Kids, Wealth and Responsibility
Money means different things to different people. Some see it as a way of keeping score or measuring success. Others view money as simply a means to an end. In the pursuit of wealth, some have trampled their way to the top. Others seem to have glided there, nearly effortlessly.
In each of these extremes is a greater truth. Wealth magnifies your deeper personality traits. The thoughtful, caring person with access to financial resources will benefit him/herself AND others. But someone who only cares about keeping score will never have enough, regardless of the fortune amassed.
Warren Buffett, the famous investor and billionaire, once said that he intends to leave his children “enough money so that they would feel they could do anything, but not so much that they could do nothing.” He wanted to help his children reach their full potential, but understood that too much money, without corresponding effort, would sap their will to achieve.
Teach Your Kids – Prepare Your Heirs
A child growing up in a wealthy family may be more insulated from money than the child growing up in poverty. But at either end of the spectrum and at all points between, kids need to know how a family’s finances work. They need to understand that money really doesn’t grow on trees. Failing to instill that value young will create heartache when they’re older.
Teach your children that money isn’t inexhaustible. Rack up too many bills and the largest income won’t cover it. Amass too much debt and you’ll spiral down into bankruptcy. Teach them about responsible spending, investing, giving and earning.
Head off future family squabbles by talking openly about their future inheritance. Set up trust funds so that your heirs aren’t able to spend their entire inheritance before they’re emotionally ready to handle the responsibility.
Family Values – More than a Buzzword
With wealth comes responsibility. What does your spending say about your values? If your teenage daughter wants the biggest blow-out party to outdo her best friend, is that a wise use of money? Your son wants the fast car or the “crotch rocket” to impress his friends. But in the hands of an inexperienced driver, you know that’s a recipe for disaster.
What are your family’s values? What do you do and talk about as a family? Do your kids see you being generous to those less fortunate? Do you involve them in the process? Don’t just tell them about responsibility, model it and involve them.
Money is not a game, where the man with the most notches on his belt wins. No, it’s a means to achieve larger and greater things in life. Keep this in perspective and your family will benefit now and in the future.
What money lessons have you taught your kids? And how did you go about it? I would love to hear your answers in the comments below.
This article was written by David B. Bohl - Husband, Father, Friend, Lifestyle Coach, Author, Entrepreneur, and creator of Slow Down FAST. For more info visit his blog at Slow Down Fast blog.
Learn how I found happiness and meaning and how you can too. Get your FREE copy of my e-book by signing up.
7 Comments
June 13th, 2008 at 9:53 am
Nice article.
I teach my kids about money in several ways. First by our (my wife and I) actions. We try to follow a strategy of being careful with our spending, and hope that they see this as not being able to get everything they want. We also give our money to different organizations - this is an area I don’t think they see enough of and don’t really appreciate at all - work needs to be done here. Currently we don’t give an allowance (we’re considering it). We also have the kids money ini savings accounts, and they are aware of how much they have. We have talked about investing a bit with our oldest child (13). The more I look at this, I see there really is a lot more we can do. Thanks for sharing this, hopefully it’ll spark some ideas I can share with my familiy.
[Reply]
June 13th, 2008 at 11:05 am
I completely agree that it’s important to teach your kids about family finances. I heard that Warren Buffett bought his first stock at age 11 and he regrets not having started sooner. All children should be taught the miracle of compound interest! Also, little entrepeneurs (lemonade stand, baby-sitting service, lawn mowing service, and so on) make the great business leaders of tomorrow.
Marelisas last blog post..Share the Love Friday on Marelisa-Online Abundance Blog: Week of June 9th, 2008
[Reply]
June 14th, 2008 at 6:32 pm
Hi Peter,
It is a very useful article by David.
It is utmost important that we teach our kids about finacial intelligence.
Gifting a small piggy bank when they are young to save and opening a personal savings account in a bank when they are eligible, are simple steps to teach our kids on finance.
Thanks for sharing.
Best Wishes,
Kannan Viswagandhi
http://www.growing-self.blogspot.com
[Reply]
June 14th, 2008 at 10:45 pm
I don’t have kids, but I have a lot of respect for the way that my parents introduced me to finance. Without going into details, they made sure I knew that investing was what you do with your savings. They were also very clear that as parents, it was their responsibility to take care of my needs while I was underage, but that once I was an adult, it was my responsibility to take care of myself.
[Reply]
June 15th, 2008 at 9:31 am
Hello!!!
You have no idea how much of an inspiration you have been!! Thanks for the help many a times in these past few months especially!!
[Reply]
June 19th, 2008 at 7:57 am
Hi, David;
What an important article. Money and finances is a topic which should be required learning at school, and an integral part of family planning and teaching at home. No one can say money isn’t important, because it is - it’s vital to survival in our society.
How many countless parents have inadvertantly done their kids a disservice by not sharing money skills…either because they are ashamed that they themselves don’t have any, or because they believe that money is ‘not something you talk about.’
Financial acumen is a basic survival skill.
My daughter will not be treated to the same ignorance I was - she will be able to support herself, and THRIVE, by the time she is old enough to be out on her own.
Thanks for this clear reminder, David - hopefully it will help many people! The more we talk about it the better it will be for everyone.
Success to you always,
Shauna
[Reply]
July 1st, 2008 at 7:41 am
I totally agree that it is very important to teach kids the sense of family values & finance.
Thanks for the reminder.
Eugene Williams | Power of Motivation BLOGs last blog post..The Power of Belief
[Reply]
Share your thoughts, leave a comment!