John Fuller: You worked really hard to find just the right Christmas present, but already your kids are expressing a little bit of boredom with those toys and gadgets you bought for them. It seems sometimes that things just aren’t enough and our guest today, Mary Hunt, shares her own experiences with that kind of a challenge.
Mrs. Mary Hunt: I was up fast on the track to just ruining these children, because pretty soon, more is not enough. They were starting to display the very same symptoms that I was displaying, where you know, a shopping trip wasn’t enough. Next week I had to do something bigger and better. And it started getting really crazy and very, very scary, because it was now out of control.
End of Clip
John: Well, it’s so easy to allow your stuff and your finances to spin out of control. And today on “Focus on the Family,” we’re returning to a great conversation and Jim Daly and I had with Mary Hunt just a few years ago. Mary has some great and unique ideas to kind of kick-start your New Year here on managing your money better and teaching your kids to do the same. Let’s go ahead and hear that now with Focus president, Jim Daly.
Jim Daly: We want to talk today with an expert in budgeting and an expert in helping to raise your kids in a healthy way when it comes to money and that’s Mary Hunt, her book, Raising Financially Confident Kids, Mary, welcome back to “Focus on the Family.”
Mary: Oh, thank you so much. Good to be with you, both of you.
Jim: This one is really hittin’ me right where we’re at, because Trent and Troy are 10 and 12 and this is something we’re mindful of. We’re trying to be good parents, good Christian parents and make sure that they understand the money trap and how to manage their money well.
If we were sitting down for a little counseling session, what would you say to me right now with Trent and Troy being 10 and 12? What should we be doing?
Mary: Well, I would tell you both that I truly believe that teaching your children how to manage money is probably one of the most important things you will teach them ever–
Jim: For their lifetime.
Mary: –for their lifetime, because money encompasses all of our lives. It encompasses our relationship with God. It encompasses how we feel about ourself. It encompasses our future. It’s all encompassing. (Laughter) And for parents who are so worried about letting your children have any financial decision making before they leave home, they’re sending their children out into the world, I think disabled.
Mary: In a way, they’re truly handicapped. I am so excited about this book. This is probably the most important book I have ever written. It is that important and I just don’t know how to stress it strong enough that it is so important that children learn how to manage money from a very, very early age. And it’s got to be done in a way that is realistic.
Mary: You’d never teach your children to scuba dive by just telling them about it (Laughter), giving them pictures–
Jim: Good point.
Mary: –you know, put him in the bath tub, letting him see what water feels like and then expecting that those lessons will [help]. It’ll be meaningless until they actually get into the water and experience how to do it while they’re within your grasp, where you can grab them [to] make sure they’re safe.
Jim: Mary, is this passion in part driven by the fact that you and Harold, your husband, Harold, you guys experienced some horrific debt and it really taught you great lessons? Give us a brief description of that and did your parents not teach you how to manage money?
Mary: No, they did not. I grew up in a pastor’s family. We were very poor. And I grew up assuming that money was evil, you know, filthy lucre. I mean, I could quote a lot of [Scripture], you know, the love of money is the root of all ev[il]. I mean, I knew all that. And so, I left home with a lot of self-made notions in my head, that I was sad because we were poor. I would be happy if I was rich. Left home. I was gonna be rich. And I found ways to have things now, pay for them later and it sent me down a horrible, horrible path. It took more than 25 years to get back.
Jim: It sounds like there may be a lesson in there for us as Christian parents, Mary. I want to explore that a minute, because you said you were raised in a pastor’s home. You were taught the right Scriptures.
Jim: But they fell on your heart in a different way as a child. It didn’t resonate in the right way. Talk more about that.
Mary: Right, well, there was no practical application. Through high school, when I was a senior in high school, I got an allowance of 15 cents a week–15 cents. Now I’m not ancient (Laughter). It was nothing. You could buy nothing with 15 cents.
Jim: Right. Maybe a candy bar, maybe.
Mary: Yeah and I got it monthly.
