When we think about finances as single parents, it’s typically not something we feel overjoyed about. And if you ever think I wish I knew how to grow my finances, that doesn’t require me to take another job and try to get ahead as a single parent, it doesn’t feel like that’s even feasible. So today we’re going to talk about proactively growing our finances as a single parent. We’ve got a great guest with us. Steve Coughran, who is a CFO of an international billion dollar company, has two decades of experience driving business excellence. He’s done a lot of work and extensive research on strategic growth in corporate financial management. Also, he’s an author and has a podcast called, actually a few of them. But one of them is called Boosting Your Financial IQ. And I think one of the coolest things about Steve is that he was raised by a single mom and has some definite thoughts about that.
Let’s start off with this question, what do we mean when we talk about the idea of financial growth? What does that mean to you?
Financial growth can mean so many things. I mean, oftentimes people think financial growth is about making all this money and becoming rich, so you could go out there and buy all these other things, but to me, financial growth and money really is a vehicle to bless the lives of other people. And I have my experience, which I’m sure we’ll talk about from going from nothing, the scarcity, to abundance.
Tell us a little bit about your childhood and why you have such an empathy for single parents in particular?
When I was about three years old, my mom was married to my biological dad at the time. He struggled with substance abuse, and she finally got to the point where she said, “Look, you have to choose. It’s either drugs or the kids.” And unfortunately at the time, he was so deep into it that he made the decision to leave. And my mom had five kids with him. I was three years old. My sister was just a newborn. And it was a really tough decision that my mom had to make, but she had to put the boundaries down for our safety.
We were playing around the couch and my brother had found a bag of cocaine and [my dad] would come home drunk at night and she was like, “Okay, I got to protect my kids.” But that also meant I had to go from a little bit of security (it’s not like my dad was a great provider and we had all this money—we were living in this tiny little apartment) and [my mom] had to go off on our own. Now all support was cut off. And at the time, it’s not like she was getting child support or alimony or anything like that. It’s just like, you make the choice, you leave, and now you’re on your own. And so that progressed throughout my life in its ebbs and flows. And she got remarried and she found a guy and it’s like, okay, this guy’s stable. He has a job—he actually has a career, a college education. We moved from California to Colorado. We were in this nice, five-bedroom home. We all had our own space. And it was like, Great, life is good. And then next thing you know, some things break out in the family and I’ll spare the details but that led to a divorce and it was a very traumatic time for our family. So once again, my mom was the rock that she is. She had to figure out a housing situation and work and everything else just to support us. So at the time there were five of us living at home. We moved into a two-bedroom rental home. I shared a room with my brother. My other brothers shared a room, and my mom and my sister were down in the unfinished concrete floor basement with a bookshelf between them, and my mom was working. So that was the majority of my life.
One of the things you talk about is having a better financial life. What are some of the hardest parts about living in a single parent home knowing that there was never enough money for you?
Financial scarcity was a big thing, especially after the second divorce when we went from this five-bedroom home into this two-bedroom home. I think I was around 12 or 13 years old. So here I’m in middle school. I remember going to the bus stop in this new neighborhood, and these kids are dressed like a bunch of thugs. They’re in black clothing, they’re smoking. I’m like, what the heck? And here I am trying to fit in, but then I go to school and I grew up in this white middle class suburban area, and [all my friends] all are living in these nice developed areas with pools and basketball courts. And I’m back at home living in this two bedroom house while at the same time my mom’s out there working so hard at multiple jobs. She’s gone from early in the morning till evening just to make ends meet. And it was really, really challenging. I mean, we didn’t have money. If you wanted money, I had to go out there and sling some newspapers or go wash some windows or mow lawns. I mean, there was literally no money.
Do you remember going back to those days, being aware and seeing other people that have some surplus and they do have a little bit of a different level of living. Did that bring about fear or frustration or do you remember because you noticed a disparity between yourself and other families? What were the things that came up in you as a kid?
