Adulting, Financial literacy, financial responsiblity-teens and young adults, life skills, parenting, Parenting teens and young adults, parenting young adults, teaching financial responsibility

Teach a Kid to Fish and She’ll Eat For a Lifetime

Launch lady tax check

As an avid reader of Napoleon Hill’s philosophy, I have read that one of man’s greatest fears is the threat of poverty.  Though I have never personally experienced abject poverty, I know well some who have.  I do know what it is like to have to make tough choices. I know what it is like to have $5 left until payday with no savings account or safety net. This was part of what drove my decision to enlist in the US Navy when I was still a teenager.  In retrospect, it was one of the best things I could have done, though it didn’t feel like it at the time.  I was given the chance to be wholly accountable for my outcomes.  It was an excellent training ground to learn countless life lessons.  I am far from being a financial expert, but I continue to learn.  My drive to learn is so I can teach others what I wish I had known at a much younger age.  My own daughters have always had a safety net and sometimes find it hard to comprehend (or tolerate) what I am trying to teach them.  What I offer is perspective by asking the following question: “When our children no longer have parents to consult with (or get subsidies from) how will they manage to get along financially?”  I am a fervent believer in “If you give a man a fish, he’ll eat for a day; if you teach him to fish, he’ll eat for a lifetime.”   Here are just a few things I’ve tried to teach my kids that you might find helpful as you try to teach life skills to yours:

Money Doesn’t Grow on Trees

I’m not sure about you, but I’ve heard this more times than I care to remember.  I’m reminded of a story about one of my daughters who was in junior high school at the time.  I gave the girls a small allowance each week.  My youngest wasn’t a big spender at all.  I would often go into her room, which looked like a hurricane had blown through, and find dollar bills on the floor mixed in with clothing and other miscellaneous items.  After seeing this one too many times, her allowance was suspended until she learned the value of a dollar ( I’m not sure she ever did after I found her uncashed income tax check that is pictured above).   Those of us who earn know well that there is no such thing as a money tree.  It’s our job to teach the next generation the value of work and the value of money.   Discussing the wonders of compound interest as noted on the picture above is a good conversation starter.  Discussions might include how small habits, such as where we get our daily coffee, can make a big difference in wealth accumulation.

My Money is Not Your Money

This one reminds me of a Dave Ramsey video that I watched recently.  I’ll paraphrase what Dave said about buying a car.  According to the gospel of Dave, it is a good idea to purchase transportation that you can pay cash for and continue to save and upgrade if and when you are able.  After going through a series of cars that were less than glamorous, he was finally able to purchase one that impressed, at the very least, his son. As his son luxuriated in the back seat, he indicated to his dad that they were really doing ok now.  Dave, with the same bluntness he unleashes on his radio guests, let his son know that HE was doing ok but that his son didn’t have anything.  While that may seem harsh to some, it sounds to me like Dave was trying to uproot the attitude of entitlement that is so prevalent in today’s society.

It May Seem Like a Lot of Money, But it Probably Won’t Last as Long as You Think

Your teens or young adults might be making career decisions around the expectation that they will inherit a large sum from you or receive subsidies in the more immediate future.  The immature and financially uneducated mind thinks of a large sum of money as the ticket to Easy Street.  So you think that leaving your heirs $1 million will make them secure for life?  Well, if they continued to work and invest well and save the balance received after taxes, they could accumulate a pretty respectable nest egg.   However, if they take the path of many lottery winners or major league sports figures that we’ve heard about, they’ll invest poorly, if at all.  They’ll spend money frivolously as though the supply will never end. And they’ll find themselves bankrupt in a dangerously short amount of time.  They’ll have nothing of financial value to pass on to the next generation.   Asking your offspring for details about what they would do if they received $1 million would be an excellent way to get the conversation started.

Nobody Cares More About Your Future Than You Do

As much as I want my girls to listen to my advice and plead for them to learn from my mistakes, I can’t make them.  I wish for them the very best that life has to offer.  I have the ability to give them more than I have the will to give them.  It’s not because I am stingy.  It is because it is time for them to stand on their own.  If I’m too quick to bail them out every time they have a problem, I’ll rob them of the opportunity to learn from the consequences of their decisions. As much as I care about their future, I can’t plan or execute it for them; it’s all on them.

Make Sure to Choose a Partner in Life Who Shares Your Financial Values

One of the biggest stressors in a marriage is money; lack of it in particular.  The less they have, the higher the stress as they try to compromise on how to spend it.    Life partners can have a very different money blueprint.  There can be a saver and a spender or far worse, two spenders!  Unless a couple can talk about and share money without fighting, there will be problems.  If your son or daughter is dating seriously, don’t be afraid to pull back your support to give them the opportunity to learn to manage their money.  Help walk them though simulated budgets.  It’s easy for young adults to have a false sense of prosperity when they live with their parents and consume all or most of their money on their own pleasures with little or no financial responsibility.  If you allow the reality of financial responsibility to hit them before they head into the world on their own, they have a greater chance for success since they’ve been given a chance to complete a trial run.

After Your Formal Education Has Ended, Living for Free is a Gift

This one is my personal philosophy.  I have been in the role of parent now for 25 years.  I have always been clear in my expectations of my girls.  My home was their home as long as they were being formally educated. After that, it would have to be by mutual agreement.    Adulthood in the Land of The Launch Lady was set to begin when schooling had ended.  I had one who chose to terminate her education during the first year of college.  She lived at home for a number of months after that but when she left, it was on her own.  My part was to hold her financially accountable.  She decided to pursue freedom on the “outside” to a place where she could make all of her own decisions.  It was the best thing that could have happened to her.  I could have never taught her the valuable lessons she learned if I allowed her to stay at home without a plan.  My plan would have varied to fit different circumstances.  If my young adult wanted to finish college and stay home for a time to accelerate the payment of student debt, I would have been supportive of that but only if there was a predetermined and aggressive debt repayment plan.

Anything we can do to get the money conversation started will benefit our kids.  It’s not the only skill we need to teach but for the sake of our children and for the sake of our country, we need to make more of an effort.  Let’s all teach our children to “fish” so they never have to fear poverty.  Leave a comment if you (or someone you know) have (has) found an effective way to make your kids financially literate.

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