Author Topic: Early Mustachian Intervention  (Read 3762 times)

gillstone

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Early Mustachian Intervention
« on: November 26, 2013, 03:38:40 PM »
This may be a bit quixotic but Im looking for advice on staging an early mustachian intervention for my younger brothers (16 y/o twins).  Current habits (and recent criminal activities) are showing that they have the forethought of a pistachio. As I look at the future, I see them coming to me for support (I have the only mustache in 3 generations).  My hope is to get them into frugal habits NOW rather than give a lecture after Ive turned down their umpteenth request for a loan.

The additional complication is my parents who have poor money habits and have endorsed some fairly poor financial decisions.

Where would be a good place to start with them?   Given their home environment is this completely hopeless? Should I just put aside a small amount (under $1,000) that is in effect a revolving loan fund for my money-dumb siblings since that will at least keep the peace?

Frankies Girl

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Re: Early Mustachian Intervention
« Reply #1 on: November 26, 2013, 04:17:25 PM »
I just finished reading the millionaire next door, and one of the subjects sort of rang a bell for me on this situation. It was basically that by enabling the spendy/bad decisions and lifestyle you're adding to the problem - weakening the already weak.

You're proposing to enable them by starting a slush fund to bail them out of messes and loan them money. Don't do that.

Talk to them about money. About dumb instant-gratification purchases and how taking out loans or going into debt is essentially selling out their future. About marketing tactics that tell them that to be cool/modern/smart, that they "need" to have this or that object, and how worrying about what others think is a herd mentality. About how money is power and freedom and it is possible to be happy and still make smart money choices. Just keep talking and try to get through to them using blog or news items, examples from your own life or friends' experiences and tell them that you'll be happy to help them figure it out, and it doesn't have to be that way.


Misstachian

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Re: Early Mustachian Intervention
« Reply #2 on: November 27, 2013, 10:28:15 AM »
One of the best things that happened for me as a mustachian was having a financial adviser come for a talk at my sorority when I was in college. I have always been more of a saver than spender by nature, but the moment when he showed a chart that demonstrated the power of compound interest and starting young crystallized the concept for me. (I think that particular chart was comparing how much money you'd have if you contributed $5,000 to an investment account every year from 20-30, then stopped and never put in another dime, with how much you'd have if you contributed $5,000 every year from 30-65; the details are hazy at this remove.) Seeing that curve and realizing that small sacrifices when young could lead to a much easier life later really mattered to me.

I have no idea if anyone else in the room listened, but from that day on, I've contributed the max to my Roth every year, even when I started my first job out of college at a stipend of $20,000. (And now I do much more.) The guy said he had daughters and wanted to do this talk because so many women near the end of their lives are in terrible financial straits. When I'm home for Thanksgiving this week, I'm going to dig through some old boxes to see if I saved any of his info. I'd love to write him a thank you note for starting me down the path.

All that to say: for me, an English major, it was the math that did it. Show them a chart like that, show them http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/, talk about the things Frankie's Girl mentioned, and hope something gets through!

kkbmustang

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Re: Early Mustachian Intervention
« Reply #3 on: November 28, 2013, 12:55:46 AM »
I had a similar situation with my younger brother, but fortunately absent the criminal activity. After quitting his umpteenth job in IT right before the tech crash, he found himself in a giant pickle. He had failed out of college and was jobless. He wisely decided to go back to school but had zero money. Because, of course. My husband and I agreed to help him out with an incentive, performance based arrangement.

Every semester, he'd report back his grades. For every credit hour of A, we'd pay him IIRC $60. For every credit hour of Bs, $30. $15 for C+. Nothing for less than that. We'd total it up and pay it out in 4 equal payments. There was a $1000 bonus for graduation. This way he had cash for necessities and the better his grades, the more cash he earned. He did graduate and went on to get his Masters.

I'm happy to report he appears to have gotten his shit together.

Maybe something like that would work? Maybe a matching program for savings or something? It's important that they earn it from making good decisions.
« Last Edit: November 28, 2013, 12:57:30 AM by kkbmustang »

Anatidae V

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Re: Early Mustachian Intervention
« Reply #4 on: November 29, 2013, 06:06:36 AM »
I just gave my sister the boring but hopefully helpful present of YMOYL and Anita Bell's "Your Money: Starting Out and Starting Over" (Australian author) for her 21st birthday. Hoping she takes it seriously, as I have developed a slightly unfavourable reputation in the last few years due to my prolific reading of "self help books" (approx 1/3 on minimalism and decluttering, 2/3 on finance. Unfortunately the self help book genre in general has a bad rep for us due to the ... "interesting" stuff my grandmother reads).

At 16yo I doubt they'd read the books, but explain something like "If you had $X in an indexed fund, you would have $Y every month, so you'd have enough to buy Z for the rest of your life (e.g. work out the numbers for, say, a video game a month or something similar).

Kaspian

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Re: Early Mustachian Intervention
« Reply #5 on: November 30, 2013, 12:58:56 PM »
Unfortunately, the word is begining to get out to friends and family that I have a secret mustache behind my clean-shaven face.  On the rare occasion that someone is crazy enough to ask for money, I keep a printout of Len Penzo's "Dear Friend: Here Are 41 Reasons Why Im NOT Lending You the Money," which I hand them.  (I'm thinking of having it laminated.)  If one (or more) of the conditions on the list are true, they'll not see a dime from me.
http://lenpenzo.com/blog/id15845-dear-friend-here-are-41-reasons-why-im-not-lending-you-the-money.html

Nords

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Re: Early Mustachian Intervention
« Reply #6 on: November 30, 2013, 10:11:36 PM »
This may be a bit quixotic but Im looking for advice on staging an early mustachian intervention for my younger brothers (16 y/o twins).  Current habits (and recent criminal activities) are showing that they have the forethought of a pistachio.
Golly, I'm sure glad I was never like that when I was a teen.  [/sarcasm]

As I look at the future, I see them coming to me for support (I have the only mustache in 3 generations).  My hope is to get them into frugal habits NOW rather than give a lecture after Ive turned down their umpteenth request for a loan.
Unless you've already been asked for a loan, it's possible that it would never occur to them that this could involve you.  Maybe it's better to just leave them to sort this situation out on their own, perhaps with the assistance of an adult mentor from outside the family.

The additional complication is my parents who have poor money habits and have endorsed some fairly poor financial decisions.
Where would be a good place to start with them?   Given their home environment is this completely hopeless? Should I just put aside a small amount (under $1,000) that is in effect a revolving loan fund for my money-dumb siblings since that will at least keep the peace?
I don't mean to belittle your concern, but you seem to be leaning awfully far forward to intervene with a solution that might perhaps still be in search of a problem.  Have you already decided that they're totally hopeless and in such need of rescue?

Maybe the best option is to offer to take them on college campus tours, or to introduce them to military recruiters.  Get them started thinking about life after high school, and possibly help them figure out what they'll do when they're free from family.