Giant lessons in life

As a parent, I always envisioned my kids becoming responsible adults. The challenge, of course, is to make sure that as parents we teach them lessons that will ‘grow’ with them as they mature. Nevertheless, it feels like young adults today are now destined to be more financially dependent on loans and banks than solid financial lessons. The point I am making is that young adults continue to rack up more debt, earlier in life than in any other time in history. The question then is: what giant financial lessons can youth pick up from an early age to avoid tumbling into the debt trap? I want to make the effort to teach my kids the following financial giants that they can take advantage of later in life:

First, I want to teach them that money takes energy. This financial truth is so obsolete today, that when kids start realizing how money works, they get discouraged because they find out that it takes a lot of arduous work to get the money you want. So why work hard to have money, if you can borrow it almost effortlessly for a small fee? Debt makes sense, if you were never taught that money does not grow on trees. Effort and discipline are the key to making money, and more importantly, keeping it.

Second, I want them to understand that no matter how much money one makes, if you spend it all, you will have nothing at the end. I was talking to a certified financial planner friend of mine, and he told me that I will be surprised if I knew how many couples his firm (a large wealth management firm in our city) counsels that makes over $160,000 a year in salaries, and can only save a few thousand dollars a year. On the other hand, there are couples making half of that, saving double and sometimes triple what these other couples can’t save. What is the secret? The secret is all about being content and having priorities and goals in life. No matter what we make, it is how much we save and invest that makes the difference. If money takes hard-work to gain, keeping it should be a priority, but it seems that it is not the case for most folks these days. Instead we see young couples spending their money like crazy, but they can’t save for retirement or their kid’s college, all in the name of appearances. We call it, the ‘keeping up with the Joneses’ disease. I don’t want my kids to fall into that trap, and more importantly, as a parent, I must model contentment behavior for them to see first-hand.

Third, I want my kids to understand the power of generosity. It seems like, generosity is not connected to finances any more. However, today more and more, individuals, families and corporations (like the B corporation movement that seems to be gaining some ground) are understanding the power of charitable work as a force for good. As a Christian, I want my kids to learn the power of giving and helping others. Giving is something that we are strongly commanded to do in the bible, but seems to be forgotten today. Money can be a force for good to help others, and learning that can be a powerful financial lesson for kids of all ages today. So, as the saying goes, ‘B’ a force for good.

Finally, I want my kids to understand that it is imperative that we make choices based on the goals we have both as a family and as individuals. From an early age, parents can start helping their kids have financial goals that are age appropriate. But the point is that you don’t want to burden your 6-year-old, with college tuition goals just yet, for example, but instead you can help your 6-year-old start making the connections between saving and spending. We need to start mentoring our kids into having financial goals as they grow old, and of course those goals will change over time. But the lessons that are learned by the discipline of following our goals will be the same, no matter their age. Again, this is a modeled behavior, and kids learn by repeating parent’s behavior. Have a visual chart with your kid’s goals that they can see, as they get closer and closer to the finish line. How powerful can that be?

I think if kids and young adults learn these financial giants, they will break debt’s grip to full financial victory. Parents can teach kids to have a solid financial foundation that will carry them well into adulthood. This countercultural behavior will eliminate the need for them to borrow money to ‘get ahead’. In fact, my wife and I truly believe that these financial giants have the potential to break poverty cycles. To recap: Money takes arduous work, it takes even harder work to keep it and use it wisely, and clear solid financial goals can help keep that perspective in place. Start your goals today, please don’t delay, and start having solid financial conversations with your kids, they will thank you later. Enjoy!

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