teaching kids about money

Helping Your Kids Financially May Actually Be Harmful

June 21, 2016 By Jennifer Clark 1 Comment

Our kids are our world. We want to do whatever we can to help them and see them succeed, but sometimes, parents can overdo it. An online poll discovered that practically 60 percent of parents provide their adult children who are no longer in school financial support. Additionally, 65 percent of young adults say they feel they’ve experienced tougher financial hardships than prior generations.

Fifty percent of parents say that they have helped their adult child with housing payments. The online poll also showed that over 40 percent of parents have helped their adult children with living expenses, transportation costs. Where does the financial help end?

Watching your kids go through hard times with money is difficult, but there is a difference between helping them and hindering them. Helping your kids financially may actually be harmful, depending on the situation. Instead of always bailing them out or taking on some financial responsibilities for them, here are some things you can do:

Teach them the value of a dollar.

Yes, you have probably heard this before, but instead of giving them money, teach them how to save and how to budget. Educating them about finances will be much more beneficial than handing them the amount they need every time. Offer to match the amounts they save throughout their years in high school and college, which will help to encourage them to not only start saving early but continue saving as well. Putting funds aside will become second nature to them, which will help to pull them out of sticky situations in the future. You can start these lessons early so that as an adult, they are prepared and knowledgeable.

Open a 529 account.

A 529 is a tax-free education savings account that is designed to specifically save funds for future college costs. These work similarly to a 401 (k) where you can continue to contribute funds regularly. If you still have a little one on your hands, you may want to see if family would give cash for this account instead of buying a gift. Check to see what your state regulations are on these accounts and how they work for where you live here.

Guide them in their future.

Communicate with your kids on what they really want to do in their future. A four-year college is not meant for everyone, nor for every career. There are plenty of careers that do not require or do not need four years of schooling. Helping to prevent them get into unnecessary excessive debt will be one of the many ways you can assist them without hindering them. Be supportive and guide them along the process. Keeping that communication open about finances will be detrimental for their future in more ways than one.

Set limits.

If your child does come to you for financial assistance or even needs to move back home due to money struggles, be sure to have an open conversation right away about what you will and will not do. Include your expectations and develop a timeline with them. You may want to also give them some goals you would like them to achieve to help keep them on track. If possible, charge them rent as well. Allowing them to live without any expenses can be extremely harmful to their future.

Get them a job.

If you see your son or daughter is really trying to acquire a job but is having a difficult time doing so, you can use another type of resource other than money to help them: your connections. Use your network to see if you can find them a job, ideally in their field of study (if applicable). Any job will be helpful, though, for their financial situations.

Helping your child financially in times of trouble is not a negative thing to do; however, you do need to recognize the other ways you can help them without directly bailing them out every time. This is not to say you should never help your kids. You just need to set boundaries. They will come to rely on you more than they should for money, and as a parent, there needs to be a time where tough love is enforced.

What would you add to the list? Have you experienced this yourself?

Your Child Could Be Heading Toward Financial Failure If…

March 28, 2014 By Guest Writer 2 Comments

By Gregg Murset

If you haven’t heard the famous stand-up comedy routine of Jeff Foxworthy I would suggest taking a few minutes to pull some one-liners up on the Internet before reading the rest of this piece. Foxworthy has worked extremely hard building a successful career by making jokes about real-life situations, as well as a particular class of people who might be called by some “Rednecks“.

As millions of YouTube videos will verify real-life can be very funny. However, it can also be very hard, especially if you aren’t prepared for it. Recently, numerous studies have come out supporting what many of us already see as parents – kids not prepared to make financial decisions they will be forced to make as adults. Add to this a growing generation of kids with a poor work ethic and growing sense of entitlement, and many believe our economic future is in deep trouble.

Right now in the U.S. kids aren’t learning enough (if anything at all) about basic finance, even though these are skills they would use the rest of their lives. Depending on where your high school kids go to school, they may be required to take a combination of foreign language, high-level math (algebra) and high-level science (anatomy) in order to graduate. Why not finance?

Is learning how to speak French more important than learning about interest rates and credit cards? Is figuring out the value of X more important than knowing how to plan a monthly budget or saving for retirement? Is dissecting a preserved animal as critical as understanding the differences between loans and how inflation affects us all?

April is National Financial Literacy Month in the U.S. providing a great opportunity for all of us to evaluate if our children are learning the basic financial information that will help them save, share, budget and make smart money decisions as adults. According to a 2013 report by The Center for Financial Literacy at Champlain College on the financial education in each state, only 20 states received a grade of A or B. A debate is now being held in almost all states over whether or not a standalone finance course and a test should be required for high school graduation. I’m not sure why it’s even debatable. Personal finance knowledge will be used more any other knowledge set throughout a persons lifetime. It’s a no-brainer!

