Fun with family finances

Fiscal irresponsibility is everyone's favorite target these days — look no further than last week's midterm elections, where attacking reckless federal spending was a successful Republican rallying cry. Here in Maryland, the state recently began requiring its public schools to teach every high school student a class in personal financial literacy.

That's all well and good, but isn't this a job for the parents as well? To augment the state's effort, I'm offering my family-instilled and personally developed consumer lessons to emphasize the integral role parents must also play in educating students about money matters.

At 8, I accompanied my mother to three grocery stores in one morning, faithfully holding her coupons as she organized and redeemed them to save surprising amounts of money. I also observed her "layaway" transactions in the days before credit cards taught citizens that they could buy things they couldn't afford.

I remember my father's insistence on three estimates for major repairs and home improvements. At 12, I sat mesmerized as he and a car salesman haggled silently, exchanging written offers on scraps of paper. I witnessed Dad's advantageous use of his library research on dealership profits as he negotiated his best deal.

Thus, I learned to resourcefully and comparatively shop, financially prepared, either for items I critically needed or desperately wanted (and could still afford). In passing this wisdom on to my children during shopping trips — often with my own coupons — I sometimes bored them. However, over time, they too learned the pleasures and savings inherent in securing the lowest price possible.

Soon I expanded my parents' informal curriculum with additional lessons:

•Lesson #1: At 9, my eldest son, Brendan, pleaded for a "rad" pair of Nike basketball shoes, costing twice the price of the swoosh-less but very sturdy store brand. I responded that I wouldn't pay the additional bucks, but he could work for the Nikes if he wanted them badly enough. Brendan immediately agreed, and, after he completed numerous chores, we returned to purchase them.

Boy, was he proud of his shoes. And how clean he kept them! My lesson worked so well, I decided to repeat it when he longed for a "cool Starter jacket" at 10. By age 12, Brendan was announcing to family and friends how much better he felt when he purchased something on his own. He also noted how much longer such items lasted because he cared for them so well. At 14, he begged me to let him work part-time at Subway. At 27, he purchased his own restaurant.

•Lesson #2: I promised my talented second son, Sean, at age 10, his own car if he achieved an all-expenses scholarship to a good college. I figured this would be a great academic incentive and might save both of us loads of money. We rarely discussed the topic again, but he kept bringing home all A's. At 17, he informed us that he would soon cash in on his car. Sean finished college debt-free and bought his house at age 24.

•Lesson #3: To celebrate her graduation honors, I promised my daughter, Kelsey, a nice used car, after she secured employment to cover its maintenance and insurance. Unfortunately, due to the recession, an illness, and her Spanish major, it took her nine months to land an acceptable job and the keys to her car. While I sometimes felt like a mean old dad, Kelsey now happily tools around like a real adult and thanks me now for not giving her the car prematurely.

•Lesson #4: For all my children's college decision-making, we listed advantages, disadvantages and costs of each school that had accepted them. I separated costs into two columns: Student's (in loans, scholarships, and campus employment) and Parents' (in loans and direct payments). Individually, they made informed decisions. One chose a private college necessitating part-time work and student/parent loans. The others required no loans for state schools (and neither did Mom and Dad).

What did my children learn from these lessons?

•Don't count on Mom and Dad to fund everything you desire;

•What you buy on your own usually beats what you're given;

•Name brands better be worth your extra bucks;

•Long-term goals and rewards are great motivators;

•Delaying gratification often increases appreciation;

•Colleges, like any major purchase, should reflect value for your dollar;

•Work makes you proudly feel and act grown up.

Teaching students personal financial literacy is long overdue. But all children (and perhaps especially those who aspire to elected office today) also critically need domestic modeling of consumer responsibility and supervised practice to ace the real-life class.

It's up to us as parents to provide practical financial experiences to our children. Our own example is even more important.

Mike McGrew is a school psychologist from Carroll County. His e-mail is

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