The problem was.... I didn't know how to deal with it! All of a sudden, I could buy what I wanted, when I wanted! Not to mention all these companies suddenly offering me credit cards and financial deals!!! Yet I didn't know how to budget or manage my money correctly and all of a sudden I found myself in debt! Which got worse when I moved out of my parents home and into a flat of my own!
Suddenly I found myself owing lots of money to different people, having to pay rent, food, electricity, council tax etc and I didn't know how to deal with it. I kept burying my head in the sand and hiding the letters from debt collection agencies. If I couldn't see them, I didn't have to deal with them. I wouldn't even open the letters before they went into the bin.
So there I was, back in the year 2000, aged just 23 and suffering from serious depression. It wasn't just because of the debt I was in, although that was a big contributor there were other factors as well but the debt was one of the main ones. I would stay up all night chatting on the computer, sleeping on the sofa fully clothed, barely eating and what I was eating was junk food, having to watch a DVD's to fall asleep, rarely showering or washing my clothes and hair and only leaving the flat to go to work. My flat was trashed and a horrible mess, I just threw everything on the floor, rubbish, clothes, DVD's etc I had no pride in my flat and I just had no energy or motivation to do anything but play on the computer and watch DVD's. Yet somehow I managed to hide it from everyone and no one knew the state I was in. The only company I had was my dog and she suffered as well as my idea of walking her was just shoving her out of the door! She must have LOVED it when I went to work as she would go to my parents house where she was walked properly. Yet I adored my dog and she was my best friend and some days all I wanted to do was snuggle with her. Then when my flat flooded my parents realised what a bad state I was in and how badly I was coping and they brought me home and slowly, with help, I got over my depression and slowly began to rebuild my finances and learn to cope with money.
A few years ago I discovered a FANTASTIC website and I'm always raving about it. The site is Money Saving Expert hosted by the wonderful Martin Lewis and whenever I have a question about anything to do with money, I always check his website and thanks to Martin I have saved £1000s over the past few years!!!
Now that I'm a mother myself, I want to teach my children how to be sensible with money and how to avoid the trap that I fell into. But what is the best way to approach money to children, especially as mine are still so young, only 9, 7, 5 and 2. So here are a few ideas to help you get started.
- TRY BEFORE YOU BUY - How many times have you bought a DVD, book or a game and not actually liked it? By teaching children to rent from a library, friend or even a video shop or company, they can try before they buy and if they don't like it they know before they actually spend money buying it and can buy something else they do like instead
- DO YOU REALLY WANT IT - They might see something they really really want, maybe that £50 big remote control car that does tricks, but ask them; how often would you use it? Would you really play with it or would it sit in your bedroom gathering dust? Suggest that if they don't think they would play with it that much they could use that £50 to buy 5 toys that each cost £10 and have much more fun and play with them more often.
- IS IT AT THE BEST PRICE? - Shopping online is getting so much easier to find bargains now with companies like Kelkoo and Google who can search for most of the online retailers and share the best price. Even if you just compare the prices at a couple of the bigger shops, this can save money (remember to include P&P).Teach them not to buy the game they really want at the first place they see it, but to research the price to see if it is cheaper or on offer somewhere else! Teaching children to research prices is a very helpful tool for when they get older.
- SAVING - Encouraging children to save up can be a big help for when they're older. So they have £5 pocket money and want to waste it all on sweets, you could encourage them to spend £1 on sweets and save the other £4 because in a few weeks they would have enough money to buy that game they wanted on their DS. But it doesn't stop there, get them to help you look at savings accounts with you and try to work out which one offers the best interest. Teach them now about interest and how by leaving the money in their savings account can give them free money for when they're older! £100 in a bank savings account now could be worth £160 by the time you're 18 and because there are so many savings accounts for children to help you decide try to find the best one. One of the websites that can help you is Money Supermarket
- REMEMBER HOW SHOPS WORK - They WANT you to spend as much money as possible! That's why shops are planned the way they are and you will almost always find sweets near the checkouts, ideal for pester power by tired children who are fed up of behaving and waiting in a queue. By learning the tricks that supermarkets use to try and part you with their cash can help save money for you and them in the long run as you don't fall for their tricks.
- BUT FRED HAS ONE! - Peer pressure can be one of the hardest things as children compete to have the best phones, clothes, toys etc. By teaching them to research what they want themselves and not to buy something just because "Fred" has one is a really important lesson. What Fred likes and plays with, might not suit your child and he could spent all his money to buy some toy that Fred has, but then the toy just sits in the drawer ignored because it wasn't as fun as Fred made it sound! By encouraging them to make decisions themselves, not only helps them learn independence but helps them in later life to make logical and wise decisions, knowing all the facts!
By teaching our children to be money wise, we're helping them in the future! It is one of the best things we could ever teach our children.