Mary: There was nothing you can do with that. And I was never taught how to make a budget, how to make a spending plan. I was never taught about credit and anything like that. I’m not impugning my parents in any way. It didn’t cross their mind.
Jim: But it is the motivation and why you wrote the book in part, I would think.
Jim: Talk about then you marry Harold and you’re spending money in a way you shouldn’t. What happened?
Mary: I went crazy. I went nuts. Talk about sowing your wild oats, you know, some people rebel in drugs or alcohol or illicit sex or whatever. To me, I rebelled in spending, in having things. And we’ve talked about that, Jim, how that triggered something in my life. It just made me feel fabulous. It was like a high, a euphoria. It was so short-lived that I would do it over and over. And it did horrible things to our marriage and to my family and then in the middle of all this, we have these two precious boys, who are very close in age, similar to what yours are.
At the time when I came to that point where the life change happened for me in 1982, our boys were 6 and 7. And they were already displaying the same symptoms that I had. More was never enough. If there was money, we spend it. And we spend what we don’t have. We get loans, whatever. And there was that hardness of heart. At Christmas time, all 60 gifts on their list that I would make sure they got. So what, you know, is that all there is? The next day, I don’t have anything to play with, you know?
Mary: It was frightening; it was scary and that’s when my husband, Harold and I said, we’ve gotta do something. We’ve gotta do something. It was eith[er do something or] we’re gonna ruin these kids.
Jim: Hey, well, let’s talk about that in terms of what we do to begin to teach our kids. Give us some tips. Again, Jean and I, 10 and 12 with Trent and Troy, what are some things that we can be doing that are practical right now?
Mary: Well, let me tell you how we set it up with our boys. We jumped in way advanced right from the get-go and our boys could not be more opposite. We have an overachiever. We have one who has learning disabilities. We have one who’s challenged in learning; one who’s way [overachieving]. But I can tell you that this plan works the same way for both of them.
Jim: ‘Cause they could understand it and grab it.
Mary: That’s right. And what we told them was, they had to go through boot camp, our own boot camp. We set up our own plan and this plan would start the first day that they go into sixth grade, so they’re a little bit younger than your boys right now. And our younger boy had two years to observe his brother.
Jim: We’re actually right there. Our oldest is going into sixth grade.
Mary: Okay. What we told them was, God has blessed us with certain resources. We are responsible for them. You’re part of our family. You are going to be named and certified an official Hunt Family Money Manager on the first day you go into sixth grade. I mean, this was a rite of passage. We wanted to make this so serious. We’re gonna turn over to you part of the family income to manage.
Jim: At sixth grade.
Jim: (Chuckling) Okay.
Mary: Because each one of us has needs in our family.
Mary: And some of those needs are wants and some are needs. We first taught them the difference between. At age 11, which our son was when he went into sixth grade, your wants and your needs are a lot different than mommy and daddy. We are the adults. Our needs are to make sure you have a place to live and you have food. But you have a lot of wants in your life that we’ve been funding all along. We’re not gonna fund those anymore. But what’s gonna happen is, that you’re going to get $50. Now he’s 38 now. Do the math. This is a long time ago. It was a lot of money.
Mary: And you’re going to be required to manage this money according to the values of our family.
Jim: So, it’s not allowance. This is more serious.
Mary: Well, some people might call it an allowance.
Jim: But it’s bigger.
Mary: We didn’t call it that because kids have preconceived nothing [about] what that is. We called it a salary.
Jim: Yeah, what would come out of that then? Would he buy his own clothes from that?
Mary: Well, let me get to that. He’s only 11-years-old and so, we said in our family we have rules. We give away 10 percent of everything that we receive. Oh, where do you, mommy and daddy? Do you real[ly? Yes, we do. You save 10 percent of everything that you receive. You will be required to do that as an official Hunt Family Money Manager. And the balance that remains, it’s up to you. You’re going to make those decisions. You got it, son? You understand? Oh, yeah! Oh, we had his attention for sure (Laughter), because his math skills are now playing in here.
