Parenting Tips Around Money

Hey, what's up everyone and welcome to the School of Personal Finance. In this video, I'm going to be talking about parenting around personal finance. I'm going to give you seven tips that I think we should be teaching our children, along with seven tips of things that I think all of us as parents should be doing for our children. And now, full disclosure here, parenting is hard. I have three kids. I have a 12 year old, a seven year old, and a two year old. And in no way do I think for a second that I know what the hell I'm talking about. So please, with this video, take my advice for what it's worth. I try my best. I think all of us as parents try our best, but in no way am I telling you how to parent or think that I know better than you, because I don't. The great thing about parenthood is that, you know, you're learning every single day, but I question 99% of the things that I do as a parent. So it's a wild ride. It's fun. And this is just meant to be some advice that I've learned as I've gone on, and hopefully you will find it helpful. Let's get to it. All right. So for the first thing that I think we should be teaching our children from a young age are the skills of sales and negotiation. These are two of the most important skills that you could have throughout your lifetime. So to teach them at a very young age, I believe is a great idea. So if your child comes up to you and they want you to buy them a toy, or they want to spend money on Xbox or whatever it is, I always lead with, tell me why I should. Sell me on it. I want to hear why I should invest my money into whatever it is you want me to buy. Give me a good reason. Don't just buy it for them. Make them tell you why you should buy it for them. Make them convince you on why it's a good idea that you spend your money on whatever it is that they want you to purchase. And if it's something that I'm going to get for them anyway, or if it is something that I'm going to buy, then I'll always come back with a lesser amount. I'll try to make them negotiate with me. So if they want something that costs $10, I'll say, well, I'm only giving you $5. Where's the other $5 coming from? And see how they come back. So negotiate as well. Make them sell you and negotiate with you. Number two is we need to be teaching our kids about money from an early age. So even if it's the very basics where it's the coins and how much they're worth, the dollar bills, credit cards, what they are, debit cards. I mean, if you ask your kid, I have a daughter who's now seven. The first time I asked her when we went to the ATM machine and got money out and I asked her, you know, where do you think money comes from? And she really thought that you could just go to the bank, you know, putting your card and it spits money out and you could get as much as you want. So when I started to explain to her that I need to, you know, earn that money or that I need to put my own money in the bank and I'm taking my own money out, she didn't really get it. She just thought that anybody could go to the bank and take as much money out as they want. So it's good to teach these kids from a young age, how it all works, because then they can start to put the pieces together as you evolve with things that you're trying to introduce them to. And then number three is teach them prices and value. So I make it a point to always talk about how much everything costs that we're buying. So if we go to the grocery store, I'll point out how the name brand items are much more than the generic brand items. If we go out to dinner, all the prices that are on the menus point everything out. Whenever we're buying anything, you know, I'll ask them, how much do you think that costs? And do you think it's worth it? So they start to get, you know, an idea of what things cost in the real world and the value of money. And then for number four, we should be teaching our kids where money comes from. What do we have to do in order to earn that money? This way when we're out and we're shopping or we're spending money on things, they can put the dots together that, you know what, I had to go to work for a full eight hour day and I made a hundred bucks. And now you want me to take you out to dinner where we're going to spend a hundred bucks. So is my whole day of work worth us going out to dinner for an hour and spending all the money that I had to sit through work for a day? Just so they could start to realize, you know, that money doesn't grow on trees, that we actually have to work and earn the money in one way or another. And then that money is what we're able to then spend. And then the fifth thing that we need to be teaching our kids is that it's always people over things. It doesn't matter what sneakers you're wearing or if you have Gucci slides on or what kind of car your parents drive or any of that stuff. It just doesn't matter. We need to get that into our kids' heads from a very early age so that they don't get caught up in who has the latest iPhone, who has this and who has that, and mommy I want that, all my friends have this. It sucks and everybody, you know, falls victim to it. So it's something that us as parents have to deal with on the daily. So it's better to just always, you know, have a united front with your significant other and just be like, that stuff just isn't important. Like yes, you want your kids to have nice stuff, but the last thing we want to do is spoil them, make them feel like they're entitled to that stuff. It's just not a good way to go. So people over things, what's important are having great friends, great relationships with people, and the stuff that they own, it just don't matter. And then the sixth thing we need to start teaching our kids is around saving and investing. So just simple things like how a savings account works, how interest works, how compound interest works, how if you, you know, invest money that it could grow for you in the future and you could end up having a lot more money. So savings and investing is something that children aren't really taught at all in school. So we need to be the ones that are teaching them from a very young age how all that stuff works. And then the seventh and last thing that we should be teaching our children is that you need to be giving more