The first step to teaching our kids about money
By the time you read this, my husband and I should be in the middle of hanging out on a different continent for eight weeks — with our kids. Allow me to digress for a few sentences before I get to the point of this article.
We started the adoption process two years ago. In October, 2012, we were matched with our children, and the weeks and months since then have been filled with waiting, paperwork updates, and more waiting. Finally, in mid-April (I am writing this 11 days before we're scheduled to leave), we will meet our kids for the first time. I don't know how other new parents feel, but it's surreal to me. We're so excited (and scared)! Okay, back to the article…
What we want for our kids
During the months of waiting, we've discussed many different aspects of parenting. Of course, only one of those aspects has a place on this blog and that is, how (and why) we will teach our kids about money?
Since our kids are in elementary school, they should easily understand financial concepts. However, despite being able to understand concepts, teaching them anything feels daunting, but we do have some aspirations.
We want them to be careful with money, but not so careful that they aren't generous to others. We hope they learn that money buys choices, but it doesn't buy happiness (or, does it?). We want to teach them to save for the future, but not to forget the present. And above everything else, people are more important than money.
You're probably thinking, “Hey, Lisa, you little idealist, you. That all sounds good, it really does. But how do you do that?”
I don't know. I am new at all this parenting stuff, okay? But we have some ideas.
First, they can never observe us being cheap. Frugal, yes, but not cheap. I have two memories burned in my mind from my childhood. The first was when a relative sent me and my cousin into the store to buy some milk. Since the sale price was extended to only two gallons, we were each supposed to grab two gallons, but go to different checkout lanes.
The second thing was when I observed someone abusing a 1-800 number. The employee's daughter called her on the 1-800 line just because it was free. Saving money was a good thing, but saving money at the expense of someone else really bothered me. And still does.
We will do our best to avoid modeling cheap behavior.
We will eventually share our family's budget with them. Our parents weren't transparent about their incomes or expenses. And I am not very open about my finances, either. I have nightmares of our kids telling their friends' parents about how much money we make or spend or give.
On the other hand, we think that being transparent about our budget will have four benefits.
- They will see that houses and cars come with a large price tag and maintaining them is expensive, too.
- We can discuss our charitable giving and how we decide which organizations to give our money to.
- We hope it will give them an idea on the process of running a household and being responsible with our resources.
- We hope that looking at a budget shows them we can have anything (with careful planning and saving), but not everything we want. Delayed gratification is not an easy concept, but it makes a big difference.
Save, spend, invest, and give. With all the money they receive, they will need to save, spend (if they want to), invest, and give some away. We're not sure if they will be given an allowance yet, or if we will suggest how much they should save or give.
A balanced life is valuable. We want our kids to enjoy working and earning money. But more importantly, we want them to understand that life is short. Enjoy it.
Menu plan, grocery shop, and cook. One of my greatest adult challenges is navigating the cooking obstacle course. How can nutritious meals be prepared inexpensively? How to menu plan and shop? I thought it would be fun to have the kids each plan one meal per week and go grocery shopping with me twice a month. It would give us an opportunity to talk about inexpensive ingredients that still give us a healthy, varied diet.
Develop an appreciation for simplicity. Both my husband and I grew up in large, farming families. We rarely went out to eat or on vacation. And when we did go out to eat, we were well-behaved because we got to have restaurant food! (Of course, we also were like the Beverly Hillbillies when we were out in public, but that's beside the point.) I could go on, but you get the idea.
We have a simple, rural lifestyle that revolves around our friends and family, our little farm and the outdoors. I don't our kids to feel entitled, so we plan on working and playing together, but not give them lots of toys. But I want to. I mean, we have waited on a long time for them, so I want to give them everything they could possibly want. I just know it wouldn't be good for them.
Teach them about how money works. And finally, we want to teach them how money works. Before they graduate from high school, we want them to understand how the stock market works, what compound interest is, how to save for retirement, avoid high-interest debt, and what diversification means.
Of course, we have some other challenges ahead of us. Because we need to take care of some basic needs, it may be awhile before we can start our kids' financial education. And when we do, I don't know how our financial parenting philosophy will work out. We probably won't see the results of our investment for two or three decades. We know we don't be perfect, but we hope we're good enough.
For those of you with actual parenting experience, which types of things do you recommend? Or what worked (or didn't work) with your financial education from your parents?