Jim: That’s right.
Mary: We didn’t tell him what that would be.
Mary: And then we got into the giving. Our rules, we wanted them to be loose enough that he would be required to make that decision, where would he give? And he asked us, where do we give? Well, we give to our church. Do I have to give to the church? No, the rules are, you must give without any strings attached. You must give in a way that you feel is given to a very needy source, someone who’s in worse condition than you are. Because you’ve got so much, you’re going to give some away. Well, he eventually started giving it to Sunday school, because he followed his parents, but we didn’t make that part of the rule. And all of a sudden, learning is taking place.
The saving part had to go into a real bank, not a piggy bank, a real bank. We took him to the bank. He had to learn how to fill out a deposit slip. He didn’t understand withdrawal. He never asked about it, so we didn’t bring it up. (Laughter) But then there was something else. Oh, by the way, this is called “your responsibility list.” Now look here, Jeremy. We’ve got all these items on here. Birthday party gifts, if you are ever invited to a birthday party for a friend, as long as you live, son, you’re gonna buy the gift. We’re not buyin’ that anymore. Video games, oh, we’re not ever going to give you quarters. You will be responsible for yourself. And the list went on, appropriate to his age.
Mary: And I tell you something. We thought this was so brilliant that he would budget. You know, Christmas was coming up. You know, we’re not giving you money to go Christmas shopping ever again. We’re not gonna give you money for skateboard stuff. He loved comic books. We’re not buyin’ anymore comic books. Stickers, all these things, when you go to a friend’s, you know. They invite you to go to the movie with their kids, you’re gonna have to buy your own ticket, son. You know, so plan ahead.
Jim: Okay, now parents are trembling right now because they–
Mary: Yeah, they’re trembling.
Jim: –think, “Uh-oh, I’ll be bailing my child out every three months or so.”
Mary: Well, listen.
Jim: What happens in that case? What do you do?
Mary: There were rules. There would be no loans. There would be no bailouts, none. (Laughter) I mean, we were rigid on this stuff.
Jim: You should teach this to the government.
Mary: Yeah. If you don’t lay down the law when they’re 10-years-old, when they’re 40, there’ll be no way to get it back.
Mary: You’ve gotta do it. We terrified them. We told them, if we go to the store and you see something in the store and your money you left at home and you say, “Well, just give me the money and I’ll pay you back when I get home,” no way ever, no. We will have to go back to the store at a later time. See, we were imbedding in them certain principles that we didn’t even realize were so important. And I’ll tell you, I tell the story in the book about what happened.
Jim: (Chuckling) Right, I was gonna say, did it work?
Mary: And it was a roller coaster.
Mary: (Laughter) Well, how do you define “work?”
Mary: The first month, I mean, we drilled him. We told him. He answered. He knew it backwards and forwards, exactly. He gives away 10 percent. He saves 10 percent. Eighty percent is his to do with as he pleases. He would be responsible. He would have to pay for lunch-a-bunch. That was a big deal at school. On Fridays they had to bring money for pizza because the school would arrange [it], but that was on his list, lunch-a-bunch. And the rule was that we would provide food, but if he wanted to keep the money for lunch-a-bunch and not spend it, he could make his own lunch and bring it from home if he wanted. I wasn’t going to do it.
Jim: (Chuckling) This is good.
Mary: This was going to be his responsibility. Well, the first month, I mean, we were just so proud. You know, we had raised a financially confident kid in one summer. Oh, dear (Laughing). No, it didn’t work that way. He did his giving. He did his saving and he asked us to drive him to Toys ‘R Us.
Jim: A lot.
Mary: That first month (Laughter) one trip. And the whole family went. (Laughter) And honestly, Jim, he spent all but 8 cents on himself that very first day. He was a kid with more money than he had ever seen in his life.
Jim: Yeah, he felt rich.
Mary: And Harold and I [watched]. Oh, and I knew the feeling.
