Teaching your kids about anything in this world is difficult. Where do you begin? Do you start with “the birds and the bees”? Or, worse yet, how embarrassing is it when you discover your eleven-year-old knows more about the topic than you do?!
Should you start with math? Forget it. I haven’t added numbers without a calculator since 1986. And geography: I know I didn’t do so well in this arena, because my thirty-five-year-old daughter still thinks New York and Chicago are right next to one another.
And yet if we do not teach our children about finances and investing, where will they learn? Will they make the same mistakes we’ve made? And isn’t it our job as parents to prevent this from happening as much as we can?
If the answer is yes, if we’re given the mandate to teach our children how to manage their money, there is something that strikes me as of the utmost importance: we need to know how to manage our own money first. And that’s why you’re a savvy gal, learning here how to talk the talk and walk the walk of a smart investor.
So, how do you pass this knowledge on to your kids? Well, as I’ve said in the past, you must do your homework and keep learning about investing yourself. But there are also five key principles you can teach your children, nieces, nephews and grandchildren to have them stand in good stead in the years to come.
1. Source—Source means a simple recognition that we don’t always have control over our money, where it comes from, how much we make, etc. There are people who control this for us: bosses, parents, the government. So it’s important to teach your children that while they should be enterprising and industrious, there are some things they will not have total control over. And it’s okay.
2. Steward—in Biblical times, a steward was a manager. His job was to take good care of what his boss entrusted to him. For your children today, this means being responsible, learning to live within a budget, taking good care of the resources they have. It is an appreciation of what money can buy and recognition of what it can’t.
Teach your children to budget, to curb their spending. If you can do this in our society of “get it and get it now” advertisements, you will have done them a great service.
