I’m a huge fan of talking to kids about money (actually,
I’ll talk an adult’s ears off about money, too, if given half a chance
– I once lectured Matt
Pietrek and his girlfriend on the topic for an hour over pancakes
[sorry, guys…]). When I was growing up, the training I got in school
about money management has how to write a check, i.e. how to be a good
little consumer. I also learned the basics of compound interest, but not
as related to anything real, e.g. buying a house or saving for
retirement. Most of what I didn’t learn in school, I also didn’t learn
from my parents because one of them (who managed to buy high and sell
low during the recent market correction) isn’t any good at money
management and the other was very private about such things (although
has been opening up on this topic recently).
Me, I go the other way. While they know not to talk about it outside
of our immediate family, my kids know how much my wife and I make, how
much we spend month to month, how we’re saving for their college
education, how we’re saving for retirement, the investment property I’ve
purchased with my money-savvy brother-in-law (whose parents also refused
to talk money with him), etc. The Sells brothers have their own
allowance that goes up annually on their hire date aka their birthday. I
act as their bank, keeping track of their income and expenses in an
Excel spreadsheet as they deposit and withdraw money, limiting them to a
single week’s “advance” on their allowance (giving them the choice of
spending what they’ve got now vs. saving for what they want in the
future). In the future, I plan on letting them maintain their own
balance sheet (subject to random audit), like my Mom let me maintain
mine on a paper check register (I guess I did learn a little something
from my parents — come to think of it, the way I award allowance is
just like my Mom, too — way to go, Mom! : ).
Anyway, as open as I am about our money and as much as I bring it up with
them in an attempt to stamp the consumer culture out of my children
before it takes hold, there are still more things to be done, as I
learned this morning on
“the mint,” a web
site dedicated to what kids should know about money and how teachers and
parents can help. Check it out.
BTW, I’ve recently come to the conclusion that a parent paying for
their child’s college education is a sucker’s game, as it drains much
needed funds out of the parent’s own investments when it should be
enjoying the magic of compound interest. Instead, grandparents should
pay for college, letting each generation have another 20-30 years of
compound interest before skimming off the top for college. The problem
with this, of course, is that it requires one generation to pay for both
their kids and their grandkids to shift into this new thinking
(assuming, of course, that the parents can pay for their kid’s college
at all, which isn’t a given with our current consumer-oriented society).
I plan on being that bridge in my family, i.e. I plan to pay for my
kids’ and my grandkids’ college education. I also plan to have myself
cryogenically frozen, putting half of my money into a trust for myself
when I’m rejuvenated, leaving the other half for my wife. Neither of
these has anything to do with this subject, but I thought I’d stick them
on the end here anyway. : )
Discuss