Jim: Fifty bucks.
Mary: That’s right.
Jim: That’s pretty good.
Mary: That was a long trip home. Harold and I are lookin’ at each other like, we just made the biggest mistake of our lives.
Jim: Well, I was gonna ask that. Were you saying this was a mistake? Or is this part of the lesson where you don’t save him. You’ve gotta let ’em sink in order to let ’em swim.
Mary: That’s right. I’ll tell you, my mom’s heart was really, really torn apart and I thought, he’s too young. We’ve made a mistake. We can’t do this. And we decided to stick with it for at least one full month. It was the longest month of our lives and his. He went without a lot.
Mary: But he knew the rules. He never once asked for [more money].
Jim: So, you kept saying no. You kept saying no.
Mary: He never asked. He didn’t ask.
Jim: Oh, that’s good.
Mary: He knew. I mean, this was serious. He was a money manager and he had just blown it and we tried not to berate him about this Star Wars thing he bought for himself. We didn’t talk about it and he had to miss a birthday party. He didn’t have any lunch for lunch-a-bunch, because he didn’t make his own lunch, but he didn’t starve to death. But you know, the book tells the whole story. The next month, the pendulum went the other way. He became the cheapest kid in the whole world.
Jim: So, he caught it.
Mary: Caught it.
Jim: He caught the lesson.
Mary: He caught the lesson and I’m telling you, within six months, we just got into a wonderful rhythm. And I’ll tell ya, through high school, the most wonderful years of all, but you’re gonna freak when you hear this. As a high school student, he managed $300 a month. And you know, our boys became unbelievable savers. They saved more than they spent. They became extremely frugal.
They learned to buy their clothes at the thrift store because yes, every year we added more to their responsibility list. Haircuts, yes, they had to get one, but they could decide where they would get it. Clothes, shoes, yearbook, gasoline, dating, prom expenses, everything you can imagine that a teenager [wants], going to movies with friends, buying books, skateboards. I mean, I could go on and on and on and on. All those things got added to the list.
Mary: By the time they were seniors in high school, they were managing big amounts of money and making decisions sometimes I would not have made, but we gave them the option. And we never put anything on the list that would, in our opinion, have ruined their lives had they chosen not to spend their money on it.
Jim: It’s brilliant. You’re listening to “Focus on the Family.” I’m Jim Daly, along with John Fuller. We’re talking today with Mary Hunt, the author of the book, Raising Financially Confident Kids. And Mary, as I hear your story, I mean, it’s great. You have a good ending to that story. But it did take a lot of nerve on your part and is that where parents will typically make the mistake? They will jump in to bail out.
Mary: Well, right, they’ll bail them out.
Mary: And they will also not trust their kid to follow their family value rules. And I know parents listening to me right now are saying, “Yeah, but what if he takes the $300 and goes and buys dope, drugs?” Cigarettes, the daughter buys clothes that we would not approve of. They’ve got all this freedom to have this money.
Jim: Well, it’s good. What do you say?
Mary: And I say, No. 1, it’s all done within the framework of your family. You’ve got to lay down the law.
Jim: So, the family values have to be part of this.
Mary: Yes, if your daughter knows that mom would never buy her a tube top for summer [and] then if she buys it with her own money, there are consequences. The tube top goes in the trash and she suffers because she made a bad choice. And I talk about this in the book. It’s tricky. Families have to decide for themselves. And you’ve made one decision. We did not tie chores to their salary.
Mary: They had chores to do. They had expectations, but if they did not do them, we did not dock their pay, because we wanted to emulate real life. Now Jim, when you get a speeding ticket on the way home from work tonight–
Jim: Don’t say that. (Laughter)
Mary: –your paycheck is not going to get docked next week in order to cover that. No, you’re gonna have to cover that out of your paycheck. And so, we did that with the boys. If there were infractions, they were given citations and they were stiff.
Jim; Well, talk about that. Give us an example of what a citation [is]?