So what if you have a child between the ages of 5 and 17 and you are concerned with what he or she knows about earning, saving, sharing, spending and budgeting money? Is there a way for a parent to tell if there is trouble ahead? Just watch out for these signs that your child could be heading toward financial failure and take corrective action at the first sign of trouble.

Your Child Could be Heading Toward Financial Failure If He or She:

Says That Buying a Lottery Ticket is Their Retirement Plan

The odds of winning the lottery is somewhere around 1 in 259 million. This is not a retirement plan, this is the worst kind of gambling- almost zero chance of winning! If your child thinks this is a good way to plan for the future, just start planning now to have them living with you during your retirement!

Spend More Time Watching TV or Playing Video Games Than Helping Around the House

Get your children off the couch or out of their room to do their share around the house. Besides building a daily routine, they will develop a good work ethic, demonstrate responsibility and make your life easier. As they develop a work ethic they will start figuring out that work equals money most of the time and will want to start earning more money.

Is Older Than 7 But Still Putting Money Into a Piggy Bank

While piggy banks can be a cute way for a youngster to learn about nickles and dimes, what purpose do they serve after that? Almost none! If your children are old enough to earn money they are old enough for their own bank account. It’s a great opportunity for them to learn how a bank works, use online banking and begin to understand interest (though it’s not what it used to be).

Thinks Credit Cards are Free Money

Some kids think that credit cards represent free money banks give away for people to buy things. As we all know now, there is nothing free about credit cards. Until your children have a clear understanding of how cash advances interest rates, penalties and fees mean, they shouldn’t have one. Be sure you are teaching your children the difference between a debit card and a credit card by discussing the ins and outs when you use them in front of your kids.

Learns About Finance From Comic Books

A year or so ago, one of the largest financial institutions offered a comic book where a well-known superhero fought a villain over bad financial decisions. As parents, are we really that afraid of communicating with our kids about financial matters that we would rather leave it up to comic books and animated characters? If your children can’t learn about this important subject in school, let them learn from your experiences. You can become the superhero.

Has a Fall Back Plan of Moving Back Home if the “College Thing” Doesn’t Work Out

OK, so this is a bad news – good news situation. The bad news is that 71% of college dropouts move back home with their parents because of money woes or inability to find a job. The good news is that 97% of these “boomerang” kids are willing to doing chores around the house to help out. They better be their options are running thin!

Thought That the Term “National Debt” was the Title of a Nicholas Cage Movie

While most teenagers have some idea what the National Debt is, a majority have no idea what it means to them. As of right now, our National Debt stands at over $16 trillion, (that’s twelve zeros people!) meaning a baby born today is $51,501 in debt. Tell your children that they owe you more than $51,000 and see what reaction you get. Helping kids to understand how this number affects them is the first step to managing it.

They Think that Budget Refers to a Rental Car Company

According to a recent Gallup Poll, 67% of American adults don’t have a monthly budget in place or a long-term financial plan. Since kids learn a great deal by watching what their parents do it’s important for you to set a good example for your children and budget. Also, share the budget with them so they have a better understanding what constraints there are and how they can help meet family goals.

Swears that the Term “Interest Rate” Means How Popular Something Is

Definition Alert…An interest rate is the rate at which interest is paid by a borrower (debtor) for the use of money that they borrow from a lender (creditor). The best way to remember how interest rates work is the rate will most likely be high when you are paying back money and low if the bank is paying you money. Talk to your kids about interest rates in regards to credit cards and car loans since they will come in contact with those first.

They Are Over 25 and Still Getting an Allowance From You

Houston, we have a problem! If your child is about 25, living at home and still asking for an allowance, you should be telling your child one thing … move out and get a job! Of course there could always be some circumstances that provide a real reason why a grown child is at home without a job or income, but it better be a good one.

They Turn Down A Good Summer Job Waiting For The Perfect Job

While summer jobs have been more difficult to come by with the recent decline in the economy, kids who really want to work always find a way. Even though it might not be the perfect place, it’s a job. If they want more opportunities, help your child decide summer plans early since summer jobs fill up fast depending on where you live. Also, get them to understand that not all summer jobs are glamorous. To ease their pain, tell them if they are saving for college or a car, you will match their pay as an extra bonus for being responsible.

Many of these financial doom warning signs can be used to avoid a negative future if you start your children early on a routine of completing jobs around the house and rewarding them with an allowance or by another means. By starting around the age of 5, kids can learn work ethic, responsibility, accountability and how to manage money wisely. Using an educational tool like MyJobChart.com will help parents assign jobs, motivate kids and reward successfully completed jobs. Kids use the same technology (smartphone, tablet or laptop) they spend hours on now to see their daily schedule and decide how to save, share or spend their rewards.

No matter how you decide to position your children to be successful financially as they grow remember that education, communication and hard work must be part of the plan. Otherwise, we’ll end up with a generation that thinks the Debt Ceiling is the maximum amount that can be charged to their credit card. By the way, it’s not.

