Amanda's Note: This was provided by an online contact.
No parent is perfect. But here’s how to secure your child’s financial future.
If there was one thing my parents did right it was teaching me good money management. Of course, they did more than just that but it is one of the biggest things I’m thankful for now as an adult.
I strongly believe that financial education begins when you’re a child. Kids are observant. And they often pick up their parents’ habits without even realizing it. And those habits and ways of thinking about money are going to unconsciously influence the rest of their life.
That’s huge. (And to be honest, the thought sometimes scares the crap right out of me!)
I think that’s why I’m deeply thankful for the time and attention my parents spent in our financial education, outside of school. I want to offer you their roadmap on how they taught me good money habits growing up.
Lesson #1: If you want something, you have to earn it.
My parents were richer than I realized. Matter of fact, if you asked me as a child where I thought my family stood on the economic ladder, I probably would have said below average. That’s because my parents made me earn money if I wanted to buy something. No, I didn’t get an allowance. I earned money through doing chores around the house, babysitting and (later in my teens) getting a part-time job.
This established in me a good work ethic.
When doing chores as a child, like weeding or dusting, my mom would inspect the work. If it didn’t meet her high expectations (yes, she would push down the weeds in my bucket to make sure I had a FULL bucket) I wouldn’t get paid until it passed her inspection.
I truly hated this at the time but now I’m well-known where I work that I get things done right.
Lesson #2: How to be financially independent and to budget.
My parents were coming from a time that women were supposed to stay home, clean and take care of the kids and the men were the ones that worked and handled the money. But it was parents’ mission to raise financially stable, independent girls who could do it all if needed.
Even though my dad did the majority of the family finances, I remember my mother taking the time to learn how to do it as well in case anything ever happened to my dad.
I’m so thankful that they didn’t rely on the school system, my future husband or even just left it to me to figure out managing money!
Here are several ways my parents taught me about budgeting:
- When I was around ten, my parents took me to the bank to open a joint checking account.
- They taught me how to check my statement for inaccuracies and balance my check book.
- They encouraged me to save money for bigger items.
- In my early teens, they helped me open my Roth IRA and explained how compound interest worked.
- My mom would take us shopping and talk us through her purchases. Because my mother loved to think out loud and share, I learned a lot about justifying a purchase, frugality and what to look for when buying something.
Lesson #3: How to grow your wealth.
When I was in high school, my dad took me along to a motivational/sales/investing conference. I’m pretty sure my sister and I were the youngest ones there.
It was quite the experience watching Zig Ziglar speak. I don’t actually remember much of what he said but the feeling of motivation he exuded has stuck with me.
I mention this conference not because of the lessons it taught me but because it played a role in sparking my eagerness to learn. It’s important to find a way to get your kid interested in personal finance. My dad used that interest built up through the conference to get me excited to find ways to build wealth.
Since I wanted to learn more, my dad would show me his investments. He also gave me books like The Richest Man in Babylon and money management workbooks for teens.
My parents are still a source of financial wisdom and I’ll often call to get their counsel on financial decisions.
Lesson #4: It never hurts to ask.
I like to think my questioning skills are notorious with sales people and customer service.
Don’t understand how your mortgage works? Ask. Want to see if you can get a better deal on your insurance? Ask. Need to get to a bottom of a payment you can’t remember making? Ask.
Pick up that phone and call. Ask questions.
I can remember my dad doing this. He would be sitting at the dining room table balancing the checkbook and calling companies to make sure payments were right or to see if our monthly bill could be lowered. And it wouldn’t just be a quick ask and then if they say no just stop. He would ask for the manager. He would ask for different things if he couldn’t get the original discount he wanted. He would find a way to get the best possible deal.
Lesson #5: Have a growth mindset.
You may think, this is great but I don’t have this type of financial wisdom to depart on my kids. My parents didn’t either when they first started out. Everything they learned was from taking the time to ask questions, read books, and, of course, learn from their mistakes.
No one is perfect and that’s ok. When you lose money in the stock market or make a bad purchase (these things happen), look at it as an opportunity to learn from the situation and share it with your kids when they come of age.
Teaching your child to have a growth mindset, learn from mistakes in all areas of life can be one of the greatest lessons you can depart to your child.
BIO: Alicia Lawrence is a Pennsylvania-based marketing consultant and blogger. She was born and raised in Alaska, graduated college debt-free with three degrees, and now works as a marketing consultant in Pennsylvania. On the side, she writes about “adulting” on her blog DIYHomeHealth.com and owns a party planning business.