Teaching kids financial skills

I am all for teaching kids financial skills.  Hell, I even preach it to whoever will listen. My parents taught me nothing, and I suffered for a long time because of it. The only reason I became financially astute, was because I was determined to prove to my Dad that I could be as good at reading and playing the stock market as he was.

Save money and be better off

Save money and be better off

I was 16 and angry when I started. Young, stupid, hot-headed, and desperate for parental approval.

Despite all of that, I did quite well, but I think that had far more to do with my abject stubbornness and being pissed off for a very long time, and needing to channel that into something else – luckily it was shares and the stock market. Rather than alcohol, and drugs or indiscriminate sex!

I read everything I could, even if I couldn’t understand it. I learnt about companies, and financial tools, and analysis, and company accounts.  I am by no ways  any expert, and I don’t know as much as I should. But I’ve been happy with what I’ve learnt, and I continue to learn as I go along, enjoying it more and more.

But that brings me to my point.  I would have done much better if I hadn’t have had to learn it all along the way myself. How to open a bank account, how to balance a cheque book, how to check my statements every month.  HOW to BUDGET!!!!

If you don’t teach your kids anything – teach them how to BUDGET!!

Better yet,teach them how to budget with money they have earned themselves.  Make them buy  mundane things like clothing, and presents for friends etc.

Once they get to Uni, make them show you a monthly budget, starting with them showing you their income and proposed expenditure. Make them explain why they are spending on frivolous things, and why on important things. Help them to think it through, work it out, and plan.

Don’t just let them flail about spending recklessly,  and prop them up with endless funds from the Bank of Mom. That’s not helping them, that’s enabling them, like giving drug addicts a drug, or alcoholics a drink. It’s not a good thing.

If you help them to learn good financial habits early on, then they will continue them into later life. ( well, that’s the theory).

Some things I learnt very late in life, and I’m paying for it now, but had I known it earlier, I would have done it earlier and been more financially secure.

As it was, I was lucky, I fell into a job I was pretty good at, and I found a company that needed my skills. It was lucky, because I had learned to save every penny I could incase I had to fall on hard times, which had happened to me a few times at University.

Eventually, I needed to use all my saved funds to look after my mother when she couldn’t afford to look after herself, and all my savings went to that.

Luckily I was good with money, because looking after my Mum meant I had to basically start again at 38, to save money and work on saving funds to retire on.  Back on the treadmill, and careful investing has started a little pot to grow, and I nurture it as it goes.

My point is, I had to learn it all myself, no shortcuts, quite a few mistakes, and lots of time.  My dad was a brilliant investor, and made loads of money, but he never took the time to teach me and let me understand his ideas and strategies.  He never taught me anything other than to communicate with my kids, because he never did, and I realised if I didn’t, they’d be as clueless at 25 as I was.

I talk to them about their choices, I make them buy their own items with money saved. I look at their budgets and discuss it with them, listening to their ideas, and offering options they might not have (if my daughter buys cheap pair of shoes with her money and they fall apart – I don’t replace them for her).

I discuss shares and investments with them. (They aren’t very interested in it yet). I explain the movement of the markets in relation to stupid political decisions, and I invest on their behalf. One day they’ll appreciate that.

So teach your kids, don’t do things for them. Let them make mistakes with their own money, not yours, and let them learn the expensive lessons and the effort required  – without your help.  Especially when they are young and you can save them.

Donald Trump was given $1 million, and still went bankrupt twice. I don’t think he was taught the lessons he needed to learn from his parents, but I do think eventually life taught him.

Life taught me, and whilst I’ll let life teach my kids too, I’m making sure I teach them some healthy financial habits too.  “Every little helps”.

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