The First Secret to Raising Fiscally Responsible Kids
Papa said; “I will promise you one thing. We will not make too much money”.
Steve and I had three kids, our own business, and not much extra cash flow. We knew we would not be able to pay for one, let alone multiple college educations. Papa, as the kids called their dad, facetiously promised the kids, “Don’t worry, I’ll help you afford college; we will never make too much money that you won’t qualify for grants.” Unintentionally, we kept that promise.
We tried, but the typical suburban family story wasn’t working for us. After 13 years as a union electrician in the Chicago suburbs, Steve felt his hard work was only making his bosses rich, and he brought his unhappiness home with him. Months of discussions led us to forgo the benefits and security of the union electrician’s paycheck, pack up our four- and six-year-old kiddos and move to Florida for a fresh start.
Fire Ants viciously bit his ankles as Steve stood next to the driveway of our new Florida home, directing the moving truck. Eight-months pregnant, I watched him dance the ants off, and wondered if this was foreshadowing. During that first year Steve quit five jobs; he had an incredible work ethic and wasn’t afraid to suggest more efficient ways of getting a job done. I knew his managers were intimidated by his ideas. We dreaded draining our savings account without a steady income while he struggled to find more rewarding work.
The last job Steve had ended during a heated argument with his boss at a Christmas party. Alcohol brings out honesty. Steve was telling Dean how to run his business, and Dean was shutting him down just as fast. Dean fired Steve, his hardest working employee, with these final words; “And Steve, you need to open your own God-damn business.” We thought moving, and that first year in Florida, were the hardest things we’d been through as a family. We were wrong.
After considering our options, we bought an existing catering business for $30K , and shazam, we had our own God-damn business. Steve negotiated an unheard of on-the-job training period of six full weeks. He worked with the previous owners, Bob and Andie, on the food truck bringing breakfast and lunch to mechanics, car dealerships, and factory workers five days a week. Bob taught Steve the cooking and prep. Andie taught Steve the bookkeeping, while Bob took care of the clean up. His first day on his own, Steve started prepping at 3:30 in the morning. He arrived home exhausted at dinner time, with the dirty pans still to be cleaned and the books to be balanced.
“I don’t know how I’m going to do this!” he told me. “I spent two-and-a-half hours prepping and wasn’t ready for the first customer at 7 am!” We were both silent for a long minute, thinking about our investment. “We’ll start earlier, at 3 am,” I said. I met him at the truck at the end of the day to help with clean-up, baby strapped on, with five- and seven-year-old ‘helpers’ in the 90-degree Florida heat. It didn’t take long for us to replace the munchkin entourage; we hired our first employee just two months into the venture.
Steve was in his element; he chatted up his customers and asked about their families. Other food trucks tried twice to steal business, but couldn’t shave any loyalty from our base. We built our own kitchen to replace the restaurant we paid as a commissary, and dreamt of adding trucks to expand the route. Our customers thought this was such an easy business: they saw Steve first at 7 am, last at 3 pm, five days a week. What a gig, right?
Between prep, cooking, clean-up, supplies and bookkeeping, we were frazzled. Saturdays were deep clean days, which left Sundays for family adventures. This was not going to change, and it became apparent we were not going to get rich doing this. We had to come up with a better plan. What could be crazier than leaving a union job and benefits, moving 1,000 miles away, and running our own business?
Hold my beer.
We decided to sell our house, buy an RV, and travel the country as seasonal managers — and ended up on the road for 12 years.
That insanely brilliant plan took us one year to implement. Steve continued working the catering truck while we planned and researched. Sundays we scoured every RV lot in driving distance, looking for a tow-behind camper with 4 bunks in the back. Nine months into the search we finally bought an RV and the kids were dumbfounded. They had begun to think the extent of our adventures was climbing in and out of RVs for sale and dreaming about what we wanted. They finally understood this was real. We parked our new “home” in the yard next to our house, and promptly put up a “For Sale by Owner” sign.
The kids helped Papa build bunk-bed ladders and shelves. We gave each of them ONE large plastic bin; they could bring whatever they wanted, as long as it fit in the bin. One year after brainstorming this traveling idea, we hit the road with our three kids, now 11, 9 and 4, and their three bins of Legos, books, nerf-guns, dolls, and shark’s teeth.
We were actually living our dream, finally able to include our kids in our work. Papa was home for breakfast, lunch and dinner. Managing campgrounds was our specialty, but we took on a variety of opportunities. One summer we worked as supervisors for a conference center in Asheville, North Carolina. Six winters we spent in Los Angeles running a Christmas tree lot, and the year we sold fireworks in Corpus Christi, Texas, it actually snowed 8 inches. Between work stints we hiked forests and mountains of every National Park and off-the-beaten path gem of a park we could find. We camped in 48 different states, and visited family and friends we could never have seen if we lived in one place.
Still, we knew we would never get rich doing this. We wanted our kids to have what was important; strong family ties, a solid work ethic, and a good education. Our lifestyle included all of that. We had started homeschooling three years before we began traveling, so that was not new to us. But what about college? There was no way we could afford to pay for four years of university for each of our kids.
Steve and I never spent more than we made. We paid off our charge cards every month, and went on the road with zero debt and some savings in the bank. If we couldn’t pay for our kids’ college, it was our job to help them pay for it themselves. Before the internet, I turned to parenting advice books to figure this out. Whatever the parenting concern, Steve and I discussed different approaches until we agreed on what needed to be done. Now we had to decide how to teach our kids about money.
All the advice seemed so ordinary, until we stumbled on a bizarre suggestion: pay your kids interest. The interest paid by banks was hardly worth considering. We could insist that our kids open a savings account, or we could incentivize them.
10% Interest, guaranteed. I call that an incentive. We paid them 10% interest on their savings accounts. The kids jumped on board, happy to save and get paid. Once they figured out how much money they were earning on those accounts their enthusiasm manifested into earning and saving more.
College talk started during our eldest’s freshman year of high-school. We reviewed the grant options and college costs. We visited colleges around the country as we travelled. A friend of the family gave our kids excellent advice; “Don’t limit yourself to less-expensive state schools. Many private schools offer tuition assistance that will bring the cost down to equal or less than a state school.” The college our daughter chose was St. John’s College in Annapolis, Maryland.
It was the perfect fit for her, but tuition and expenses were more than $50,000 per year. Thanks to Papa’s promise, she qualified for both government grants and private endowment tuition assistance from the school.
And that is how we stumbled on the first secret to raising fiscally responsible kids. I have more detail…, including how to make 10% Interest a plan that encourages your kids to save. Look for my full explanation of the 10% interest secret including when to pay it and how in my next blog.