Kids and Money: Lessons from the Past and Dealing with the Present

By John Sparks

Any parent reading the interview with Carol Anne Riddell about talking to kids about money, can’t help picking up some very valuable tips in teaching their children about handling finances.

John Sparks

John Sparks

Carol Anne suggested if we teach our sons and daughters how to handle money responsibly at an early age, they might avoid falling into some of the pitfalls we find ourselves in today — most notably borrowing ourselves out of house and home with no means of repaying our debts.

Talking to Carol Anne brought back memories of my childhood and valuable lessons I learned about money from my parents.

I grew up in Fort Worth, Texas in the 1950’s when a gallon of gasoline cost 19 cents, a bottle of Coca-Cola set you back a nickel and 3 cents would mail a letter.  My father’s take-home pay was about $100 a week.  We were considered middle class.

Fridays meant payday.  Dad would cash his check at the grocery store that evening, and he and mother would sit down at the kitchen table and stack the money in different piles — grocery money, mortgage payment, utilities, etc.  I was very aware that this Friday night business about budgets was something very important.  I also realized that Dad built our house as a duplex so that the rent he collected could pay the mortgage.

I didn’t get an allowance, but I can’t remember doing without anything important, yet toys were strictly for birthdays and Christmas.  I’m not so sure I was aware of things I did not have.  Television, a very powerful medium supported by advertisers whose message is designed to create a need for something you can probably do without in the first place, was in its infancy and was just beginning to become a pervasive force.

My first lesson about credit came in the form of an after school treat.  My mother set up an account at a small grocery that I passed by on my way home from school.  Each day I could get a coke and a nickel candy bar.  The grocer would enter it in a small ledger book, and at the end of the week, my parents would pay the 50 cents.

Before the days of gasoline credit cards, we traded at a Sinclair gasoline station down the hill.  Dad made an arrangement with the owner to keep an account of his purchases, and on Mondays, Dad would always settle up.  We lived within our means.

I opened my first bank account at the age of 6.  In those days, the public schools had an arrangement with the Fort Worth National Bank.  Tuesday was bank day at every school in the city.  Teachers would take time out from lessons.  Students would line up at the teacher’s desk with their pennies, nickels, and dimes.  The teachers would collect the change, fill out each boy and girl’s savings passbook, complete a deposit slip and receipt, and an armored car would pick up the collections at each school.  I’m not sure who came up with the idea and how the Fort Worth National got the business, but it taught us a good habit and the value of saving money.  Today no doubt they would question teachers taking up valuable classroom time to do the bank’s administrative work.

Another childhood lesson was about becoming an entrepreneur.  The business?  Converting used soda pop bottles into baseball cards.  You could collect old bottles and get 2 cents a piece for them at Mr. Holland’s Grocery.  The money was quickly used to purchase penny wax packs.  It’s too bad we didn’t know much about investments.  Today that near-mint 1959 Mickey Mantle we bought for a penny will fetch $1,000.  Not a bad return in 50 years.

When I was in the 4th grade, I learned about incentives.  I was paid $1.25 each Thursday to throw a weekly paper route for a small neighborhood newspaper, but every fourth week I was paid $2.25 — as an encouragement to stay with the job.

By that time, Dad had taken me downtown to the lobby of the old First National Bank where I opened up a passbook savings account to deposit the money I made off the paper route.  Dad said I’d need it to go to college.  As the years went by, the paper route was replaced by other jobs.  I continued to bank most of the money, and the day came when my bank balance reached triple digits!

Then Dad told me, “You’re going to borrow $100.”  He had me use the money in my savings account as collateral and deposit the loan in the same savings account where it would draw interest.  He told me the interest on the loan would cost a bit more, but it would pay off in the long run because it was the first step toward establishing credit.

Establishing credit was a far cry from today when almost every day we receive unsolicited applications for credit cards encouraging us to borrow to the hilt.  Most lenders don’t even care if you even have a job and are able to pay back anything but the minimum monthly payment.

Certainly times have changed, but principles taught by parents who cared and took the time last a lifetime.  Teaching a child about money, debt, credit, responsibility, and living within your means is not only an investment in that person, but an investment in the economic future of our country.

Related Stories:

4/28: Talking to Kids About Money

Cluing Kids In About Cash: An Interview