A friend recently said these words to me about his kids, “I wish I could fix it for them.” He wasn’t talking about person finance, but all of us who have children think about or hope that our children will be able to do better than we have ourselves. Yet, we live in a time where that looks less and less possible.
Here’s the good news: It is possible for your children to do better than you, but you have to give them the gift now.
The gift is experience with personal finance – before they start having the experience with credit card companies, kids of their own and that boss at work you just can’t like no matter what.
Start by getting everyone together at the family kitchen table. Tell them how it works. Show them what is important to you. Set a family plan together to save regularly and invest regularly. Make sure they know what is important.
Debt is the #1 killer of wealth-building in the middle class (especially credit card debt).
Let your children help brainstorm ideas on building a “higher” emergency savings fund (we recommend 15 to 18 months of expenses in money market savings and certificates of deposit).
Show your children that reducing debt and then eliminating debt is critical to jump-start the rest of your financial life.
Make sure they know the truth from the lies.
Here are some examples:
The money in your checking account is a money laundering account for other people’s money. Use any excuse to pull money from checking and push it to savings. That’s the truth.
It’s not what you make in your paycheck that counts; it is what percentage of your after-tax income is being saved and invested. That’s the truth.
Credit card companies want you to know how easy it is for you to have it all; this is the biggest lie of all.
Finally, build cash reserves and reduce and pay off debt. Your credit score becomes less important (and improves the most) when you have piles and piles of C-A-S-H. That’s because cash is king.
If your children don’t know what is important in personal finance, they will start out BEHIND like you and I.
Brainstorm with your kids about how to find extra money to invest outside of your ordinary income.
You can do this.
HELPING YOUR KIDS GET AHEAD
If you think I was born saving money, you are wrong. My own family didn’t believe in saving. They don’t believe in having a 401k. They have had “emergencies” all their lives. These emergencies always get in the way of saving money regularly. I was not brought up to save and invest regularly and I have made every mistake you can think about when it comes to money. My parents thought they were shielding me from the realities of bills and worry. In fact, they were isolating me. I learned nothing until I had made many of the mistakes they made. I have had to learn the absolute hard way how to get savings on track and make it a part of your life without killing your lifestyle. I have had to learn the hard way how companies mislead with marketing. It is my mission to share what I have learned about regularly saving with my own children and also share it with you. That’s why we have a lot of “free” (blogs like http://www.boostmywealth.wordpress.com and http://www.stickyasset.com/blog and groups on Facebook like “Coupons & Coupon Codes”)!
In this country we don’t do enough to teach our children about money, managing money, saving regularly (and automatically), compound interest and steady investing for a long-term future. As a parent, we are always concerned that they get a good education and go to a good college so they can make a lot of money or have a valued career path. The truth is that we could do our children the biggest favor and one of the best things by sharing with them sound saving and investing principles.
You can join our free Facebook group (or have your children do it, too) by searching in the Facebook bar on your “wall” for “Live The Lifestyle Your Family Deserves.” Click on “become a fan.” It’s free and it ties our free blogs into that group.
If you want to give your children the same information we are giving ours, you can purchase the only thing we sell on any of our blogs or groups. It’s called “How To Survive Any Financial Crisis” and you can get it for only $4.95 at http://www.middleclassmoney.com.
Thank you for reading our blog and good luck!
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“Coupons & Coupon Codes”
“Live The Lifestyle Your Family Deserves”
All on Facebook – join. It’s free.