A lot of it was anger towards my dad because I didn’t understand. I thought to myself, How could a father of five kids just walk away? How could he choose drugs over his kids? I don’t get it. And it impacted my self-worth because here I’m thinking, Am I worth anything? If I’m worth something, why would I get abandoned and why would my siblings be abandoned? And so during this time growing up, especially in junior high and high school, it’s not like I was comparing brand clothes to the next kid: “Oh, look at my Jordan’s. I don’t have Jordan’s, boohoo.” Instead, it was just more like, “Hey, here’s some intact families with a father and a mother. They’re living in this nice beautiful home. The kids are enjoying their summer, and here I am over here.” And it impacted my social life because I was embarrassed to bring my friends over to the house. So then I felt isolated all summer. And then you go back to school, you don’t have those shared experiences. You feel like you’re set back socially because you missed out on a whole summer of all those experiences and conversations with friends. So that was really challenging.
But let me just relay a quick story here. I don’t look at this period of financial scarcity as a terrible thing. And my mom feels guilt and shame still to this day. And I say, “Mom, look, those were the best days when we didn’t have money.” And I remember one Christmas and we were together, gathered on Christmas Eve, huddled around just watching some of the classics. And we knew that we weren’t waking up tomorrow to presents, right? There just wasn’t money. We were just grateful to have some food and everything else. And I remember we were watching a show and the doorbell rang and somebody got up to answer the door, and they’re like, “What the heck? Who doorbell-ditched us on Christmas Eve?” And then we looked down and there’s a box on our front doorstep, and we opened the box and there were wrapped gifts individually for each of us.
And it wasn’t a bunch of random stuff. It wasn’t like, “Oh, here’s some white tube socks.” It was like, I got Legos; I like Legos. My brother got a baseball; he liked baseball. And we’re like, “Wow, that was so kind.” So we sat back, hit play on the movie again, and the doorbell rings again. We go to the door, and once again, there’s another box. Unbelievable. It’s happened again. Another box and another box and another box. And food and snacks. This happened all night, I kid you not. And I thought, Wow. It wasn’t about the gifts. I couldn’t even tell you what Lego set I got, or any other gifts that I got. It wasn’t about the gifts. It was just that other people recognized that we were a family in need, and they used their money as a vehicle to bless the lives of other people. And I thought, Wow, one day I’m going to return that favor.
I just connect deeply with your story. My parents are still married, but scarcity was definitely a thing for us too. And so I’m over here sitting with tears in my eyes, listening to your story, and I connect with that. And I’m just so glad that you were able to see the positive of it and take that away, because I’m also one of five, and I feel like I hold a lot of the responsibility when it comes to the financial health of the rest of my family and want to help in that way as much as possible. But also, and I’ve shared this with Robert before and even here on the podcast, I feel like it’s built so much resilience in me and so much drive to want to give back, but also to be wise in that area and change my family tree in that area and help however I can. So thank you for your heart and how you are wanting to carry this forward.
Looking back at your mom during this time and knowing that she’s working all day every day, if you could go back and tell her anything, what would you say?
Yeah, now you’re tugging on my heartstrings here. Well, hopefully this part’s not on video here. My eyes are leaking a little bit. This tugs at me because I just had a conversation with my mom last August. For her birthday, I decided to take her on a trip to Idaho where she grew up, and we walked around her homestead, and we just had a few days—just the two of us. We had a lot of heart to heart conversations. And one of those conversations revolved around that very topic, Elizabeth, where I said, “Look, mom, I know you carry a lot of shame and guilt.” She feels bad because she couldn’t provide for us and she feels bad she couldn’t pay for my college. And I’m like, “Mom, what you instilled in me, you instilled this work ethic and this drive to just figure things out.”
For myself, self-reliance was a huge part of this lesson. You can’t learn it in school. I went to a lot of school, and I didn’t learn that in school; I learned that from my mom, and that was valuable. So if I could go back in time, and let’s say I could go back to those days and somebody said, “Knowing what you know now, you can live in a family where household income is $500,000 a year, or you can have the same life that you had and go through the same exact struggles,” I’d go through the same exact struggles. And so I said, “Mom, you don’t have to carry shame. You don’t have to carry guilt. You gave me the greatest gift of all. And for that, I am eternally grateful.” And so I think as parents—and this is what the message I want to get across, I know there are people in relationships that are abusive, that are terrible, and especially for women. This is where my heart opens up so much to women because oftentimes women aren’t the breadwinner. Oftentimes they decide to stay at home. So it can create this financial insecurity because they’re not the breadwinner, they’re not used to it. So they may be in a terrible situation where there’s abuse and it’s like, “Okay, I can’t get out because I’m worried that I couldn’t even make ends meet, so I’ll just stay stuck.” Or if they do leave, they feel guilty for breaking up their family. And I just think financial insecurity can play a big part in decisions and it can have massive implications on future outcomes, if that makes sense.
