindy wakes alone to find the kitchen standing 2 inches deep in water. She dials dad and in a panic and describes the mess.

When Nancy is in the same situation, she quickly tosses a hand full of towels on the floor and proceeds to investigate. Finding the source to be the water heater, she calls dad and calmly explains the situation and asks him what she should do.

Sherry’s response to the flooded kitchen involves finding the source of the leak, shutting off the water, using the wet vacuum to dry the mess and finally calling a plumber to replace the water heater. She tells dad a humor -filled story about the problem 5 days later.

Growing up, Sherry was required to be an active and helpful participate in all manner of household chores. She helped cut grass, paint rooms, fix squeaky hinges. Even though many chores took longer and were done with less perfection because the kids were involved, Sherry’s parents valued the competencies that their kids developed by participating.

Cindy’s dad, on the other hand, had worked hard from a very young age and was determined that his kids should be allowed to “be kids”. Often they stayed in bed all Saturday morning while he took care of the household chores alone.


Sooner or later, most people who have been handed too much start expecting it. The giver is often shocked and angered by the first display of entitlement. They suddenly feel used, not only in the current situation but they often lament of the many times they sacrificed to make the child happy. Have you ever heard a generous giver say something like, “I can’t believe he/she is no longer happy with that car we gave them, I would have been thrilled if someone gave me any car”. Well of course they would have been thrilled. That’s because having purchased all their own cars, they know what a huge gift it is. The receiver, on the other hand, having always been given everything has no real appreciation of the gift.

If you always refuse to allow your adult child to pick up a dinner tab or help with dishes, you have no room to be upset when they quit offering.

When to Give

When and how much to give to our children should be governed by the answers to these questions.

1)      Will this gift hurt my child?

We should measure our success as parents in the character of our children. Are they self-reliant, and resourceful? Do they take initiative? Do they take responsibility for their own actions and learn from their mistakes? Do they have compassion and empathy for others?

If your child is solid in these character traits, then most gifts will not harm them; just be cautious that you don’t rob them of life experiences of their age and income level.

If your child is lacking in any of these traits, you really need to stop and consider if this gift will continue to undermine their development. Continuously subsidizing or bailing out adult children only leads to more dependence and eventually an attitude of entitlement.

2)      Can I afford it?

In my experience, parents blow the family budget on the kids more then anything else. Living within your means requires that the kids live within your means as well. If you are not out of debt and saving, then the kids should not be wearing Ralph Lauren and driving BMW’s. Say whatever you want about being financially responsible, your children will learn from your actions not your words.

3)      Will the gift help them?

Education is a substantial gift that most children benefit from, but even this gift must be given with caution. Most children will take ownership and value their education much more if they must contribute in some significant way to its cost.

Large cash gifts in the form of a down payment for a first home or college savings are often better given in the form of matching funds to money that your child sets aside.

Sometimes you want to give your child something just because you can afford it. There is certainly nothing wrong with this; giving is great fun. Just remember to keep your substantial gifts unexpected and in line with your child’s current stage of character development.

Some of the greatest words you will ever hear from your child’s mouth, whether they are 3 or 33 are:

“I can do it myself.”

Together or Separate?

Many couples choose to operate as independent financial entities.  They each have their own checking account, their own credit cards, their own savings and their own debt. These couples normally have come to some understanding of who is responsible for what expenses.

Is this a problem?

If you have chosen to keep finances separate instead of together, you need to ask yourself are you being private or are you trying to deceive? If you keep things separate because your partner would object to some of your spending or savings behaviors, you may be trying to appear to them as someone you’re not. Does that really sound like the basis for a good relationship, to you?

As long as both of you are clear on what you expect from the other financially and neither is trying to deceive, then I don’t think it’s necessarily a problem. However, I strongly believe couples that maintain separate finances are really missing out on an opportunity to deepen their relationship and improve the overall success of the family.

