Short answer: your daughter needs a financial diary so that she can learn how she spends her money.
Long story: My daughter took a field trip with her summer camp. The camp provided hot dogs, hamburgers and soda. Plus they were buying all of the materials that she needed for the experience. And they were even providing snacks before they returned home.
I gave her five dollars. We had a long conversation that the money was only to be spent on emergencies. We talked about what emergencies are. Why she might have to spend the money. And the importance of keeping it in a safe space.
If you are a parent, you know how the story ends. She spent all the money.
I wasn’t surprised that she spent the money. But if I’m honest, I was frustrated. Frustrated because she couldn’t remember where she spent the money.
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I know what it is like to be a young girl. I get that feeling of the money is “burning a hole” in my pocket. But as her Mom – and someone who wants young people to take ownership – I realized it was a good teaching moment. I wanted to share a life lesson that my Mom had taught me–how to keep a financial diary..
A Financial Diary Will Track How You Spend Your Money
In today’s language, it might be called a financial diary. It’s a small book or notepad where you track the date, the amount of money, and what you spent it on. You can use software or a spreadsheet. I prefer old school. We went to the $.99 Store and she picked out a notebook.
She started by writing down what she spent on the trip.
Now, this might seem like ANOTHER THING to add to your list. But there is a long term impact from this seemingly meaningless task.
The $5 she loses today will be $500 she loses in the future
I’m grateful that she only had $5! Because as she gets older, there will probably be larger sums of money passing through her hands.
Whether she earns it or someone gifts her money, the concept is the same. It’s reallllly easy to spend money. It’s easy to not pay attention to what you spend it on. It’s an excitement of getting candy for your friends (which of course is where the money went). It’s a HIGH!! Yes, I said it. It’s a high. You lose all rational thought. It’s about the excitement of making others happy.
So, if anyone experiences that high one time, what do you think will happen when they get more? They will want to spend it again!! And get that high back!!
Be clear. I am not judging!!! I did the same thing. But, my Mom stopped me and made me start recording my spending. I have a savings account passbook from years ago with the transactions recorded. I couldn’t take any money out without describing how it would be spent.
It created a powerful habit.
Don’t Judge. Just Track.
#nojudgmentinvolved
Now, if you got this far, I know what you are thinking:
I don’t want to write down every single thing I spend money.
Because there is a ton of crap on the list!!!
LOL
Again, no judgment!!
It’s true. Once you start this habit of keeping a financial diary – and even if you only keep it up for thirty days – you will start to notice a pattern.
There is a lot of junk on the list!!
Yes, but here is where the diary part comes in. Write down why you bought it. How did you feel afterward?
In my daughter’s case, it was about her friends. She wanted them to be happy and really enjoy the trip. I thought that was just the sweetest thing. After I picked myself up from the floor hearing how much the Twizzlers really cost ….
LOL
But, it opened the door to more conversation. We spoke about how she could find other ways to bring that same level of joy in their lives. That didn’t involved always involve sugar highs.
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I know money is a touchy subject. It brings up all types of emotions. Good. Bad. And Ugly. So rather than hide from the emotions, I encourage you to be honest with them. What really turns you on? What makes you smile? And is that worthwhile or are there other options?
Here are some options we brainstormed:
- A playdate.
- Bringing a big box of candy …which Mommy bought from the $.99 store.
- Telling her friends how much they matter.
The goal is to find ways to express emotion without always spending money.
It’s hard when you don’t write down what you do. But, it can be a powerful next step once you push past any fears or concerns and see what you actually spend money on.
As a parent, this discussion was hard. My own money stuff comes up every time!!!
Like why did she spend the $5?????
But, I am open to learning and helping my daughter create positive stories about money. Yes, money is a tool. It’s good to have a long term perspective. And she is going to make mistakes.
Closing Thoughts
My job is to let her make the mistakes. #thatshard But, it’s better to have the discussion and repercussions now than in the future.
Ya’ll know she ain’t get a full $5 next time!!
I’m glad that this moment happened. It forced me to be a sounding board rather than a judging machine.
So I challenge you. Encourage your daughter to start this habit of keeping a financial diary. Do it now while the numbers are small and easy to keep in a notebook. And I promise you will be setting her up for long long positive financial habits!!!