I feel like even though we’re talking about your story, this conversation actually contributes to our mindset with finances and reframing some of that fear and shame that can come along with not feeling like you have enough. You’re striving, you’re working, you’re doing all you can. My hope is that your story helps relieve some of that fear and shame—and that’s actually financial growth in itself, the mindset of your finances.
How have these life lessons [impact] how you parent your kids? And, how do you instill some of those same values in your children?
Because, and I think about this too, I’m not rich by any stretch of the imagination, but my child doesn’t have to live in the scarcity that I did. I have one kid and I’m able to provide what he needs. And not that my parents didn’t provide what I needed, but—he doesn’t get everything he wants, but he gets some of what he wants. I am grateful for some of those life lessons that I learned, but it’s harder because I’m not backed into a corner, my parents were.
And this works for me, so it’s not for everybody. I’ll put that disclaimer out there. Some people may be like, “Oh my gosh, he’s kind of stingy or cruel to his kid.” I believe that money can be a great thing for people. I also think it could destroy so many good qualities that otherwise would be there. So what my wife and I decided is that we are going to spend X amount of dollars on our kids anyway. So let’s say we agree that we’re instinctively going to buy them new shoes. We’re going to buy shorts and X number of jeans and a jacket, etc. And every once in a while we’ll buy them things when we’re out and about. So if you took that theoretical number and put it all together, and then you divided it by 12 and you said, “Okay, that’s going to be my monthly budget, what I’d spend anyways.” Then we said, “Okay, let’s just make that an allowance for the kids.”
And so what we say to the kids is, we agree to provide you with spring clothes and fall clothes and supplies for school. So in the spring you’ll get shorts and shirts and new shoes, and then in the fall you’ll do the same. We’ll provide you with Sunday clothes for church and everything else. And that’s what we agree to provide, and a house to live in, a room, and a bed, and all that stuff. Now, there’s no agreement there to provide you with everything that you want. So instead, you could do some chores around the house. It’s pretty basic. My son (7) goes around and dumps the trash and cleans the bathroom on the main floor. My daughter will do some mopping and sweeping and dusting. It’s a Saturday routine that takes an hour, and then they have to keep the rooms clean, and then they get money.
But there’s deductions along the way. So we will meet once a month at the end of the month and review performance. I’ll say, “Okay, let’s look at your performance and alright, on this day you didn’t make your bed.” And they also get a $5 bonus per month if they do a deep clean of their nightstand drawers and stuff. “So you got your bonus and you have a few deductions, so you actually have $12 in deductions and here’s your amount.” And then we will give them paper money. And that same money is transferred into accounts set up for them through our bank, but they have this paper tangible money. We give them paper tangible money so they don’t lose a $50 bill or whatever it is.
Last week I was out with my daughter and my son and we’re at the Vans store and we love Vans. That’s what we do. We wear Vans from California. I’m a California kid. And my son’s like, “Oh, I really like these Vans, dad, can I get them?” I said, “Sure, you could get ’em. I’m not buying them for you, but you have allowance.” And he’s like, “Ah, dang, how much are they?” I’m like, “They’re $38 plus tax.” I could see the wheel spinning in his head, right? And he’s thinking, do I want to spend this money? I also want to get a BB gun. And so he’s thinking and making the trade off in his head.
It teaches them the value of money instead of just being like, “Yeah, sure. Here, you could buy that. You could buy this.” Because I see so many kids that come from middle class affluent families. They leave home and all of a sudden there’s this expectation or pressure on them to maintain that same lifestyle, which creates financial anxiety. They’re used to driving around in their Tesla and going out to steak dinners, and then they get married and it’s like, “Oh, we have to eat mac and cheese. Well, this is not the lifestyle I signed up for. I want sushi and I want this other stuff that I had with my family every night.” So I think that could be a real trap for parents if they don’t set it up the right way. And that’s why we choose to do what we do.
