Guest post by Chris Shannon, Financial Literacy Consultant
“PYF” is a familiar phrase to anyone who has sat through a financial education course or workshop. It’s easy to understand the concept and wisdom of “paying ourselves first” before allocating monthly wages to fixed or variable expenses. But how often does this value align with what we actually practice, especially once we have kids?
When I first learned about the concept of “PYF,” it made so much sense. Setting money aside first rather than just the few pennies left over from my budget would help ensure that I grow my savings and net worth. But did it? Turns out that this value does not translate automatically into habit. Even now, years later, my budgeting logic goes something like this:
“So, we need to make sure we have enough money for our largest bill, our mortgage. OK, next comes the car loan. Now our utilities. Hmmmm, what’s left? Well, we need enough for gas and groceries.” So far, so good–although not a “PYF” mindset, these are all necessities that need to be addressed to ensure we have a place to live, food to eat and a means to earn our livelihoods. But after that, I find my attitude is, “So, what’s left?”—that is spent on kids’ clothing, educational needs, the occasional movie and so on. Are the leftover dregs of our monthly budget being put into savings? Not so much.
I had an “a-ha!” moment when further examining our family budget and how I spend money—I prioritize myself last. STILL! Why is that? Is it because I am a mom and put my kids’ needs before my own? Is it because I am a woman and feel the need to take care of others first? Is it because I am a victim of the economy, unemployment, and harbor a current mentality of hoarding “leftover” income for unexpected bumps down the road?
Bottom line: If I can’t put my money where my financially literate mouth is, then how will my kids?
Perhaps I shouldn’t be so amazed. A recent article by Gallup World stated that 1 in 3 adults worldwide save money; those most likely to save are male, highly educated and have a high income. (So, I’m 1 for 3!) But saving money shouldn’t rely on those things—it is a mindset, not a by-product of circumstances. TP Sicotte agrees, listing many characteristics of good savers, thereby broadening the definition. I have many of these characteristics but still need to work harder to value myself enough to truly PYF. Once I align my existing values with my promising practices, I will be a better role model for my kids and create a family culture of savings and investing.
Am I alone? Anyone else out there still struggle with PYF, even after repeating it over and over to your kids? What do you do to create a mindset of PYF in your kids, rather than a habit of saving?
About Chris Shannon: An educator for over twenty years and a mom of two young kids, Chris spends most of her time as a financial literacy consultant for rAsa consulting. Chris has developed educational materials and trainings for the National Endowment for Financial Education, the National Jump$tart Coalition, the Massachusetts Office of Consumer Affairs and Business Regulation, and many credit union organizations. She currently serves on VISA’s Educator Advisory Council.
© Your Teen’s Money Skills, Inc. 2012 All rights reserved worldwide.