Teach Your Children Success

At least once a week I hear someone complain that our school system is bad.  Schools don’t teach our children real life skills.  I’ll politely argue that it has always been that way.  In the 20′s when my Grandfather was going to school and probably learning some of the same exact things they still teach today, I don’t think he was learning “real life skills”.  He was living on a farm.  Did school help him raise chickens?  Did school help him make cheese?  No.  That’s what his parents were for.  In this article I’ll focus on money because we’re in a recession and it’s important for the next generation to make sure this doesn’t happen again 70 years from today.

No secrets here

How can we teach our children about money if we can’t even talk about it?  If you’ve messed up financially, tell your kids what you did wrong.  If you’ve regretted missing an opportunity, tell them the story.  If they hear the narrative then they’ll be more likely to notice the warning signs and avoid disaster.  You don’t need to tell them what to do.  They’ll decide ‘what’ on their own so just show them the ‘how’ or ‘why’.

I purchased my first house much earlier than many of my peers.  When I was going through the process, I was in a book club with people much older than me who were impressed that I wasn’t scared at all.  But why would I be scared?  I knew every step of the process; I was involved when my parents bought and sold two of the houses we lived in.  I watched them negotiate with the realtor for the commission, get the house ready to sell, read through contracts and even watched a closing.  When I was sitting alone in the room with strangers and 1 inch worth of paper at my first closing, it didn’t matter that the only people I could call were currently outside of the country.  I knew what I was doing.

Lessons come from experience

While we can give stories, ultimatums, or demands, the real learning comes from real experiences.  So why not give your children some real experiences in an ideal bubble?  Let them learn the lessons before it means real trouble.  Do it when the pain they feel after losing $5 is equivalent to the pain you’d feel if you just lost $5 million.

A close friend of mine just finished reading The Millionaire Next Door.  The part that caught her attention the most was the discussion on the difference between children who grow into millionaires and the children of those millionaires.  Through the description, she changed the way she deals with her son.  He is only 4, so he certainly isn’t in a state to learn about options trading.  He is 4 so he was given 2 jars.  Every day he is given a nickel.  One day a nickel goes into the fun jar, the next day it goes into the savings jar. It’s a fun game to dig a shiny coin from mommy’s purse each morning  but he is learning that a little bit each day will turn into a considerable sum before you realize it.  Miniscule pains today turn into significant rewards tomorrow.

For Christmas, my grandmother gave two of my small cousins $20 and a promise.  She promised that they would come spend an entire weekend with her one at a time so they could decide how to spend their money.  The elder sister, Suzy, had her turn first.  She and Grandma spent a few hours in a store and Suzy really put a lot of thought into what she wanted most.  Once she picked the perfect set of trinkets, she and Grandma were off to spend the rest of the weekend having fun.  Next weekend it was Joey’s turn.  Within 15 minutes he knew what he wanted and spent every last cent.  Later they went to a baseball game.  Joey tells Grandma that he’d really like some ice cream.  Grandma asks him if he has any money left to buy some ice cream.  He shakes his head and says, “but I really want some.”  Grandma calmly replies, “well sorry buddy, how can you get some ice cream if you’ve already spent your money?”  Joey had to go without his ice cream and learned a good lesson in saving for the future unknown opportunities.

Become the teacher

You know your children better than anyone else, so only you can decide what they’re ready to learn.  If you’re having trouble coming up with ideas, talk with some of your friends to see what they do.  Watching your kids grow into adults who won’t need a financial umbilical chord is another step towards infinite happiness.