Singletary: Children must learn the cost of living
By Michelle Singletary
Published: February 1, 2017, 6:00am
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Given what’s going on in the world of politics, and the whipsaw trading in the stock market, maybe you could use some laughs. I know I could.
Recently, I taught a budgeting session for some Girl Scouts in the nation’s capital. I’ve shared with readers before the funny and enlightening outcomes of such sessions and would like to do so again. It’s my effort to constantly emphasize the importance of teaching our children how much it costs to live.
Typically when people do budgeting sessions with children and teens, they give the students a template in which the expense-line items are already identified. But my goal is to get the children’s perception of the basic costs of life, without coaching that can mask the fact that they don’t yet get it.
In groups of about eight, I had the teenage Girl Scouts pick a career and then a city where they’d like to live. They have had to work as a team to decide how to spend their income.
Their first rude awakening, which caused some consternation, was about their salary. They all thought they would start out making the kind of money people earn at the peak of their careers. They thought they would breeze through the exercise with plenty of money to spare. It’s why most chose to be doctors or lawyers.
Lawyers can start out earning a lot of money if they work for a big firm. But the median salary for those who graduated law school in 2015 was $64,800, according to the National Association for Law Placement. The average starting salary for the first year of a medical residency is $52,700, according to Medscape, an online resource for health professionals.
All the girls wanted to live either in New York or Los Angeles.
Then I hit them with taxes. The look of shock after I calculated their net pay was priceless.
After they wrote down their net monthly income, I simply told them to spend their money however they wanted, and that’s when the fun began. I asked the parents to stand nearby and just listen. They were forbidden to give any help. It was their lesson, too.
The expression on the parents’ faces when they realized their children were unrealistic about certain expenses was priceless.
The adults tried not to laugh because, once the kids realized they didn’t have as much money as they anticipated, they started making some crazy concessions.
Following are their fantasy-world budget allocations for real-life expenses:
• $400 a month for a one-bedroom apartment in Manhattan with no roommates. One parent whispered, “They’ll be living under a bridge.”
• $30 per month for a bed. Me: “Are you going to rent a bed?” Group leader: “No, but don’t you have to pay for your bed?”
• $30 a month for cellphone service. Me: “So what kind of phone are you going to have?” Group leader: “A flip phone.” I asked her to show me her current smartphone. She pulled out an iPhone. The room erupted in laughter.
• $100 a month for food. That was about the average they all thought they would spend for meals, including eating out. Me, to the parents: “How much do you spend to feed them now?” Parents: “More than $100 a month.”
• $300 a month for clothes. Just about every group thought they needed to allocate money every month for clothes.
When I asked these aspiring professionals about the student-loan payments missing from their budgets, they assured me they would not have any debt. Why?
Their parents were rich. The parents assured me they were not. But then came the precious moment that happens every time.
“Mom, can I give you a hug?” one girl asked.
She and the other teens got it.
The parents got it, too.
It’s not enough to lecture our kids about being moneywise. They need to see — for real — how much money it takes to live.
Michelle Singletary welcomes comments and column ideas. Reach her in care of The Washington Post, 1150 15th St. N.W., Washington, DC 20071; or singletarym@washpost.com.
