I am the proud parent of three growing independent-thinking kids. No not the ones pictured, although I picked the pic 'cause it reminded me of me in High School. My parents did a lot of things right bringing up my brother and me. I wouldn't be where I am without them, especially my Mom, believing in me.
However today the one thing I look back on and wish I had a better understanding of personal finance when I was younger. Today, I understand why; my Mom was just trying to make ends meet, and given my award winning personality from 13-17 I probably wouldn't of listened, because I was lucky...I already knew everything.
Our kids though will leave the house with these lessons understood and hopefully better prepared then I was.
Ten Personal Finance Things Every Kid Should Know:
- You Can be a Millionaire - If you start right away save $10K for 5 years, NEVER add to it again, get 8% average ROI, in 40 years you will have over $1 Million. Its not sexy, but it is math
- Tomorrow Gets Here Fast - The Power of Compounding is your best buddy and worst enemy. Start the same exercise 10 years later? You've blown nearly $500K! Do it now, do it every year and you can achieve wealth unlike anyone ever in our families history.
- Spend Less then you Make - A debt never earned is a life lived without debt chains
- NEVER buy a Depreciating Asset on Credit - And don't ask your Dad why he bought a Corvette when your Mom was 6 months pregnant :)
- Use Cash When you Can - It isn't old fashioned, and it will ensure #3 is a reality!
- Have a Success Plan - This is a plan this is always changing and at least 3 steps ahead. Never get to a space that makes you say "Now What?"
- Own your Things, Don't let them Own You - Life is too short to pay for a meal for four years! Do you really need the Pool Table or do you want it. Know cold Needs, Wants and Desires. Address them in that order!
- Know how to Balance a Checkbook, Without using Quicken! - I still do pen/paper as well as MS Money, and I have found errors both ways. Often from the banks side. But I knew when the bank messed up, and I got my money back. I wonder how many people miss those charges. Learn the basic terminology of money and don't be afraid to ask questions! The only dumb questions are the ones never asked!
- Only do Something you Love Doing, Regardless of the Pay - Even if it means not making as much money as someone else. Fifty years of hateful toil isn't worth it. And many who don't follow their love spend the extra to feel better anyway!
- Never Accept Less than what you Deserve - Whether it is a deal that wasn't handled right, or a job that isn't working out, in a positive way, you have to ask for what you want, you just might get it!
There are many more, but just think how much better off many of us would be debt-wise if we internalized these lessons! I know I would be in better shape. And isn't that what parenting is all about?
8 Comments:
Wow, this makes for some great fantasy.
Whst kid is going to have $10K a year to save for five years? What adult hamburger flipper is going to be able to save that much?
What adult hamburger flipper is going to be able to spend less than he earns? Who could do it if they have student loan debt and high medical expenses?
If hateful toil is the only work you can get, so you really have any choice?
Minimum - That's really not the point. The point is to start to save early and as much as you can. It was called you CAN be a milionaire, not you WILL.
Second, Whether you are flipping burgers, working at the mall, digging ditched, giving blood, you can live on less then you earn. There are planty of stories about living on less than $10k a year. At $8/hr minimum thats $16k a year. Not a lot, but you can live with room mates and make it. I lived on minimum wage in Los Angeles in the 90's. Not fun, no extra money but did it.
If you have high medicals bills, student loans AND flip burgers. Your right it would be beyond tough. Hard to believe someone with a degree in a regular sized city, with unemployment less than 5% can't find a job making more then that, I would believe that their are some potential other issues then.
I have to ask; through many comments you have been really negative about job prospects, the value of your education and your prospects, if you want to share your current issues there are a ton of great people that comment here that might be able to give you some advice that could help.
nice tips...i've heard about it. thank, i wanna try this also.
Welcome nUUr!
No Problem and thanks for commenting!
RacerX - Terrific list! I especially like knowing the difference between needs, wants, and desires. I also like "do something you love," in regards to work. My oldest son graduated from college with a degree in graphic design - but chooses to be a tattoo artist, something he LOVES! As his mom, of course I worry sometimes about his non-traditional career path. But you know what? He is extremely ambitious, frugal, and high energy. He is capable of growing this thing into whatever level of success he desires. And what more can a mom ask - than having a son doing something he loves & making people happy! Terrific post RacerX!
Oops - I forgot something! Bravo on the compounding interest part, too. I have been preaching that to my boys since they were 12 years old. It's never to early to start saving/investing and we need to all get that message out to the young!
I got more - the youngest son flipped burgers for Burger King in high School and stashed away 8K in a year. Not quite 10K - but anything is possible if you set your mind to it! I'm done now - have a good day RacerX!
@Dawn - That's great! Your kids are so on the right path! Starts with a great Mom!
Thank you for being a superstar for my blog!
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