What do you teach your kids about money?

edited November -1 in General
There is an interesting book on the subject called The Reverse of Spoiled

Interesting point are summarized here but the book goes extensively into details and there are interesting concepts about money killing internal motivation and replacing it with external money motivation which is not that good along the way. Money should be seen as a mean to accomplish great things and not as a end goal. Also, the most important thing to teach kids is delayed gratification. Never be the first to buy the Nintendo switch, never be the last. The 60/40% rule. Let 40% of his friends have it first so he learns gratification and how to hold his money to know if your kid really wants it and then help him buy the basic cost and pay any extra to get a premium brand.

A father’s letter to his kid: The 9 money and life lessons most people learn too late in life

On June 3, 2019, my wife and I welcomed our daughter into the world. She’s barely old enough to walk, so her job (mostly eating and sleeping) hasn’t changed much.

But, one day, she’ll need some money and life advice. As a father who has spent much of his career studying and writing about money, behavioral finance and business, this is what I’ll tell her:

1. Don’t underestimate the role of chance in life.

It’s easy to assume that wealth and poverty are caused by the choices we make, but it’s even easier to underestimate the role of chance in life.

The families, values, countries and generations we’re born into, as well as the people we happen to meet along the way, all play a bigger role in our outcomes than most people want to admit.

While you should believe in the values and rewards of hard work, it’s also important to understand that not all success is a result of hard work, and that not all poverty is due to laziness. Keep this in mind when forming opinions about others, including yourself.

2. The highest dividend money pays is the ability to control time.

Being able to do what you want, when you want, where you want, with who you want and for as long as you want provides a lasting level of happiness that no amount of “fancy stuff” can ever offer.

The thrill of having fancy stuff wears off quickly. But a job with flexible hours and a short commute will never get old. Having enough savings to give you time and options during an emergency will never get old. Being able to retire when you want to will never get old.

Achieving independence is our ultimate goal in life. But independence isn’t an “all-or-nothing” — every dollar you save is like owning a slice of your future that might otherwise be managed by someone else, based on their priorities.

3. Don’t count on getting spoiled.

No one can grasp the value of a dollar without experiencing its scarcity, so while your mother and I will always do our best to support you, we’re not going to spoil you.

Learning that you can’t have everything you want is the only way to understand needs versus desires. This in turn will teach you about budgeting, saving, and valuing what you already have.

Knowing how to be frugal — without it hurting you — is an essential life skill that will come in handy during life’s inevitable ups and downs.

4. Success doesn’t always come from big actions.

Napoleon’s definition of a genius is the person “who can do the average thing when everyone else around him is losing his mind.”

Managing money is the same. You don’t have to do amazing things to end up in a good place over time, you just have to consistently not screw up for long periods of time.

Avoiding catastrophic mistakes (the biggest of which is burying yourself in debt) is more powerful than any fancy financial tip.

5. Live below your means.

The ability to live with less is one of the most powerful financial levers, because you’ll have more control over it than things like your income or investment returns.

The person who makes $50,000 per year, but only needs $40,000 to be happy, is richer than the person who makes $150,000, but needs $151,000 to be happy. The investor who earns a 5% return, but has low expenses, may be better off than the investor who earns 7% a year, but needs every penny of it.

How much you make doesn’t determine how much you have, and how much you have doesn’t determine how much you need.

6. It’s okay to change your mind.

Almost no one has their life figured out by age 18, so it’s not the end of the world if you pick a major that you end up not enjoying. Or get a degree in a field that you’re not 100% passionate about. Or work in a career and later decide you want to do something else.

It’s okay to admit that your values and goals have evolved. Forgiving yourself for changing your mind is a superpower, especially when you’re young.

7. Everything has a price.

The price of a busy career is time away from friends and family. The price of long-term market returns is uncertainty and volatility. The price of spoiling kids is them living a sheltered life.

Everything worthwhile comes with a price, and most of those prices are hidden. They’re sometimes worth paying for, but you should never ignore their true costs.

Once you accept this, you’ll start to view things like time, relationships, autonomy and creativity as currencies that are just as valuable as cash.

8. Money is not the greatest measure of success.

Warren Buffett once said: True success in life is “when the number of people you want to have love you actually do love you.”

And that love comes overwhelmingly from how you treat people, rather than your level of net worth. Money won’t provide the thing that you (and almost everyone else) want most. No amount of money can compensate for a lack of character, honesty and genuine empathy towards others.

This is the most important financial advice I can give you.

