I made mistakes along my financial path but have emerged in my early 50s with enough money to live happily the rest of my life.
My 4 kids are still in grad school/college/high school. As part of their financial education I gave each of them $2500 a couple of years ago in an investment account. They were to research the market and decide their investment vehicles. We have a gentleman’s agreement that they will not withdraw the money to spend. And each month we would publish the total amount, monthly interest rate, etc in a rankings format amongst them.
This spurred a fun competition. I wanted them aware of the markets but more importantly of the idea of saving.
On average they are up to about $3,500 each at this point In their competitive account. Each of them have created new investment accounts to put in the money they make from jobs and other sources (so as not to throw off the numbers in their competitive account). I offer to match their earned income from jobs with contributions to their Roth IRA as an incentive to work (and as a prelude to them understanding the importance of “employer matching” in the future).
As a result my kids have an unusual perspective of money for their age of mid teens to mid 20s. They see it as something they need to build and control rather than having their life controlled by their finances.
Teach your kids not to be enslaved by money, but to make money work for them. My competitive accounts cost me $10,000 for 4 kids. That may seem expensive or “wasteful.” But compare that to cost to send 1 kid even to a state school for 1 year. My kids have learned what saving money can do, and to control capital. They have learned about different investment vehicles, diversification, risk, tax implications of different investment vehicles, how to place orders with a broker, etc. If they screw up, they personally lose money and their siblings give them a good natured roasting. The only way the lesson could have been more powerful is if they had made the original money themselves, but their secondary accounts accomplish that.
Every family is different, but I thank God I have been in a position to pass on lessons to my kids, and for my life and this great country we live in.
I made mistakes along my financial path but have emerged in my early 50s with enough money to live happily the rest of my life.
My 4 kids are still in grad school/college/high school. As part of their financial education I gave each of them $2500 a couple of years ago in an investment account. They were to research the market and decide their investment vehicles. We have a gentleman’s agreement that they will not withdraw the money to spend. And each month we would publish the total amount, monthly interest rate, etc in a rankings format amongst them.
This spurred a fun competition. I wanted them aware of the markets but more importantly of the idea of saving.
On average they are up to about $3,500 each at this point In their competitive account. Each of them have created new investment accounts to put in the money they make from jobs and other sources (so as not to throw off the numbers in their competitive account). I offer to match their earned income from jobs with contributions to their Roth IRA as an incentive to work (and as a prelude to them understanding the importance of “employer matching” in the future).
As a result my kids have an unusual perspective of money for their age of mid teens to mid 20s. They see it as something they need to build and control rather than having their life controlled by their finances.
Teach your kids not to be enslaved by money, but to make money work for them. My competitive accounts cost me $10,000 for 4 kids. That may seem expensive or “wasteful.” But compare that to cost to send 1 kid even to a state school for 1 year. My kids have learned what saving money can do, and to control capital. They have learned about different investment vehicles, diversification, risk, tax implications of different investment vehicles, how to place orders with a broker, etc. If they screw up, they personally lose money and their siblings give them a good natured roasting. The only way the lesson could have been more powerful is if they had made the original money themselves, but their secondary accounts accomplish that.
Every family is different, but I thank God I have been in a position to pass on lessons to my kids, and for my life and this great country we live in.