Mary: Yeah, if you’re making 50 bucks a month and you don’t do your trash when you were supposed to have and given a grace period to boot and you got a $10 citation, that hurt.
Jim: So, that’s all set up ahead of time so they know it’s comin’.
Jim: And that does teach ’em responsibility.
Mary: It does.
Jim: I mean, I think on the allowance system, you know, what I find is that we’re having to remind them so often. Today actually I texted Jean this morning on the way in and said, “Remember today’s trash day. Make sure Trent takes the trash out.” And at some point as a parent, you have to back off and let them suffer that consequence.
Mary: You know, I think that responsibility is the difference. You know, in Ephesians where it talks about children are to obey the parents? And then they’re to honor their father and mother. They come together. Children, young children are to obey their parents, ’cause we are responsible for them.
Mary: But we teach them responsibility, because as they become adults, they no longer obey their parent. That’s not a rule. Now they’re to honor their father and mother, because they have been taught to be responsible on their own. So, I see such a correlation here. We’ve got to teach them through obedience to follow the rules at home, so that we are then able to release them as full adults who are no longer under our authority as parents, to obey them.
But then they go on to honor their parents as becoming responsible on their own. Money is a fantastic tool to teach responsibility to children.
Jim: Well, and now you’re digging in far deeper than the actual money. Now you’re talking about spiritual truth and what’s important and where your treasure is, your heart will be.
Mary: That’s what I said. You know, as we spoke in the beginning, it’s so encompassing, all-encompassing of our lives, that you know, money plays such a big role. I mean, you’re gonna send your kids off to college. They’re gonna be making big-time decisions. And you know who’s gonna trust them with money if you never have? I don’t mean you personally, Jim, but if you haven’t trusted your kids with any money to make their own decisions and have to live with the consequences, guess who will? MasterCard and VISA. They’re waiting there and Discover and all those other credit cards, to give to your college-age student.
Jim: It’s one of the early traps.
Mary: That’s right–
Jim: You show up, Day 1 at college, you’re gonna get the little kit when you check in that’s gonna have a VISA card application.
Mary: –$5,000, we’re gonna trust you with.
Mary: Go have fun, you know.
Jim: (Chuckling) Yeah.
Mary: And I’ll tell you something, if you could talk to our boys now who are adults–Jeremy’s 38, Josh is 37–and they would say, this is the dumbest thing I ever heard. Our mom wrote a book about this, because to them, it was the normal way of life.
Jim: Well, and I gotta tell you, the proof is in the pudding. Are they doing well in their management of money?
Mary: Both boys paid cash for their first cars–
Mary: –at age 16 by the way. They were clunkers, but they became so frugal. They bought their own cars at age 16. Before they were 25, now Jeremy was 25, maybe Josh was about 26, I think, they both bought their own homes in Orange County, California, because they had no student debt. They knew how to save money like you can’t believe. They had great credit scores.
Mary: They knew how to do this because debt had not become part of their lives.
Jim: They manage it; it doesn’t manage them.
Mary: That’s right. Jeremy now owns his own business. He is a fantastic, what do you call it, a visual effects artist. He does movies and television and all that stuff they say computers do that. Well, he owns his own company now.
Mary: And these boys, they just know how to manage money.
Jim: But again, it’s beyond that, Mary. What you’ve really taught them is responsibility. Not just for money, I would think in other areas of life, these lessons that they’ve learned. That’s encouraging–
Jim: –because so often we hear, someone writes a book and you know what? In their real life when you take the veneer off, it didn’t work. You’re sayin’, it worked.
Mary: Oh, it worked. Either one of our boys [is successful]. Josh is married and he and Wendy have Elijah, our little, sweet, wonderful 3-year-old.
Jim: (Laughing) Oh, I see that grandmother’s smile right now.
Mary: Yeah. Now it’s the second generation. But neither one of them [has] ever come to us to ask for a loan, have ever come to ask for a bailout. To my knowledge, neither one of them have ever paid a dime in unsecured debt, interest on unsecured debt.