We are self-critics of ourselves—as single parents especially. We are very, very aware of how we are not able to provide everything we hoped or dreamed. And I love the fact that you were able to encourage [your mom] and our audience and say, “Look, get rid of the shame. You are teaching them resilience and stuff they couldn’t learn if they were in a more affluent situation.”
If you were to be able to go back to your mom as a single mom knowing what you know now about finances, what advice would you give your mom?
If I could snuggle up next to my mom on the couch as a 12-year-old boy, I would tell her to believe in yourself. I’ve had some ecclesiastical responsibilities at my church where I help distribute funds of the church to needy families and when working with these individuals and families, the first thing I do is say, “Okay, I need to understand your monthly costs to figure out your break-even point.” In other words—oftentimes it’s not a spending problem. I mean, there are some cases where it’s like, “Okay, you are living in a car and you have your iPhone and you have all this stuff and you can make better financial decisions.” But for the most part it’s not necessarily a spending problem; it’s an earning problem. So when I say “Believe in yourself, mom” it’s to have that confidence to go to your employer. Or if you are an entrepreneur, go to your customers and say, “This is what I’m worth.” But now you have to back that up with skill sets and value. You can’t just go to your boss and say, “Hey, I want more money because I think I’m pretty stinking awesome.” But as you’re investing in yourself and as you’re looking for ways to add value in your organization or in your business, it’s having that confidence to say, “Hey, I’m worth more and I should get more.” I bring that up because my mom’s boss is great. He’s been very good to her over the years, but when it comes to giving her pay raises, it’s terrible. And I don’t know if they get busy and accustomed to things, but when the new year comes around it’s like, “Here, I’ll give you your 3% bump to keep up with inflation.” What I’m talking about is for these single parents to say, “Hey, look, I can drive value in a lot of ways, so I’m going to ask for more.”
Or nowadays, we live in a beautiful time where we can do accounting on the side. You can edit podcasts on the side. You could do so many side hustles to earn money while your kids are sleeping. And I think that’s great. So that’s the first part: Boost your top line rather than looking for ways to cut.
And then the second part of this question is, how do you grow your finances in a way that doesn’t rely on putting in more hours at your work or pay increase or finding a different career? What are some of those areas that you can grow your finances beyond just the status quo?
The second piece of advice is pay yourself first. And I know that’s so cliche. I mean, it’s like all over Instagram, everybody says that, but I think it’s so critical to remember that whatever you put into the machine, the machine will eat. I mean, you put it into the business, the business will eat the capital. It’s this hungry machine that will consume whatever you put in there and feed it. My mom is really good with this envelope system where she would cash her check and put money into the envelopes: If you have $10 left in the dining out envelope but want a $15 pizza, you’re going to have to take it from groceries. And that worked for her. But I pay myself first. I get a check and it gets transferred to my brokerage account and savings accounts automatically. I don’t even think about it. I don’t see the money and then I make due. And that’s what I’d say to single parents: Pay yourself 5% at first if you can, and then do 10% and then 20%. And if you’re not making ends meet, you’re going to have to go make more money. That’s just me speaking bluntly here.
So if $100 comes in, take $10 of that or whatever you decide that the ratio is, and put it into savings or a brokerage account or your 401k. Put it into your financial future. And so the idea is, if you take your paycheck and pay all your bills and you’re waiting till the end of the month to see what you have left over to put in savings, you’re never going to have that to put in savings. So go ahead and assign a percentage, 5%, 10%, whatever it is, and put that aside first. And then you know what you are left to work with. That way you are taking care of yourself, taking care of your financial future and all of that.
Let’s just say the election finishes and whoever wins says taxes are going up 10% this year. I mean, what are you going to do? Cry about it, lay in bed, throw a temper tantrum, go picket in Washington? No, you’re going to figure it out and you’re going to pay it. It’s going to work out. So why don’t we treat ourselves like that? We pay everybody else first. And I don’t know if the belief is, Well, it doesn’t matter, it’s only a hundred bucks. How’s that going to help me retire? It’s not about the money, it’s about the habit, the pattern that we establish.
