5 Pieces of Advice to Tell Your Child About Money- Part 3

5 Pieces of Advice to Tell Your Child About Money is a series that will run every Tuesday for the next few weeks where some of the top personal finance bloggers share their thoughts on this topic. At the end of the series I will post my own 5 pieces of advice. The entire series can be found under Money Tips.

For those of you just tuning in, here is the background to this topic: One of the things that I am really passionate about is setting a good example for the next generation. It seems that so many kids these days have no idea about personal finance and have not been taught the skills on how to manage money for the future. Many of them don’t have to work hard for what they have and so they haven’t developed an appreciation and respect for money earned.

Last week  Jason at Frugal Dad shared his thoughts on this matter. This week I asked Tim at Canadian Dream: Free at 45 his opinion. Here is what he had to say:

1) Money is limited.  Contrary to what you might believe, adults don’t have unlimited amounts of money.  If fact, everyone has a limited amount of money that you will see in your life time.  So try try to consider that when you buy things.  If nothing else the pause of thinking about it might help you to avoid some fairly silly purchases in your life.  When in doubt save the money and come back the decision in a week.

2) Don’t fixate on money.  Money most of the time won’t buy you much long term happiness.  You have to do that all by yourself, so don’t fixate on how much you make or how big of a house you want, but instead fixate on working towards your dreams and doing what makes you happy in life.  By doing that you likely will find you don’t need as much money as you initially thought.

3) You are not a consumer.  Despite every news cast you will hear in your life, you are not a consumer.  You are a person and a citizen first and foremost.  You can be different than everyone else and actually learn to do something by yourself rather than just buying your way out of a problem. Also you are obligated to vote in every election that you can.  Why? Those people are spending your tax money, which is your largest expense in life.  Hold them accountable for what they do and if you don’t like any of them find someone to replace them or replace them yourself.

4) Learn about investing.  It is boring at times, but you can’t afford to trust a mutual fund salesman to look after your money for you.  No one will care more about your money than you, so take some responsibility and learn the basics.

5) Learn to ask for help.  Regardless of what you do, accept that we all need help at times.  So help others freely and receive help freely.  There is nothing in this world that some one some where hasn’t already likely tried to do.  So ask people you know, search the Internet and find the help you need.  Your social network will be worth more to you in your life than all the money you will ever earn.  Respect that and look after it.

Thank you Tim for participating and for your words or wisdom!

Stay tuned next week where we will hear from Frugal Trader at Million Dollar Journey and what he has to say about this.


Comments

5 Pieces of Advice to Tell Your Child About Money- Part 3 — 6 Comments

  1. Parents have an opportunity to discuss all these things with their children, but the example they show their children has a much bigger impact! The more you involve your kids in your everyday life, the better the children become.

    • @ Krant Cents I definitely agree. Actions speak louder than words. If we just tell our kids how to do something and don’t show them, then they are no better off. In fact, they may very well lose respect for the things you say because to them they will seem like fluff. I think the discussion of money management goes hand in hand with showing them money management techniques. What kinds of things have you shown your kids that seem to be working? Any tips to share?

  2. All good examples, and I really think it’s a matter of parents being engaged with their kids and taking an active interest in teaching – in actions by example, but also by words and converstaions. It takes both in my view, and while actions might be more influential, sometimes words and phrases can be remembered over the years.

    Also, it helps a ton if the parents themselves know that they’re doing. If they made mistakes, it can be helpful as they share their mistakes and guide kids to avoid making the same ones. If they’re still clueless as adults and parents when it comes to money, it’s going to be tough for kids.

    • @ Squirrelers All great points. Yes, leading be example is essential and keeping discussions about money flowing is also important. I agree- if a parent makes mistakes they should tell their kids so they can learn to avoid doing the same thing. Like you say though, if the parents have bad habits and no knowledge about money management than the kids are going to flounder too. Lets just hope these cases are few.

  3. All good examples, Miss T. And completely agree on #3. I cringe every time I hear that word tossed around on the news. It reduced *people* to a mental image of an empty bucket waiting to be filled.

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