Question of the week #26
Maybe twice a year the New York TImes does an insert about Finances. There was one a few weeks ago and this particular article caught my eye, Growing Up With a Trust. The article was about how one particular person realized when he was 18 how much money he actually had. He had not made it himself and really had zero idea on how to manage it. Both of those revelations can create different kinds of feelings.
Many people grow up with zero idea about managing money. That is why I chose this question for the week.
There are a companies & e-newsletters that have started to teach
people about money & how to manage their money (ie. Mint.com,
DailyWorth, LearnVest & GoGirlFinance). Three of those four are
aimed at women. How have you taught your kids about money and saving
over the years? Or is that not really a top concern / priority of yours
and Fred's? And when you were growing up, and into your 20's, was this
something you learned on your own or perhaps your parents guided you
I happen to be an investor in DailyWorth and I get to see first hand through the endless testimonials we get from women who believe that what they have learned through DW has changed their life. I am a huge proponent of the content that DW provides and the community that has grown there. For whatever reason more of these sites are aimed at women than men. Unfortunately the data shows that women do not pay as much as attention to saving and investing money as men do and companies that speak to investors have ignored women. DW is changing that.
I started working at 15. I got my own car at 16 because it was the only way I could get to and from my jobs solo. I paid for my own gas, I saved my own money, I purchased items that I wanted. In college I worked during the year and every summer. That money allowed me to pay for my needs which were everything besides my education. I paid my own credit cards and knew full well that going into massive debt and paying the minimum balance was not smart money management in the long run. I learned really through being put in a position to figure it out.
It is absolutely a top priority for both Fred and me that our kids understand money. When I read the article about Growing Up With A Trust I can confidentially say that we have not followed any of the supposed rules set which are that your kids do not need to know everything because it is not age appropriate. Our kids not only know everything but because the conversations around money are transparent they understand the importance of managing money responsibly. We have given them their own budgets so that they can manage their own starting in high school. That doesn't mean paying your bills but it does mean that you must manage your life to that number. When they hit 18 then that number changes and they have to manage to all their own purchases including gas, clothes, restaurants, movies, etc. They all want to understand more as they get older because they realize that they are going to have to manage money themselves as they get older including paying the bills and rent. Yet they also understand that you have to invest your money wisely. Jessica is going to graduate this year from college and she took the initiative to sit us down and discuss money and her career goals. That conversation is easy and free flowing because we have been having these conversations for years.
When it comes to anything I am a big believer in transparency with your kids creates confidence, trust and respect. Holding back only creates a wall of secrets. Kids see all and they know all. Treat them as you would wanted to be treated yourself and you will create the right relationship around money ( and other things ). Lay down the expectations from the onset and it gives everyone guidelines.