I think a lot about the single parents who go from a dual income down to one. I know in particular, I lost the 401k in the divorce. He got all the money in the 401k and we had to sell our house. So basically I rented for six years until I could get back on my feet and get something saved to be able to buy a house. You lose so much financially. And then, maybe they didn’t deal with the finances before the death or before whatever the loss is.
How can you just get started when you’re starting from a deficit? You need to get up to that baseline and maybe you just don’t know what you’re doing. You’re completely clueless to all of this. What would be a good first starting place to go?
Let me address something that you said, Elizabeth. That’s really important because I recently went through a divorce. I thought to myself, I’ll never get divorced. I’m not going to go down the same path that my dad did. I’m going to just keep this family intact. But I had to get out of a bad situation. There’s a lot of guilt and shame that went along with that on my end. But there’s also this feeling of loss. I worked so hard. I was sacrificing so much of my health and my sleep and everything to provide for my family. And here I am giving away half, if not more, to the other side. So that feeling of loss is real for single parents. So I want to acknowledge that because it may feel like, Dang, I gave up the house, I gave up the 401k, now I have to rent. And my life just lost, lost, lost. I think it starts with shifting our mindsets. I don’t want to provide these cliche answers where it’s like, Oh, just change your thinking and everything’s great. It’s hard. Let’s acknowledge it. It’s tough. It sucks. It’s gritty. You feel the pit in your stomach. You feel sick to your stomach. You don’t want to get out of bed. I get all that. I’ve been in that situation. But we can start reframing our mindset. Recently, I was transformed from this victimized mindset: I have to pay this huge sum of money every month. I had to reframe my mindset because I was playing the victim for so long, and I think that could be very dangerous. And when we’re going through a difficult time transitioning into single parenthood, sometimes it feels good to be the victim. It can be destructive. So you have to reframe your mindset and your relationship with money because otherwise you will self-sabotage.
I had this girl reach out from Europe, and she runs a very successful business teaching people how to speak English. And she’s like, “Steve, I make all this money. I have all this money in my account. And then I go out there and I spend every single dollar of it, and I even go into debt. Why do I do that?” I believe it goes back to self-worth. If you feel like you’re not worth something, then you’re going to think, I’m not worth having this money or making this money or having this much in savings and 401k.
I had that conversation with my counselor recently because I was feeling guilty for having enough money to buy a house and to not feel uncomfortable. It was like, I’m actually doing okay now. I was having to play catchup for so long, and I saved and I did the right things and made good choices. And then I started feeling guilty about it. And my counselor was like, “What are you doing? You’ve worked hard for this. It’s okay. It is completely okay.” A lot of times when we think about finances, we jump right to the discipline of it and the behaviors of money and spending too much or not saving enough. But you’ve got to start with how you value yourself.
I love that on your website you talk about how many of us feel clueless about our finances and how for you, financial statements might as well have been written in a foreign language. I find that comforting personally and I know a lot of solos are going, “Okay, I don’t even know how to make heads and tails about this.”
As we’re thinking about financial growth and putting one foot in front of the other, what are some achievable goals you would suggest to someone just starting off that may not even know how to read their bank statement?
I started a whole podcast Boosting Your Financial IQ as a side project. It’s definitely not my money maker. It’s my side hustle and I do it because it’s a passion project—I think financial literacy is so critical. It’s really basic. It’s understanding the story behind the numbers. So number one, you have to figure out the story behind your numbers. A lot of people are like, “Budgeting is so restrictive. I’m not going to have somebody control me or some spreadsheet tell me where I can spend my money.” Then don’t have a budget. But every single time you get paid, whether that’s your tax refund, your paycheck, alimony, child support, whatever it is, take 10% and put it in your account. Bam. You could spend the rest of it however you want, right.
