The recession has caused many working class families to deal with debt. While we are primarily focused on a parents ability to pay bills, we must not ignore the growing issue of young adults building up bad credit and large debts.
This is the third of six original essays based on my new book, Trust Me: Helping Our Young Adults Financially, which I hope will help parents talk to their children about finances and responsibility.
READ PART ONE HERE
READ PART TWO HERE
A group of young people who often run into the kinds of difficulties we’re talking about are those with attention and impulsiveness problems. Such problems may be connected with specific learning disabilities (LD) that lead them to avoid thinking about financial subjects, such as analyzing their income versus expenses, or managing a bank account. It’s not that they aren’t capable of the simple math those tasks involve. It may be that the way numbers are displayed on a bill or bank statement distracts them with too much digital information competing for their attention. Or the problem might be one of impulse control. Or, poor test performance may have convinced them they’re "no good" at math.
Two things are useful to know about the whole group of attention and learning disabilities (or deficits or disorders or dysfunctions):
- They aren’t merely childhood problems. Difficulties persist through adulthood in at least half of those who had these extra challenges as kids. It’s especially difficult if they weren’t diagnosed in school, when the child could have benefited from alternative teaching methods.
- At all ages, the individual with any of these syndromes is "uniquely wired," as many experts say. Treatment is not a matter of rewiring them. Medication can alleviate some of the difficulties, but by and large what they need are strategies and tools for playing to their strengths instead of their weaknesses.
Nick got an A in every course that piqued his interest and allowed him to use his creativity. In classes that didn’t interest him, he’d get C’s, D’s, or F’s on assignments, especially if a teacher insisted on uncreative adherence to rules: topic paragraph due Monday, note cards and outline the following Monday, five page double spaced first draft with one-and-a-quarter-inch margins ten days later, and so on. (David Giwerc, a prominent trainer of ADD coaches, calls the disorder "a challenge of boredom.")
I had usually done well on assignments like that—and I’ve never had trouble managing my bank account, showing up on time for work, meeting deadlines. But that fact made it harder, not easier for me to be a helpful coach to my son.
There are numerous great resources online and in bookstores for people with ADD as well as for their parents. There are also certified coaches, and you might consider whether one of them could be an effective mentor for your son or daughter in managing their money matters. However, you can’t turn over your parental relationship to anyone. You still need to replace the message "you’re a screw-up and I, your superior, am once again disappointed in you" with "I see your talents and I’m impressed with the effort you’re making. All those positive steps you’ve made toward organizing your life will pay off in success."
In fact, I think many young people who have no attention problems in other areas of their lives suffer from a non-clinical, social syndrome that might be called Attention Money Disorder: the tendency to pay attention to stuff they want to own or do, rather than what they can afford at present, consistent with mundane planning.
Nick: The challenge of self-organization
Freelancing sounds fantastic—choose your hours, work from home, be your own boss—but the truth is, you’ll have a dozen bosses competing for all your hours, making conflicting demands and chaining you to your desk. Furthermore, even when you have a great month and bill a lot of work, that doesn’t mean you get the checks any time soon.
The first work I did for this one client, they gave me a check on the day I finished the animation for their website, and asked me back for another job. I thought, wow, this is a great client; but it was because they knew they needed me for the second job so they wanted me to feel good about them. The next job, though, they took forever to pay. No one accepted responsibility for not having paid me. They passed the buck to someone in Payables who I wound up knowing better than I knew the people I had worked with. Finally, around the third or fourth time I called her, I was a little rude. I thought I’d caught her in a lie, and I probably had, but it was before I realized that everybody knows what everybody’s bluff is and you don’t call them on it because it’s better to focus on your next move and do that. It’s bound to be counterproductive to tell someone that she’s inconveniencing me by doing her job. I said something like, "Quit jerking me around." At which point she got offended, and then made a point of taking even longer to mail my check.
Freelancing doesn’t necessarily teach you what you need to know to deal with big businesses, with suits and office buildings and all. Those guys know what they’re doing. Self-employment isn’t big business and it isn’t small business. It’s little business, more like personal finance. It brought the problems I had with money right home to me in a big way. When you’re a freelancer or a sole proprietor, you are more like a hunter-gatherer than a business. It’s like being a small fishing boat, compared to a big ship with a working crew. You have to do all the jobs; you better keep your gear well organized and close at hand, and you better not need any sleep. On a large vessel, there’s a whole organization in place providing for everyone, and rules and traditions and schedules.
The bottom line: patience and sensitivity
All kinds of circumstances lead young people to be money-challenged. Many have attention deficit or learning disabilities. Others are more than capable of learning the skills and routines of managing their money, except their parents took those skills for granted, perhaps assuming kids would learn them in school (rarely true, unfortunately). Still other children, suffering from low self-esteem, seek gratification or peer approval by spending beyond their means.
Then there’s the grandiosity of the young—illusions of invulnerability. They left the nest prematurely, perhaps for love, or to make babies, or to seek fortunes. Their only failing was not being pragmatic. The predatory credit industry encourages their delusions, because they’re the best kind of borrowers: "nonprime," meaning forced to contract high interest rates.
Regardless of cause, all have one thing in common: budgeting is not a realistic solution to their overspending. We’ll explain why not, and show a better technique for monitoring income and expenses, in the next chapter.