5 Secrets to Teaching Kids About Money

By | March 6, 2019

I have been told it is bad to start a post by insulting the reader but that is exactly what I am going to. So, if you’re like most Americans you aren’t very good with money. You also for some reason love Bud Light but that is for a different post.

I say this because of stats like these from Nerd Wallet showing just how much debt we are in. Or stats like these from The Street that shows we are woefully unprepared for retirement.

There. Now that I am done insulting you let me say something that probably won’t make you feel any better but need to hear. It’s not your fault. For some reason, many parents aren’t teaching their kids about money. Schools are teaching the Pythagorean Theorem instead of what compounding interest is.

Ok, I have to start this with a disclosure. I am not an expert, a financial planner, I have no degree or training in finance, I am so unqualified to give advice that my wife won’t even let me near our checkbook. Also, I have no idea what the Pythagorean Theorem is.

But I made a ton of mistakes with my money so here is what I learned.

5, There is no such thing as a free tee-shirt

Back when I was in college, yes I went to college and graduated, You couldn’t make it from one end of campus to the other with out being stopped by someone offering you a teeshirt if you to sign up for a credit card. 

A lot of people me included saw this and had one thought. I don’t have to do laundry! The fact that I was giving away my information and agreeing to pay some one an exorbinate amount of interst didn’t even occur to me.

Now I was one of the lucky ones. I didn’t get into debt. But many of my friends weren’t lucky. They saw this new ability to get the things they wanted right now and used it.   

It wasn’t until a month later when the bill arrived and they saw  that interest payment how much extra getting that thing cost them. 

To make things worse. The shirt that caused all this is now dirty so they still had to do laundry.                                                   

4, There really isn’t any type of good debt

The great secret. I don’t know why this is a secret but no one seems to be taught about this. We are taught debt is no big deal. Everyone has it, and it is necceassary for life.

Well, that’s a bigger load of bull than that coach that said I was going to be a great athlete. Seriously worst scout ever.

A lot of people say credit cards are evil. Well, like most inanimate objects They are neither good or evil. But they can quickly become something dangerous if used incorrectly.

3, Learn to wait –

It is our inability to wait that makes credit cards evil. We agree to pay extra for an item becauses we can’t wait.

I don’t know who said it, someone smarter then me and I know that doesn’t really narrow it down.) But debt is punishment for being impatient.

We build up debt because we can’t wait to buy something until we can afford it. Instead, we take out loans or use credit cards making the item cost way more than it would have if we just paid cash.

I’m not saying you can’t use credit cards or you can’t buy things just stop paying extra becasue you want it now.

2, You can’t have everything – opportunity cost

Opportunity cost simple means that if you spend money or time on one thing, you won’t have it to send on something else.

When I was growing up and through my college years I wasted a lot of money, and not a dollar of it was spent on anything I needed to buy. 

I bought DVD’s, fast-food, cd’s, coffee and of course lots and lots of beer. 

Every day I wish I would have saved or invested that money.The amount I wasted was staggering. If I would have been smart and saved all of that who knows I could be on a warm beach in the Caribbean typing this.

Instead, it’s 17 degrees out here in Michigan and it’s snowing. Again. I gave up that beach so I could watch The Matrix on DVD. Rule number one of having money is don’t waste it.

1, Retirement really isn’t that far away

This one was really hard for me to learn when I was a kid. Sixty -five felt so far away. I could save later. I wanted to have fun now.

Well, a few years have passed and I look at how much that money would have been worth if it was earning me money in an investment. It is going to cost a whole lot more to retire then any of us think. Start saving early.

When I was writing this I tried to take a look and find the most important bit of information I could leave you with. What I came up with is simple.

Show your kids the life you wish you could have. Then teach them what they are going to need to know to reach it. You might have to do some research or ask an incredibly unqualified but very good looking blogger.

But not teaching them, or hoping someone else does it isn’t an option anymore. If you don’t know, learn it and make sure your kids learn it to.

Now you know, and knowing is half the battle.

If you want to more about money and kids check out my post on How Kids are the Worst Tax Deduction Ever

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