than you're taking. You should always be adding instead of subtracting from a relationship. So you want to be helping others, you want to be doing good things for others. You don't need to hoard what you have, you don't need to, you know, not share, not give people things. Sharing is caring. So give more than you're taking. And now before we get to the seven things that we can do as parents to help our children out, please subscribe to this channel if you've not done so already. And if you're enjoying this video, hit that like button. It helps tremendously with YouTube, showing my videos to more and more people. So just take a second to do that if you're enjoying it. Thanks. All right, so those were the seven things that I think that we should be teaching our children around money and personal finance. Now these are seven things that I think that we should be doing with our children around personal finance to help show them the way. So the first thing that you could do starting right now is to save towards a big item that your child might want. Save together with them. So what I mean by that is if they have a purchase, if they have some material thing that they want, that's a bigger ticket item, maybe it's a hundred bucks, maybe it's a pair of Jordans. If that's what they want, then teach them that they need to save for it and maybe kick in some money towards it. So any money they save, you'll match for it. And then give them chores, do things with them where they could earn some money in order to save enough to buy those sneakers. Don't just buy them the sneakers, right? Have a goal and make it take a little while to achieve that goal. So if they do their chores, if they clean their room, if they do their homework, if they read a book, whatever it is that you're willing to give them money towards, lay it all out and save together for that goal. Track it together, write it down on a little piece of paper how much they've earned, put it in a little piggy bank, and then once they've reached that moment where they have enough money to buy the Jordans, then take them to get the Jordans. But make it a process. Don't just go out and buy it for them. The second thing that we should be doing as parents, and I'm sure that you all know this, is getting good at saying no. You have to be good at saying no. If you say yes all the time, then our kids are going to walk all over us and it's not going to be pretty. So I've got them very good at saying no. And one piece of advice that we also should be doing and getting good at is setting our child's expectations. So if we have to run into a toy store to buy a gift for a relative, or whatever the case may be, prepare our child for the situation that they're about to walk into. It's like, hey, we're about to walk into the store, but we're not here to shop for you. We're not buying anything here. You could touch stuff, you could play with stuff, you could do whatever you want with the stuff in the store, but we're not taking anything home. We're not buying anything today. That way you're not in the store looking around like, oh, I want this, I want that, pulling everything off the shelf, begging you to go make the purchase. So always try to set the expectation before you walk into the situation. And now the third thing that I try to do as a parent is I don't say that we can't afford something. So like, for example, when my seven-year-old daughter is watching the YouTube video and there's, you know, a kid driving a Lamborghini and she's like, Daddy, I wish that you would go get a Lamborghini. I don't go by saying, oh no, we can't afford that. Instead, I'll say, you know what, I would much rather spend the money on that for something that we value, for something that is going to advance our family forward. Maybe I could spend that money on you going to college or when you get married, paying for a wedding. There's so many other ways that we could spend that money rather than purchasing a Lamborghini. And it doesn't just have to be on very big ticket items. It could be on, you know, clothing, on all that stuff. If it's something that I'm not willing to purchase, that I don't think is worth it, that's very expensive, then that's how, you know, I'll counter with them. I won't say, no, we can't really afford that pair of sneakers. It'll be like, you know, it's just not worth the money. There's other ways that we could spend that money that's much better, much more aligned with our values and our family rather than, you know, spending it on this pair of sneakers. It's just not worth the money. And then for number four, for things we should be doing as parents is leading by example. So like, if you're having Amazon boxes shipped to your house three times a day and you're always buying yourself crap, then how could you go to your kids and say, oh, sorry, you know, we're not, I don't want to get that for you or you can't get anything, but I'm just going to keep buying things for myself. It's just a very bad example for your children. And another thing is being generous. Make sure to be generous around your children very often. So when you're in church and you're putting money in the basket as it comes around, have them put the money in there. Or if you're helping somebody out, just make it known that this is something we do all the time, that we're generous with people, that we help other people out, that it's not all about money, that it's really about relationships and helping people and being generous. And then number five for things we should do as parents for our kids, and that's open up a bank account and a brokerage account for them at a young age. So I think that my son was somewhere maybe like seven years old when we opened his first bank account for him. And we used to take, you know, all the he would get from birthdays and Christmas and everything and go deposit it into the bank. And we would make an event out of it. So as he would save up change and everything, we would bring it into the bank or had any extra money, we would go to the bank to deposit it, see how much he has in the account. And then as he got older and there were things that he wanted to start purchasing, I would let him start to take withdrawals from the bank account, you know, for small items. So we would actually go to the bank, take