We are pleased to share the money memories of Lynne Finch. Lynne is the author of The No-Cash Allowance: A Practical Guide to Teaching Your Children How to Manage Money. The book received a Gold Award in the Parenting Category from Mom’s Choice Award®. She has been featured in newspapers and magazines, and is a guest on TV and radio shows. She was the lead for the financial literacy panel for the P20 Talks Conference for life skill educators held in San Diego and is a past-president of Fox Cities (WI) group, Women Entrepreneurs of Wisconsin.
In her years as a stay-at-home mother, Lynne created activities to encourage her two children to prepare themselves to be independent adults. When it was time for allowances, she created The No-Cash Allowance for her daughters. After seeing how successful the strategy was, she wrote the award-winning book. She now blogs on her website, speaks, and presents workshops on the topic.
Lynne became a grandmother in 2005 and lives in New London, WI with her husband, a retired technical college instructor. Their married daughters live in Milwaukee and Chicago where her four grandchildren are learning to manage money using The No-Cash Allowance.
Team Sammy: Share with us a little bit about growing up – your family and community.
Lynne: My parents lived during the Great Depression of the 1930’s. My dad served during WWII and had a 22-year career in the Navy. I grew up in a military family, moving many times during my childhood. My dad retired when I was in grade school and we moved to Wisconsin where he finished college to start a second career as a teacher. My mother didn’t work outside the home, but sewed our clothes, cooked, baked and preserved food.
WORDS TO LIVE BY
Team Sammy: If your parents talked to you and taught you about money/personal finance, what do you remember? What, if anything stuck?
Lynne: I can’t remember any specific concerns about money, but I knew we didn’t have a lot. If they talked about money in front of us it most likely was in Finnish, their first language. I got a small allowance and spent it anyway I wanted. I earned some money baby-sitting. One thing my dad told me which has always stuck with me, “Always pay your bills on time.”
DON’T SPEND WHAT YOU DON’T HAVE
Team Sammy: What was your first savings memory?
Lynne: I got my first checkbook when I went to college to manage my student loan money and the money my parents contributed. Seeing my balance as a number made me nervous. That number represented my entire financial resource so I was very careful deciding what to do with it. I could say not spending money I didn’t have was my one smart money choice.
REAL LIFE SCENARIOS
Team Sammy: What was your first job?
Lynne: I worked summers during college and got married during my junior year. We moved to Milwaukee where I worked for a year, then finished college at UW-Whitewater. When we became a two-income household I started paying attention to our finances. I panicked after we subtracted all our expenses and saw the tiny amount left. We ate a lot of scrambled eggs, because it was all we could afford. Where was all that money I had as kid that I could spend any way I wanted to?
KEEP WRITTEN TRACK OF YOUR MONEY
Team Sammy: One question, I ask everyone is: If you could only teach a child one money habit, what would it be and why?
Lynne: Require your kids to start with tracking their allowance on paper. Our one rule was every money transaction is recorded as a number. It was up to the kids to keep track. If the numbers weren’t written down the money didn’t exist.
Hands-on repetition is a learning experience. A 7-year-old who records weekly allowances as a number will make more than 500 deposits before high school graduation.
START WHEN KIDS ARE YOUNG
Team Sammy: Is it important to teach kids about money? Why? At what age should parents start?
Lynne: Start early. My kids were 3 and 5 when I started what would become The No-Cash Allowance. My toddler begged to be included when I started giving our five-year-old an allowance. I thought she was too young and challenged her to count to 100, the number of pennies in a dollar.
Part of my plan was to have my kids learn to count using coins, an activity that turned out to be very popular with the little tykes. Money lessons for my pre-school children included exchanging coins for a dollar. They also decided how to spend their small allowance. Like all kids, mine wanted money. Why? Because money gets stuff. Kids want money so they can buy their own stuff.
Of course, there is more to money than spending, but with young children when it’s “all about me” the activity of spending for self is the starting point. Having money is a big deal to a three-year-old. Going shopping and making decisions about using money is even more exciting.
3 KEY ELEMENTS TO KIDS MONEY MANAGEMENT SUCCESS
Team Sammy: Should personal finance be taught in schools?
Lynne: As taught in schools, financial literacy is knowledge. But knowledge is not enough. Listening to an explanation does not translate into skill. Memorizing the motorist’s manual does not make one a skilled automobile driver. Knowing how to read music does not create a concert pianist. Seeing how to ride a bicycle doesn’t guarantee a kid will not lose his balance.
What’s missing in financial literacy curriculum? It’s three important elements of money management only parents can provide: money, control, and responsibility. Parents are responsible for providing funds in a consistent way, much like they provide resources for a child to learn other skills, such as sports or music.
Without these elements it doesn’t make any difference how much knowledge a kid learns in a financial literacy class. It is the combination of using money, along with having total control and responsibility for required expenses that gives kids practice developing money management skill. Kids only learn to manage money by making decisions using their own money and learning from their mistakes.
THOUGHTS FROM LYNNE ON A FEW PERSONAL FINANCE TOPICS
Lynne: My husband and I both used student loans for our undergraduate degrees. After we were married when he went to graduate school, we again borrowed money. It took us years to pay it all back, but we knew it was our responsibility. When our daughters were ready for college, we agreed to share the costs; they would have to take out student loans. We compared it to borrowing money to buy a new car, but emphasizing an education was much more important for their future. We deposited our contribution to their accounts and they managed it from there. Amazingly we realized after they graduated they never once called home to ask for money.
Parents would be wise to look at technical colleges. A degree from a technical college is quicker to earn, costs much less than a 4-year degree, and job placement is much higher. My husband taught 25 years in a technical college. I attended a technical college to get another degree after my bachelor’s that better prepared me to enter the workforce after being a stay-at-home mother.
Lynne: We’ve never used much cash in our 50+ year marriage, managing our money with checks and credit cards early. When we were newlyweds credit cards were very difficult to get; we needed to show we were employed for six months to even apply. Now we use mostly credit cards, always pay the balance in full, and enjoy the rewards we earn. Our kids learned that credit cards are high-interest loans and must be paid back.
Lynne: “Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.” – Ann Ryan, Atlas Shrugged
LEARN MORE ABOUT LYNNE
To discover more about Lynne Finch visit: https://www.linkedin.com/in/lynnefinch/