What A Financial Coach Hopes To Teach His Kids About Money

My family and I just returned from an amazing vacation, which has me reflecting on some of the major life lessons that I have been trying to teach my children. As a financial planning professional, many of these life lessons have a financial theme, but the most impactful money lessons are really the ones that are about life – not just “getting through life” or “trying to make ends meet” though. I’m talking about living a life of purpose and meaning.

“If a person gets his attitude toward money straight, it will help straighten out almost every other area in his life.” –Rev. Billy Graham

This is a simple yet powerful quote that stresses the importance of having a proper mindset when it comes to managing personal finances. Here are a few lessons that I’m trying to communicate to my children as they continue to learn and grow.

True financial wellness requires action

Financial wellness is more than just a feel-good buzzword/phrase. It’s where financial education and action meet to produce real results. Financial wellness requires knowledge and action with the end result being a positive sense of well-being backed up by actual financial behaviors that help us instead of create stress. No matter what my children are trying to accomplish in life, I want them to take action and always feel empowered to change their circumstances and the lives of others in a positive manner.

Countering harmful money beliefs

Money isn’t the root of all evil. This is a potentially harmful money belief that is often based on a distorted view of personal or family experiences. Stories of corporate greed, financial fraud, and other money-related wrongdoings help perpetuate this belief.

The reality is that “love of money” is the problem, and financial avoidance is not the solution. I don’t want my children to ever forget to express gratitude for their financial blessings, but I also don’t want them to forget their duty to be good stewards of their future resources. A healthier but not obsessive focus on money matters is needed in this day and age where money remains a taboo topic for many.

It’s not about luck

Wealth doesn’t require luck. Where are the real role models anymore? Pro athletes, musicians, and actors dominate most of the news cycle and trending social media feeds. This isn’t anything new, but what is alarming to me is the idea that wealthy individuals somehow accumulated their riches by luck or greed.

Now I realize that we occasionally hear about the Bernie Madoffs of the world who cut corners or the lottery winners that hit the jackpot. But the Millionaire Next Door is more likely to have achieved his or her success through hard work, persistence, trade-offs, and having a dream they were willing to turn into an actionable plan. I want my children to realize that it’s true that some people have more obstacles to overcome in life. However, your background doesn’t guarantee future success nor does it predict certain failure.

Never judge your success or status in life through financial measures

Perhaps the greatest lesson that I want to convey to my children is that their own determinations of successes or failures in life should never be assessed by their income or net worth statement. This sounds like such a simple concept, but I’ve met too many pre-retirees that were financially prepared to leave the workforce but lacked purpose and meaning in their lives because they were too focused on accumulation rather than living a life.

Experiences matter more than stuff

I want my children to enjoy spending time with me as their dad and mentor and not focusing on just spending time with their stuff. This applies to me as well. If I decided to be too product-oriented as a parent, that could be sending some negative messages to the people that I care about the most.

This doesn’t mean that we cannot enjoy some creature comforts that make life enjoyable. But it does mean that there always needs to be balance, and I want my children to value time more than the things that could rob me of that valuable time with them. As a result, we make sure our spending plan prioritizes those summer camp experiences as well as family vacations and plenty of staycations.

Avoid debt if at all possible

Never let debt become your master. The average American household has over $130k in debt. Among households carrying credit card balances, the average debt is $15,762.

Borrowing makes sense in so many situations, yet the struggle is real for those who are having trouble making ends meet because they are over leveraged. What’s the joy in busting it at work all day just so you can keep up with credit card bills, auto loans, and mortgage payments on a lifestyle you couldn’t afford in the first place? For my own children, I will constantly guide them to challenge the status quo and never become a slave to debt.

Remember that your current circumstances aren’t forever

It’s not surprising that retirement preparedness research suggests negative debt attitudes are related to decreased retirement confidence and lower overall financial wellness. More immediate consequences of debt can be seen in the eyes of recent graduates who are entering their post-grad lives feeling burdened by their loans. Many are delaying future life goals such as marriage or buying a home based in part on debt concerns. My advice to them is to not allow your current circumstances to create a sense of stagnation in life. Believe you can make real change happen and explore all alternatives to take financial action that will move you beyond the current situation.

Money is simply a tool 

Keep the big picture in mind

Always dream beyond your current financial or life circumstances. I’m working with many individuals and families that are dealing with some major obstacles on the path to financial freedom. My message to them is the same that I try to convey to my own children. Don’t ever give up.

No matter how good or bad your current financial status may seem, it is essential to look ahead and plan for the future. Live in the moment, plan for the future, and thrive. It’s that simple.

A challenge for parents

As you consider the money lessons you’d like to teach your own kids, I suggest asking yourself the following question:

What message am I sending the people that I care about most?

Asking these types of questions as early as possible during parenthood may be the key to set up the next generation for a true path to financial wellness that is based on a solid foundation.