a withdrawal from the bank. I'd show him exactly how much he has starting out after the withdrawal, how much he has left and let him know, you know, if you continue to do this, you'll eventually have no money. So you either have to find a way to get more money in here or not take withdrawals or else, you know, the money's going to disappear. Now, the interest rates have been so low that the amount of interest that they earn in there is literally a penny, you know, every month or so. So that doesn't have a big impact, but at least he's learning how bank accounts work, where he stores his money, how to take a withdrawal, how to make deposits, you know, basic skills that he's going to need as he starts to get older. And then we can introduce a debit card, credit cards as he gets a little bit older. And then as far as brokerage accounts, there are so many different online brokers or apps that you could use where you could start buying shares of stock with, you know, very small amounts of money. So it's just good as a learning experience to get them in the habit of understanding how that works. And then you could check how the stocks are doing, how their account is doing right on the phone. You could show them, be like, oh, you know, the stock market was up today. You made a few bucks on Disney stock or whatever stocks they are. You could buy a few shares and then just continue. And then they'll have that as they get older as well. But it's just a good way to introduce it to them and for them to learn. And, you know, you don't have to be a great stock picker. You could pick companies that they know and understand like Apple and Disney and Microsoft, things like Amazon, all the stuff of, you know, for companies that they use their products. It's a good way to at least introduce them to it. And they'll start tracking it and understanding how the stock market works. And then for number six, which I think is a good idea. And I don't know if you'll agree with me or not, but I think it's good to always tell friends and family to give your kids money for their birthdays or Christmas instead of gifts that they're not going to use. You know, maybe the kids enjoy opening gifts and unwrapping gifts, but it just ends up in the garbage or in the garage or something, you know, they play with it for a day or so and then they lose interest in it. So I would much rather have the gifts be money where we could go deposit it in the bank account and take it and put it in the brokerage account. And they could start to learn about those things. If they do want to purchase something that they want, then they could take their birthday money and go buy something. And then number seven, for what I think we should be doing as parents, fast forward to college. And I think that this is the biggest gift that you could give your children. And that is letting them start out their lives debt free. So now college is a big topic. It's a complicated topic and there's no easy answer. It costs a lot of money to go to college. So what's the solution? I wish that I knew. So we should be opening up 529 plans. We should be saving money for our children to the best of our ability. But when the time comes, I don't think that it's a good idea to let them graduate from college with $100,000 in debt, with $50,000 in debt. I think that you have to work with what you have when that time comes. So if you did a good job saving, then great. Then you could pay for them to go to college. I don't think it's a good idea to let them take out student loans and to graduate college in the red, in the negative, owing money. And then they get used to just having the burden of debt. And they're starting from behind. They have to play catch up right away. And it's a hard way to start out life. I was very fortunate that my parents paid for me to go to college. And it gave me a huge head start in life. And I'm very thankful for it. So from day one, I did not have to worry about paying off debt. I was able to go ahead and try to start saving money and invest money for my future and to get ahead a little bit in life. So I think the most important thing that we could give our kids is to not let them start out life in debt. That doesn't mean that you have to pay and you have to struggle and you have to save all your money so that they could go to a college that costs $60,000 a year. That's not what I'm saying. I'm also not saying that you should take out parent loans and let them go to a very expensive college. I'm saying do the best you can to save for them to go to college. And then when the time comes, make do with what you've been able to save. And if you want to borrow some money to let them go to college, fine. But don't burden yourself to have them go to a brand name college. It's just not that important. And community college for two years and then the state school for two years sounds like a good plan to me. So they will thank you for it at some point later on. Kids that have $100,000 of student debt right now are struggling. It is a huge burden. They're not buying houses. They're not starting families because they have this student debt weighing on them. Don't put them in that situation. And at that age, they're not smart enough. They're not mature enough yet to be able to make that decision. So they'll say, yeah, you know what? All my friends are going to these great private schools. I want to go also. I'll take on student loans. Who cares? I'll pay it back over my lifetime. But it's the wrong decision. So that's my spiel on saving for college. All right, everybody. That is it for parenting around personal finance. So just to reiterate, I don't know what the hell I'm talking about. These are all my opinions, my experience. In no way do I think that I know better than you do when it comes to parenting our children. It's a journey. We're all on the same journey. It's a fun ride. But I hope that this was helpful for you and it gave you some thoughts and ideas about things that you could implement in your own life. Please hit that like button if you've not done so already. Please go ahead and subscribe to my YouTube channel. I really do appreciate it. And it helps with the YouTube algorithm as far as showing my videos to more and more people. I will see you again in my next video. Thanks a lot.