We used to handle our finances separately and it seems many of my friends still do. If the opportunity arises, I am quick to tell them how much merging our finances has improved not only our financial situation but also our relationship. It is very difficult to truly be together if don’t talk about your dreams and aspirations. Being smart about your money all starts with having goals and if you want to really share your life then you need to share your goals.

Putting your money together, forces you to communicate. If you are both writing checks out of the same account and no one is talking, bad things are likely to happen. One place I believe it is helpful to have less disclosure is with the budgeted blow money. Unless a couple is in financial crisis there should be some reasonable amount of money budgeted to each for blow money. In my way of thinking, that amount should be equal. What that money is spent on does not need to be recorded or disclosed. That’s why it’s called blow money. For one partner to question the validity of the blow money purchases of the other, defeats the whole purpose of not having to be accountable for that spending.

I’ve seen separate money behavior deteriorate to the point of having one spouse direct their credit card bills and bank statements to their work address or to a secret post office box. This level of deceit destroys a relationship. If you’ve fallen into this type of behavior and there are debts your spouse is unaware of, now is the time to resolve to change the situation. Seek the help of marriage counselor, financial coach or your pastor and end the secrecy.

How to Dramatically Reduce your Housing Costs

A friend recently introduced me to Home Share, a very valuable local non-profit. Home Share provides a community housing option by careful screening and matching people needing affordable housing to those that have an extra room or two. This is one of those BeyondDave ideas. If you are really committed to changing your future, doing something a little beyond normal is often what it takes to start winning big.

This is not the sleep on the futon with pizza boxes and empty beer cans on the floor home-sharing option you may have experienced in college.

This is an extra bedroom, often with a private bath, in the home of someone who has more house than they can easily afford. In this economy, that’s a bunch of people.

The St Pete Times recently did a story on the service that you can read here.

Room Providers may be able to use the program to supplement their income enough to hold on to home whose mortgage or insurance is eating them alive. It can be a salvation to the under or unemployed.

If you are trying hard to pay off debt and have a spare room, what a great idea. Here’s $400-$500 extra to throw at that debt while helping someone else. Or maybe you give up your apartment and rent a room for much less a month; how much faster could you get out of debt or save for your own home?

People in transition may find this an option worth considering as well.  We all know that we are more inclined to make big mistakes when we are rushed or in transition. New job in a new place? Rent a room until you get comfortable.

Renting a clean, comfortable room in someone else’s home may be just the thing to jumpstart your new life. Using a service like Home Share insures that both the Seeker and the Provider will be carefully screened and that the match will be made based on common needs, interests and preferences.

The Secret to Getting Out of Debt

I am a “get off your butt and do something” kind of person. I value planning and thinking and strategizing about a problem, but in the end you actually have to do something to see some progress. That’s why I loved this post by frugaldad.

In his article, The Secret to Getting Out of Debt: Forget Snowballs and Interest Rates, frugaldad writes:

“The last two years of my personal journey to debt freedom, something finally clicked. It didn’t matter how I ordered my debts, how many half payments I made, how many times I transferred balances from card to card chasing a lower rate, or how many times I consolidated my credit card balances; the only thing that was going to get me out of debt was boosting my income.”

He goes on to argue that in order to get out of debt you must find more work for a short period of time. Working 70 hours a week and devoting all the money earned from those extra hours is how he got out of debt.

I think he’s on to something here for several reasons:

1)     Simple math

Extra income to pay down debt pays debt down faster

2)     Focus

This should probably be number 1. If you are working when others are relaxing, you must remind yourself of your focus several times a day. I am making this sacrifice because I am getting out of debt. What are the chances you would “forget” your mission and make a non-essential purchase at the mall while working 70 hours a week?

3)     Boredom

If you’re working a side hustle, especially if you can find one that inspires you, there is less chance to spend money out of boredom. This type of spending wrecks budgets all the time.