Mary: They have mortgages. They understand secured loans, which that’s a whole ‘nother story and I think that, that’s honorable.
Jim: Mary, you mentioned your grandchild, a 3-year-old. We talked about the 10- and 12-year-old level. But talk a bit younger. What should that parent of the younger child be doing?
Mary: Yes, there [are] several things I would do over if I could do it again.
Mary: One of them is, I would start much sooner. And Elijah, he’s 3-years-old and he knows that money buys things. And so, now he gets a little allowance. His parents put quarters [in]; he has his three banks, you know, giving, saving and spending. And he knows that when he takes a quarter, he can buy something. I don’t know what it is. It’s not much, but he can buy something and he’s starting to understand that, which is fantastic.
I, too, now if I could do it again, I would require that the boys as part of the plan, have to track their spending. We didn’t do that. Not so that I could approve it, not so that they could come to me and feel like they’re good if they’ve done well.
Jim: Just so they could see it.
Mary: So they could see it themselves, so they could understand how they track, how they spend the money. And we would also institute a tax program in our family.
Jim: A tax, and what would that be for?
Mary: One of my readers came up with this and said back to me after she read our story and she said, you know what; real life is about taxes. (Laughter) So, their family, what they did, they put their kids on salary, followed the Raising Financially Confident Kids plan to the T. But they added this, that everyone had to pay 15 percent of their salary into the family tax jar, the community tax jar, that at the end of the year, they would all decide then how to use it. It usually was for a vacation, because everybody in the family was contributing to the community taxing situation. That’s real life, you know. It played out very well for them and I think that’s a great idea.
Jim: Did you review this every year to see that the plan was meeting the responsibility level of the child, so when your kids went from 10 and 12 to 14 and 16, obviously there [are] different requirements.
Mary: Yes, right. There’s more; that’s right. At the first day of school every fall, they would get a raise.
Mary: Their salary would go up.
Jim: Did that come with a review?
Mary: Yeah, we kinda reviewed as we went along.
Mary: You know, we weren’t that serious. Probably we probably should’ve done that. That would’ve been cool. Call ’em in for a review.
Jim: (Chuckling) That’s right.
Mary: But the responsibility list grew.
Mary: And we quickly went from just “wants” to adding a few “needs” onto the list, but then requiring them within the parameter, you know, if they had to wear shoes. They could not forego buying shoes and go barefoot for the rest of their life. But they could get their shoes where they wanted. And if they came from the thrift store, I had to just (Sigh) close my eyes and take a deep breath and say, “Okay, that was the decision that you made.”
Jim: Let’s talk a minute about the older teen. Let’s say that a parent hasn’t done this and their starting to you know, worry that they haven’t done an adequate job here and perhaps they have a 15-year-old or 16-year-old. And what can they do now with just a few years left under their roof? What can they do to help that child get up to speed?
Mary: Okay, I address this in the book and I tell parents, it’s not too late. As long as you are still supporting them and those children [are] kind of under your authority, this is what I suggest. Read the book first, parents together if you can. Read it separate[ly], whatever. Talk about it.
And then give this book to the child to read, this older teen. I would never let a younger, like your Trent and Troy, do not leave this book laying around the house (Laughter). You do not want to give away your secret.
Jim: They’ll find out our ways.
Mary: Right, right. (Laughter) You don’t want to give away those secrets. But for a 16-, 17-year-old who’s gonna go to college in a year, I would have them read the book.
Jim: It accelerates their understanding.
Mary: I would and I’d put them on salary immediately. I would limit the responsibility list in that first month and increase it each month rather than each year, so that within four or five months, that child is managing a good deal of money, the same amount they’re gonna be dealing with when they go to college. They will not believe that you trust them that much.
Jim: And Mary, it is so good. What we talk about so often here at Focus on the Family is, how do we prepare our kids to be healthy adults? That is the goal, spiritually, emotionally, physically. And you have done such a great job in covering how to manage money, because when you look