My momma taught me about cash flow
Carlo José
Leadership, Learning and Talent, HR Technology, Skills, Innovation, Design Thinking, and User Experience.
There is a time when we are children that the concept of money and value is non-existent. I’ve observed this recently with nephews and nieces under 10 years old. Eventually, they will throw a tantrum when they don’t get everything they ask for. Explaining how money works does eventually become possible with kids. I will never forget how this concept was cemented in my mind as a teenager.
My family lived in the city of Pasadena (California) in the early 90s.We had a modest 2 bedroom apartment in a small 2 storey building. We were on the ground floor, and our kitchen windows faced out onto the tree-lined street, Sierra Bonita. I was in high school, active in sports, and trying to fit in as an immigrant does when you’ve just moved to a new country. This didn’t take too long. Kids can be resilient and quick to adapt, and I was no different.
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Part of fitting in meant having the cool pair of Nikes that everyone was raving about. I justified my need for a new pair of shoes as part of my athletics endeavours. I was playing for the school basketball team at the time. Clearly I did not need the latest pair of $200 Nike shoes. But it all made sense in my head anyway. My mom was not convinced. Eventually she talked me through the inflows and outflows of cash for our household. Here’s how it sounded.
Your dad makes X, and I make Y each month. You (referring to me) don’t make anything. In fact it was made clear to me, I was part of the expenses (school allowances, tuition fees, etc.). Each month we need to pay for rent, electricity, heat, and water. Then there’s groceries so we have food to eat. Then there’s fuel for the car, and the occasional maintenance costs. Ideally we save for a rainy day so a little money goes to that too. My mom did this methodical income and expense analysis that resulted in zero dollars left for my new pair of sneakers.
This practice of reviewing household cash flow has stuck with me to this day. And quite easily adaptable to running a small business too. The concept translates to many contexts. There’s a continuation to this story that I will write about separately: figuring out how to get my new sneakers.
Global Lead of Performance, Reporting, & Insights | International Consumer Business| PSPO
1 年Good for you, it stuck with you early Carlo. I learned when I was older. In fact, when I was already handling the financial planning of the program I was handling for a company, looking at how our EBITDA would look like in the next 3 years, on an excel. That's when I realised I can do the same thing for myself. Never looked back. My personal "excel planning" file now has 15 yrs of data. Guess it's never too late!
Program Administrator at County of Ventura
1 年Didn’t know you grew up on Pasadena! I just started teaching Tala about money too. We have her clean up the living room or her bedroom and give her a dollar each time she does that. That way she would have an early understanding that you have to work to earn it. We’re going to the Rosebowl flea market and she’s thrilled that she will have some $ to spend.. It’s so basic but I think a lot of parents just give in to tantrums and not even care to explain why.. I think it’s a gift you give to your kids when you educate about money and how it works.. Looking forward to the next articles Carlo!
Associate Vice President at Firstsource
1 年My mom used the phrase “we don’t have the budget for that”. I struggled understanding what that meant. ?? Looking firward to rhe next part of the story. ????
So true, Carlo. Similarly, the "expectation" of pocket money rather than the reward or recognition for work - whether that's chores, jobs or helping others.