Growing up I was like most kids, I wanted toys and games for presents. Looking back at all those gifts and toys, I don’t have anything to show for it. Maybe if I searched through my junk I could find a Ninja Turtle. Leonardo was my favorite, or as my wife would say “The blue one?”
Right now you’re thinking about the cost of all the toys you received and how you could really use that money now. Maybe you have kids and you’re thinking about all the small toys they have that they don’t play with. Those toys add up to a fortune.
Let me tell you what gift I still have and that has changed my whole life.
“The best gift I received as a child was my education about finances.” James Phillips
My Nana’s Teachings – My family was not shy talking about money, especially my Nana. She was very clear that I had to invest to win with money. Nana doesn’t give gifts like normal people. She gives gifts of company stock, so if you don’t have an investment account you’re not getting gifts from Nana.
She also taught us about giving at an early age. For Christmas my Nana has an interesting way of giving a gift. Her gift to everyone is a donation to the charity of your choice. This forced me to do my research on charities and their operations to make good choices of where to send my gift.
I don’t have the same stresses that most people have about money. I have fully funded emergency funds, retirement accounts, no credit card or student loan debt. I also pay cash for cars. My marriage and family is strong because we don’t fight about finances.
I know how debt works and how it can kill your dreams. I’ve seen families torn apart, marriages ended, and dreams crushed all because people didn’t understand the risks associated with debt.
“Is your spending worth more than your family?” James Phillips
I learned how to save and invest so I am able to deal with things when life punches me in the face. A couple months ago my wife was 9 months pregnant and our A/C went out (we live in Florida and it was 90º). I had to pay almost $5,000 to fix it, I paid with cash. I was complaining to a group of friends when one of my friends pulled me aside to humble me. He told me that everyone I was complaining to could not afford to pay cash to fix their A/C’s. (SMH)
You’ve never been taught about finances. You feel like you’ve failed with money. You’ve learned bad habits from your family. You feel like you’re drowning in debt. You’re living paycheck to paycheck. You have no budget. You’re not contributing to any savings or retirement plan. You don’t know what to do or where to turn.
A lot of parents are scared to teach their kids about money because they don’t know how to use it themselves or they are embarrassed of their financial situations.
Well, you’re not alone. I meet people all the time who never received the same gift I did.
Don’t worry, you’re in the right place and it’s not too late for you to learn. As you learn you can pass this gift to your kids or anyone you know.
First thing I do is talk about money. Money is not taboo in my house. How will your kids learn how to use money if you don’t teach them? Schools aren’t going to teach them the correct way. (My wife used to be a teacher and there are only a few teachers that know what they are doing with money.)
I have two girls and I have financial rules framed on their walls. As they get older we will study these rules over and over. Here is a version of their financial rules.
As my kids get older I will teach and include them in paying the household bills as well as our giving, saving, and investing decisions.
I do this for every holiday and birthday. If someone in my family would like to buy my kids toys or other gifts I require / (ask nicely) that they first contribute to their College Savings.
Yes my kids love toys and we have a ton. They enjoy them now, but when they get older those toys will be worthless. They will be much more grateful for the education about managing money (I know I am). They will be able to receive an education without tons of student debt. FYI, Student debt is an epidemic today and is the #1 reason people cry in my office.