He goes on to say:

“Debt has a way of trapping you – in bad jobs, in bad relationships, in bad locations. It’s a suffocating financial cancer that eats away at your future dollars, and your current enjoyment. It adds immeasurable risk to your life. It is not to be ignored for another moment.”

Clearly, frugaldad figured out he hated debt and that it was worth a short-term sacrifice to conquer it.

Maybe today is the day you develop that warrior mentality.

One Measure of Wealth

If I were training for a 5k, I could find lots of people willing to show me their training diary. I could pretty easily find someone at about my level and see their training distances and times. I could use this information to gauge my own performance.

When it comes to finances finding this kind of transparency is tough. Employers don’t want employees comparing pay rates. Most of us have been trained and conditioned to keep our money life secret. This lack of transparency makes it difficult to learn from the few that are doing really well with their money.

If you knew one of your friends had no debt and lots of savings, you might be inclined to find out how they did it – or perhaps even more motivating, if you knew your friend or neighbor with the nice clothes and the new cars was being harassed by bill collectors every night, you might want to learn how to avoid following in their footsteps.

If you don’t have a good measure of where you should be, there’s no way to know how well you are doing. A few years ago I thought I was doing really well. I was paying my bills on time and I certainly had a bunch of stuff. It turns out, how much stuff you have is a pretty poor measurement of your financial health.

In the book, The Millionaire Next Door they used this assessment:

Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by ten. This, less any inherited wealth, is what your net worth should be. You can use this calculator to find out where you stand.

For example, if Mr. Anthony O. Duncan is forty-one years old, makes $143,000 a year, and has investments that return another $12,000, he would multiply $155,000 by forty-one. That equals $6,355,000. Dividing by ten, his net worth should be $635,500 if he were an Average accumulator of wealth.

If your net worth is twice what is expected for your age and income , yeah you, you are a prodigious accumulator of wealth! If your number is significantly less than predicted by the formula, it may be time to scrutinize your relationship with money.

Rising Gas Prices

There has been a lot of angry discussion recently about why gas prices are going up. In our area, they are are up 7% in just the last week. Many predict they will to go higher still. I understand your anger, but after you scream and yell and stomp your feet you must face the problem and decide what to do about it.

How is this going to affect you?

If your gas budget has been $200 a month you are going to be $14 over budget if prices stabilize. Or, maybe you operate a small business with a $2000 a month fuel budget, in which case it’s a $140 problem. Either way you must determine where you are going to get the additional money.

Maybe a 7% increase in your gas budget won’t break you, but that money comes from somewhere and living intentionally requires that you acknowledge the increase and make a decision what to do about it.

I have been told by small business owners about similar increases that they will “just absorb” them. What exactly does this mean? Does this mean they will reduce their profit predictions by the expense increases? That is a perfectly acceptable way to handle the increase if that’s what the owners want to do, or they could increase prices or they could reduce another expense or they could find another way (other than price) to offset this expense. The one thing they must do if they what to run an efficient and profitable operation is to make a reasoned decision about the situation. If you don’t take notice of a 7% increase for a single expense, what is your threshold, 10%, 20%?

Like a business, you personally need to be aware and decisive when the cost of an expense increases.

Here are some possible courses of action:

I will take the difference from my blow money. This means a couple less coffees this coming month or skipping a lunch out or missing a movie, if these are things you buy with your blow money.

I will drive a least 7% less. If this is your plan how will you accomplish it? How much is 7%? What trips will you eliminate?

I will carpool this coming month saving _______ miles, which is ___________% of my gas budget.

I will ride my bike either to work or for errands, saving _______ miles, which is ___________% of my gas budget.

I will use public transportation for the following trips_______________ saving _______ miles, which is ___________% of my gas budget.

This is what living intentionally is about. It is making decisions and controlling your life and your money, not just letting things happen to you.

The first step in all of this is to know what you have been spending on gas. Do you really know or are you guessing?  Can you quickly and easily tell me what you have spent the last year?

Be aware. Make decisions. Follow through.