I also think we have to measure what matters. When I turn around companies, I put a strategy in place. Translate that to the personal side: You have to have a life strategy. What are your goals? What are you trying to accomplish in your life? Then we put in place KPIs (key performance indicators) to measure the financial health and performance of the business. Translate that to a personal side: What you measure gets managed. So if you measure your cash balance, guess what? Your cash balance is going to improve. And I always tell business leaders this quote that says, “It’s all about what you inspect, not what you expect.” So if employees know you’re going to inspect their sales, inspect the number of calls that they made for the week, then that’s what gets managed.
Going back to your question, Robert, sometimes it’s just setting goals. My number one goal is to set up automatic transfers right now. Okay, cool. Now, let’s measure some things. Let’s measure the growth of that. Let’s measure your income growth. Let’s measure your monthly spending. What’s your break even point? Knowing the numbers is going to improve your situation. A lot of people don’t want to see the numbers. They’re like, “I don’t want to look at my bank balance.”
If I came to you or any listener and said, “Hey, what’s your monthly break even point?” Most people are going to say, “I don’t know.” But when you can say, “My monthly break even point is $5,100—typically $5,100 to $5,300” now you have a starting point and you could work from there. So it just comes back to measuring things and understanding the numbers behind your life.
When you’re looking at your break even point, I have an idea of what that means, but I’d love your expert opinion on what is included. Would that just be the basics? Does that include gasoline, food extras, birthday gifts, all the things? Or is that just your baseline bills?
It’s everything, but you can’t just put it all in one bucket. You have to have more transparency. Imagine drawing a square and dividing it into four parts. You have in one column with discretionary spending, one non-discretionary, and then recurring, and non-recurring. If you start thinking about your expenses like that, let’s first look at recurring and nonrecurring expenses. Your recurring expenses are going to be your utility bills, groceries, your telephone bill, your mortgage, your rent, all the stuff that happens every single month. And then you have your non-recurring, which is like, Oh, I had to fix the roof. Or I’m going to school, so I have to make this one-time payment.
That’s stuff that’s not going to happen all the time, but when you lump them all together, you’re going to confuse your break even point. I just want to look at my recurring break even point. Because if you lump in tuition this month, but don’t have it next month, it gets all complicated. So just look at your recurring and then you could break up discretionary versus non-discretionary in each of those categories and say, “Okay, out of my recurring, how much of it do I actually have control over?” And what you’ll find is that it’s, in fact, really tiny. And that’s where it goes back to “it’s an earning problem, not a spending problem.” I mean, it’s like, Okay, I’m going to go turn off the lights and we will just live as a family in the dark. We save $5 there. Having that visibility into recurring, non-recurring and then discretionary is going to open your eyes to a lot more things.
If you were to give one takeaway from growing financially as a single parent, where would you start doing one action differently?
Skills. It’s all about skills. Think about what AI is doing to the world. Think about tech. Skills is the name of the game. And as a single parent, it is taking off that victim mentality and putting on a new mindset of abundance and growth. Every year we have a theme. This year, our theme is growth. And so when I’m driving down the road, I choose to listen to podcasts. I choose to listen to books because I want to learn. I want to grow. I’m trying to learn how to cook so I can become a better chef in our home. There’s things you can do to grow your skill set: learn how to edit a podcast, learn how to do some design with Canva, learn how to do some bookkeeping. Whatever it is, you have to grind. You have to grind. I’m sorry, but you do. And I think that’s probably the most important thing because that will ensure our financial success way faster than what you could make up by cutting costs or by putting money in a 401k per se, or just asking for a raise. You’re more likely to go out there, create a new skill, create a new inflow.
Talk to us a little bit about your podcast Boosting Your Financial IQ and the best way to get resources from you.
I started the podcast and put 10 episodes out to the world. It wasn’t supposed to be anything. I think I had two downloads at first—my mom and my sister—and now I get thousands from across the world. So I create these episodes for free. I cover all the costs of producing and publishing and everything else. So those resources are out there for free. So you could go to the website and test your financial IQ. I have an assessment there. But just a caveat: That’s more for business finance because I come from the personal finance world and the business finance world. I think it’s good to pay yourself first. All that stuff’s good, but a lot of advisors say, “Okay, put it in a 401k and one day you’ll have a million dollars. And it’s like, “Yeah, you have a million dollars in 30 years, but in 30 years, a million dollars is going to be what the guy at McDonald’s makes.” So it doesn’t account for inflation. So I think business skills are a great way to elevate people’s lives. If you can understand how money works in business, it’ll translate over to your life. And that’s what I teach. That’s what I believe in.
