As I waited in line with Mr 4 at the post office today, I had a sense of deja vu. Sandwiched between a lady in her early 60s and a man who had just told me he was turning 80 tomorrow, Mr 4 and I stood diligently waiting our turn to post a parcel to someone on Trade Me. It was by chance that I was actually lining up, as usually I would just use my card and get the courier to pick up. But I’m trying to teach my kids the value of money, which involves using cash wherever possible.
I remember as a kid going into the post office every week to pay the bills. The trip into town in the back of the Corolla would go on forever and there was always the challenge of seeing how many times my brother and I could play punch buggy before we got yelled at. The windows would be wound down to provide some relief from the sweltering summer heat- although really it just created a heated whirlwind of discarded chip packets that emerged from their homes down the back of the seats. I would stand behind my mum’s solid figure and watch her pull out the pad of paper that the telephone man would convert into money. She would pull out her special gold pen and carefully put the amount on both sides, the date and then sign on the dotted line. It amazed me to think such a thing could exist when everywhere else we had to use cash.
Gone are the days of the magical chequebook, we now have the magical eftpos card to compete with the magical money trees. Getting down to eye level with my son I handed him three dollar coins and the parcel and explained that the parcel would cost $3 to post. He handed me back the parcel, pocketing the coins and smiling cheekily. He’s got a face like butter wouldn’t melt, big blue eyes and dimples, the soon-to-be 80-year-old started to laugh.
“My great-grandson would do exactly the same thing,” he said. “My eldest daughter hasn’t got a clue about money and it’s just passed down the generations.”
Up until a few weeks ago, I would have been in exactly the same boat, but my husband and I decided to take action against our immediate-satisfaction attitude to money and enrolled on a free money management course at our local polytech. To be honest, hubby was dragged along practically kicking and screaming but he is enjoying it now (he knows better than to say otherwise).
So far we have embarked on territory we already knew but were too lazy to admit. We tracked our spending over 6 weeks. All of our money goes down the drain. Literally, all our money goes on food. If I think I’m being awesome at sticking to the budget, I do a really cheap supermarket shop. That’s all good until we get to wednesday and realise there’s nothing for lunch so we both buy our lunches, I figure I’ve already spoilt the budget for the week so the following night we get takeaways and buy another $50 worth of lunch stuff for the ONE pre-school lunch box that has to be made on a Friday. Looking at the figures on paper after 6 weeks was eye-opening. I have always budgeted around $150 for our food shop but really we were spending between $300-400 on food alone. We were eating our savings.
So we decide to go back to cash. Money mountains were coordinated on the dining room table this week, with a realistic wad going to each family member’s savings first. We have given the kids four jars, one for spending frivelously (ie. cheap dollar shop toys), one for saving for their dream toy, one for giving and one to buy their first investment. The idea is that they put a dollar in each jar every week and learn that money is to be allocated to separate budgets and it takes time to build up for things you want.
Anyway back to the post office line, I started to tell the old man about the course and how it really opened my eyes to the fact that there will most likely be no superannuation payments by the time I reach retirement age. The man said he wished he could explain this to his grandkids, who were all my age and every single one of them had chosen not to do Kiwisaver.
“They’re too busy focussed on the here and now,” he said. “Complaining about house prices and how they need every cent to get by. Really, they’ve got all the flash cars and latest i-doofers but not one of them will appreciate that when they’re my age.”
What he was saying made so much sense to me. We have commodities in our life to make things more convenient for us now, but at what cost are these things to our lifestyle in the future. We all like to think we’ll have a big nest egg of investments to retire on by 65 -but what if inflation goes crazy? What if we were forced to use kiwisaver with no government super scheme to top it up. It would mean with $200,000 I could only afford to live for 5-10 years in retirement. Shit, they had better legalise euthanasia by then or we’ll all be homeless!
Depressing stuff really. Although if I think about it, my parents are at retirement age and they have got plenty to live off. I don’t see many people struggling. But they are only expected to live until 80, what happens when they exceed that expectation? They exceed the government’s budget for their superannuation, and there’s less in the pool for the next generation and even less for our generation.
So this guy says it all goes back to teaching our kids about money. The kids see us using a piece of plastic to buy stuff and cannot understand the concept of having no money to pay for something. It makes sense that we can’t understand the concept of not having money in retirement, if you look at it as simple as a child does- why wouldn’t the piece of plastic just pay for something?
By using cash we can show the pile of coins going down, we can physically see that we have less and less money- so we live more frugally. We either do this now, or we could somehow stop all the old people from living too long but I wasn’t about to let this guy in on my plan.