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5 Things My Wife and I Want Our Kids to Know About Money

By JLP | April 10, 2008

This is the first ever post collaboration between my wife and me.

Last night my wife and I were talking about this blog. On the spur of the moment I grabbed a piece of paper and told her I wanted her to help me write a post. For some reason the number five and the word “kids” popped into my mind so I said, “Let’s make the post about 5 things we want our kids to know about money.”

She agreed.

So,… here are five things my wife and I want our kids to know about money:

1. Give away at least 10% of your money away. I use the 10% figure because that represents our tithe, which in my opinion, is the least amount that we should give away. Giving with the right attitude reaps amazing results.

2. Save at least 10% of your money and invest it wisely. Take advantage of tax-deferred growth by investing in your company’s 401(k) plan or other retirement plan and don’t forget about a Roth IRA.

3. You don’t have to spend your money as soon as you get it. Plan for purchases. Set goals and work towards those goals. Remember that there will always be something you’ll want so don’t make buying things your number one priority.

4. Along with point three, other than a car or home purchase, save up for whatever it is you want in advance. When buying a car, don’t buy the most expensive car. It’s okay to drive a cheaper car. People who might make fun of your car probably don’t have any savings to speak of. Also, don’t let some salesperson talk you into buying something that you’re not comfortable with. If your gut is telling you that you shouldn’t be buying it, LISTEN to your gut! Finally, just because a salesperson tells you can afford something doesn’t mean you can actually afford it.

5. The sooner you figure out what you want in life, the better. Don’t waste a lot of time and money switching majors in college. Just because you major in a particular subject in college does not mean that you have to take a career in that subject-area.

Bonus:

Don’t count on an inheritance. We aren’t saying that you won’t inherit anything—just don’t plan on it. We want you to be successful and make your own way. Any inheritance will just be icing on the cake.

Like everything, I’m sure I probably missed something so if you have something you would like to add, please leave a comment. What things do you want your kids (or grandkids) to know about money?

Topics: Kids and Money | 13 Comments »


13 Responses to “5 Things My Wife and I Want Our Kids to Know About Money”

  1. Mr. Stupid Says:
    April 10th, 2008 at 11:53 am

    I suppose what I want my kids to know about money depends on their ages.

    For example, my oldest is 6. Right now, she wouldn’t understand what 10% is. But what I want her to know right now is where money comes from (how you earn it) and what it is used for (clothes, food, shelter, WebKinz).

    By the time she’s, say, 8, she should be saving 10% of her money. By the time she’s 20, she better figure out that she shouldn’t count on an inheritance. :)

    Mr. Stupid

  2. L. C. Burgundy Says:
    April 10th, 2008 at 12:30 pm

    My opinion is that #2 comes before #1, and that your #1 shouldn’t necessarily be to a religious institution (as “tithe” implies to me).

    Otherwise I agree.

  3. JLP Says:
    April 10th, 2008 at 12:37 pm

    L. C.,

    For our family, #1 comes before #2, but the order really isn’t that important. Also, I tried to make it clear that our family tithes. These are the things we want our kids to understand about money.

  4. Ron@TheWisdomJournal Says:
    April 10th, 2008 at 4:29 pm

    Great, great post. We desperately want our children to understand these points as well. I just hope they listen! Unfortunately, I didn’t…

  5. Thorne Says:
    April 10th, 2008 at 4:41 pm

    Right now I would say right now the tithe is a very bad idea. So much of it is going to defense for Priests and other clergymen who molest little boys. So by giving your tithe you are in fact supporting homosexual molestation.

  6. fathersez Says:
    April 11th, 2008 at 3:33 am

    I like the way you have phrased the last statement on inheritance.

    We have always told our kids that my wife and I will “jolly away” whatever we have.

    It is clear that your approach is better.

  7. SomeGuy Says:
    April 13th, 2008 at 3:02 pm

    I like your idea of a simple list. Not everyone is going to agree with giving away 10% but certainly the sentiment is fantastic. I always think of “The Million Next Door” and how almost all of them opted to collect their reward for participating versus donating to charity (an option offered by the authors). I think in today’s world with an unknown future for Social Security the savings number should be 15%, not 10%. It’s so much easier to start out saving a good chunk of income versus increasing it later on.

    I also had a post along similar lines on my blog recently (Hunting Happiness). The Economist ran an article about personal finance literacy–or lack thereof–including some interesting arguments and fascinating facts. For example, one third of Americans with revolving credit card debt have no idea what their interest rate is! All the more reason to make sure your kids grow up educated on personal finance!

  8. Arlene Says:
    April 14th, 2008 at 10:46 am

    This is a great list — our family tithes and gives offerings, too (and since we’re not Catholic, our money doesn’t go to priests but to our own local church, so we’re not “supporting h*mos*xual m*lestation” — what a comment! *rolls eyes*)

    I don’t think there’s anything my husband or I can add to this that you haven’t already thought of. Thanks for sharing :)

  9. Constance Says:
    April 15th, 2008 at 10:50 am

    I agree with your list. Tithing is #1. Recently I’ve learned not just to give my tithe to the church but to indidividuals also.

  10. Judy Woodward Says:
    July 2nd, 2008 at 3:27 pm

    With regard to teaching young children about money, a great game I recently heard about is called “Mashed Potatoes”. You explain to the child that Mashed Potatoes represents something we Need to survive as it provides nutrients for our bodies, and that Gravy represents something that may make the mashed potatoes taste better, but it isn’t something we NEED to survive. You have then shown the difference between a WANT and a NEED. The next step is to create flash cards or cut out pictures from magazines and have the child yell out MASHED POTATOES for something that represents a NEED or GRAVY for something that reprsents a WANT. It is a fun way to begin the process of financial literacy.

  11. The Rogue Parent Says:
    August 19th, 2008 at 8:52 am

    Great article JLP. I like the importance you place on planning. I think one thing I would add to your list is how to actually understand money & how it works. There’s a great book by Robert Kiyosaki called “Rich Dad Poor Dad” that goes into the difference between working hard for your money and working to make your money work hard. Check it out. Our kids are not going to have the employer/employee relationship that many of us have and will need to really understand the concept of money and financial intelligence.

  12. Parents of Three Says:
    October 25th, 2008 at 4:21 pm

    I think we have to believe that we are already “giving to the poor” through our taxes. While it was true that people in Biblical times DID pay taxes (as is every minister’s answer to this point), the taxes did not go for social programs, food stamps, free college tuition programs, free transportation services for the poor and elderly, unemployment benefits, disability benefits, Medicaid, and charity hospitals and all of the social service programs which are available today. I’ve worked in the social service programs, so I know that there are numerous programs in place to help those who wish to help themselves. I believe in volunteering and giving additionally if possible, but I do not believe that with all the social service programs today, we are already “tithing.” The rest are great idea, and it’s certainly okay to give another 10% in addition to all the other taxes you pay if you are able to afford it.

  13. Parents of Three Says:
    October 25th, 2008 at 4:23 pm

    Correction to above post:
    Sentence should read: “I do believe with all the service programs in place today that we ALREADY tithing.

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