When we talk about finances, we’ve had other people, other notable people that just get right into the tactics and strategies. It leaves a lot of single parents feeling the antithesis of what I think you expressed. They feel like: I’m never going to measure up to that. It’s not possible. You don’t really understand me. You don’t really understand what it’s like.
I liked that Steve talked about starting with understanding you have value. And it doesn’t mean that money determines your value, but just believe in yourself. We talked about this before. You have a lot to offer as a single parent, so don’t sell yourself short. And the other thing that I really liked that he talked about is: Whatever budget works for you, just pay attention; what you measure really matters. And if you’re paying attention and measuring something, it will start to become a priority.
It can feel overwhelming not having someone to bounce things off of or to take a second look or whatever. I’ll go ahead and say I don’t budget very well at all, but I do know that I have savings. I do take care of myself in that way because I’ve had to. That’s where my sense of security comes from, just knowing I have something in an emergency fund and if something happens, I can cover it—having that to fall back on. And that’s all resulted from me being intentional about putting away that savings before I pay everything else. It’s a huge step. And the rest of it is not great: I pay my bills and I do what I need to do, but I don’t budget every dollar.
I do think it’s the little things. I had a financial advisor who helped me way back in the day when I actually made money to manage. And he said, “Have a drawer (typically in your bathroom if you can afford space), and just start throwing all your change in there.” And so when I became a single dad, I tried to do it every day. I would take all my change and any bill under $10 and put it in there at the end of the day. I would empty out my wallet. And it looked like $5 bills, $1 bills, and all my change. You talk about what you measure—if you’re constantly doing something, it becomes almost a game, almost a sport. Like you’re trying to build up, build up, build up. And it was amazing. I didn’t miss a dollar. I didn’t even miss $5 necessarily, but that grew a tremendous amount of money for me, and I wasn’t even thinking about that money. I think there are a lot of things like that as well as paying yourself first that can help propel us towards financial growth.
Listener Question
As a single parent, how do you handle all the expenses that come when your kids start to drive, such as buying a car, paying for insurance, etc?
I had three girls and then I got married and she had three boys. And just collectively, we continued doing this. We started from probably age 13, having them put money away to buy a car. I said that I would match it up to a certain amount. And so the level that they saved determined what kind of car they got. There had to be skin in the game. Where we live, there’s a lot of pressure on parents to provide everything. The cars that these kids drive, it’s unbelievable. And first of all, they’re not good drivers, so you shouldn’t give them nice new cars, get a big clunky one that they’re going to be safe in. But I think the method here is to bring them into the process. Teach the value of money and that things don’t just get handed down.
And so all of our kids were responsible for at least half of whatever car they wanted to buy. And I’ll tell you that some of them were so anxious to get in, they bought crappy cars. One of my daughters was like, “I’ve saved $800.” I’m like, “I’ll give you $800, but I’m not giving you any more.” And she bought a terrible car clunker, and then she was out of my match. But that was her thing to figure out. And so from day one, they had to do that as well as always pay their own insurance. That was always something that was a priority for us. I think bringing them into the situation, not feeling the pressures as a single parent to have to figure out how to spend money or not spend money. They have to be a part of that process. They paid for all their gas, all their insurance, and half the car.
When miscellaneous little things popped up, I would help them out. When it came to car repairs and all of that, I would occasionally loan them money, but there had to be a contract and a payment plan. Those kinds of finances were always my kids’ responsibility. I figure if they’re 16 years old, it’s a luxury. And if you’re old enough to drive, you’re old enough to start learning the value of money. It costs money to drive cars and to keep cars up, so bring your kids into it.
We love hearing from you. If you want to send in a question, go to our website and you will find instructions on how to email, call, or leave a voice message. You can also head over to Instagram or Facebook and send us a question there as well.
Resources
Boosting Your Financial IQ podcast