9. Don’t blindly accept any advice you’re given.

All the lessons here, including this last one, are things that most people learn too late in life. But feel free to reject them.

Your world will be different from mine, just as mine is different from my parents. No one is exactly is the same, and no one has all the right answers. Never take anyone’s advice without contextualizing it with your own values, goals and circumstances.

Your parents love you. We are so happy you’re here. Please let us sleep.


  • edited November -1
    With money there is a balance between need and want. We addressed all the kids needs and addressed the wants on birthdays etc. We judges the value of the wants. We were much freer in providing the wants that we felt were more like needs. Examples would be sports equipment. Play station games and that stuff were the wants. Financially I was building up my income and working many hours so I was more prudent with my money. My children are in a better financial position than we were and more wants become needs. We also chip in and spoil the grandkids. My prime expense on them is college funds and taking them out for dinner. We spoil them with gifts that we see as needs more than wants and decide on birthday gifts etc that they may want but when choosing between items see what we think is a stronger need. So yes we spoil them but we can afford it. But they do not get everything they want. And principle like saving fro college are the prime part of our gifting. They also earn pocket money for chores
  • edited November -1
    Liked Buffets quote that he would provide enough so his kids could accomplish anything, but not so much that they would accomplish nothing...
  • edited June 21
    Good theory uncle and I agree. But the challenge is how you accomplish it.
  • edited June 21
    I don't know if this is controversial or not, but I've always thought public education should teach our kids about money. Money is not something to worship, idolize, adore, or condemn. It is just simply a system of exchange. And that we all need to learn how to use it. If sex is taught in our public schools, why not money? Teach some of the basics about cash, banks, investments, how much things cost, what kind of income that will be needed to make a living, etc. Also stress that learning how to read, write, and do math are the basic ingredients in making money. You don't have to be "rich" to live well, but living within your means is the primary fundamental to living well.

    Also, I think public educators should teach the kids who are not good at reading, writing, arithmetic, that not all is lost. They are not failures. You can still make money even though you are not that good at the basic things you are taught in school. Many who are not academically talented are good at working with their hands. You can still learn how to do things that benefit our society. I think kids who fail academically get a feeling of despair, and end up with a life of crime and/or government dependence.

    I suspect public educators are opposed to teaching about money; probably because it will train our kids how to succeed in the free-market system. To many public educators, the free market is an evil our kids should be shielded from!
  • edited November -1
    That is the difference between a “libertarian” and the rest of us. We care about money only as far as it helps us live a highly principled and quality life. Your concern is finding the best way to accumulate as much of it as possible no matter how it is achieved.
  • edited June 21
    A close 19yr old friend of mine did learn financial basics in HS which I was pleased to hear.
    How to balance a checkbook, budgeting, general investing, taxes, 401ks etc.
    So there are areas where this education is being offered.

    My Dad taught me my initial lessons about money.
    He gave me $100 to open a checking account. Taught me how to write checks and pay bills.
    So I paid my bills up to $100 and the account was gone. Forgot to teach the ‘deposit’ part I guess.
    Miss you, Dad.

    Still Grinning ;-)
  • edited November -1
    Dad also taught me about success.
    You can be a Janitor or a street sweeper if you want, but you better be the best Janitor or street sweeper out there.

    Still Grinning ;-)
  • edited June 22
    SCCRENDO, I have no idea where you get, "Your concern is finding the best way to accumulate as much of it as possible no matter how it is achieved," from. I previously stated money is not to be worshipped or adored. Money is to be used as a method of exchange. The more kids are taught this, the better off they will be.
  • edited November -1

    The spamming bot copied SCCRENDO post word for word and copied a spam link at the end
  • edited June 22
    ...hmm does that show that SCCRENDO's post is indistinguishable from spam? haha

    just messing with you SCCRENDO. :)
  • edited June 22
    Some on these threads think so.
  • edited June 22
    Money wont buy happiness
    But it will make a good down payment

    I would rather be healthy and rich
    Than sick and poor
  • edited June 22
    money doesnt buy personality
  • edited November -1
    No, but personality can make you rich
  • edited November -1
    The kids teach me.
    Think globally.
  • Nowadays it's important to teach our children the importance of money, and how to use them wisely from about 10 years old. For example, I am very thankful to my parents that they have taught me how to make money and their importance in my youth so even now during this difficult period I can live on my own without asking for help from someone. That knowledge that I have acquired from my parents in childhood helps me to pass through all the life which I meet. Now during this hard time, I decided to become a trader because thus I will be able to make money online. Now I am learning about contract specifications, and soon I hope to make more money because I use
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