Gregg Murset, CFP®, is the Chief Executive Officer of My Job Chart, which was born from real life experience. Murset is a father of six children (ages 6 to 16) and needed a way to teach them about earning, saving and spending money. With no system available for a family with a large range in ages, He came up with the idea to combine modern technology with the traditional allowance system to teach responsibility, accountability and the fundamentals of financial literacy.

Kids and Money

March 3, 2010 By Jennifer Derrick 8 Comments

I remember when I was a kid, my parents would take the time to show me how money worked. (This was in the days before ATM’s and online banking.) My mom would show me how to write a check out to “cash,” hand it to the teller, and get cash in return. She showed me how she deposited Dad’s paychecks. She showed me how to fill out a deposit slip and hand the cash to the teller. She taught me how to balance a checkbook by just using simple math, no special software required. I watched her write checks to pay the bills and put them in the mail. I watched her pay cash for many of our purchases and I linked that cash to the money she’d gotten at the bank, which was the deducted from the check register. I had a savings account to hold birthday money and I was taught how interest works and got to review my passbook every time I made a deposit. In other words, money was very real to me. I understood how it was earned, how it was spent, how it was saved, and how it had to be managed. As a result, I grew up appreciating and understanding money.

More than once in recent years I’ve heard parents complain that their kids don’t understand money. The kids think that mom just puts the plastic card into the machine and money comes out. Or, that mom puts the plastic card in the machine at the store and the cashier hands over the merchandise. Kids don’t see money as real. I talked to the mother of a sixteen year old the other day. The woman told the kid that she didn’t have the money for the clothing item that the teen wanted. The kid replied, “You do so have the money. Just use the plastic card, mom.” This sixteen year old has no real clue about money, credit cards, interest rates, and what it means that there is no money.

I think kids today are in trouble when it comes to money because money isn’t real to them (at least not until they get their first jobs). When the parents never use cash or manually pay any bills, all the kids grow up seeing are cashless transactions. Money comes out of a machine, bills are paid with the click of a button, and purchases are made by swiping a plastic card. Even the games kids play today have removed the money. Versions of Monopoly, Life, and other games are now played with credit cards rather than making players count out cash. How can a kid learn about money when he never sees any in use?

It is harder today to teach kids about money, simply because our convenient lifestyle doesn’t make it part of everyday life. When I grew up, cash was the only game in town and you couldn’t help but learn how it worked. Parents like mine that took the extra time to teach reinforced the lessons, but a kid could pick up the basics even without parents that weren’t inclined to teach. Today it’s much different. Unless a parent makes a concerted effort to teach kids about money, kids are only likely to associate money with plastic and easy access. The link between a job, cash, expenses, and savings is much harder to establish.

What can you do if you want to make sure your kids understand money beyond the plastic and online world? Here are some ideas:

Use cash when you can

Try not to make all your purchases with credit or debit. Let kids see how cash transactions work and that once the money is handed over it’s gone.

Show kids how you pay the bills

If you do still write checks, let kids see the process. If all your bills are paid online or auto-drafted, sit kids down at the computer and explain where the money goes. Show them the transactions and the deductions from the account.

Show them your paycheck

Even if your paycheck is direct deposited, you probably get a pay stub or have online access to your pay record. Show your kids that this is where the money comes from. You work, you get paid. Then work to establish the link between that pay stub and all of the other transactions you have to make.

Show them how to balance the checkbook

Let them sit with you while you reconcile your statements. (Not doing this? Shame on you. You need to balance your books every month!)

Show them your credit card statements

Explain about interest and debt. Show them how your payments are applied to the balance. If you pay the balance off in full, explain why this is good. Show them the things you bought so they can understand that household expenses are sometimes paid with credit cards. Demonstrate that a credit card is not free money.

Let the kids work with cash

Buy the “old fashioned” versions of games that use play money so kids can get used to handling and managing money. Give them cash for their allowance and let them make their purchases in cash so they understand that parting with cash hurts.

Demonstrate savings

If you have some money direct deposited into savings every month, show them how it works and where it goes. Open a savings account for your child so he can put his own money in there and see how interest works.

Even little kids can understand the basics of money. Even if they don’t understand all the intricacies of the process, they can begin to make the link between work and money and what it takes to run a household. They can begin to understand that money isn’t magic and it isn’t “just there” when you want it. If you have financial problems, you don’t have to reveal every little detail to the kids, but don’t hide from them, either. That does more harm than good. Involve them in the household money processes so that they learn how money works.

It is harder to teach kids about money today. With everything being done electronically it takes a special effort from parents explain those processes and demonstrate where money comes from and how it is managed. But, it’s an effort you have to make if you want to raise financially savvy kids. Without education, kids grow up with false beliefs about money and they never learn how to manage it. Take the time to break money down to its basic components and strip away the plastic shell and electronic frippery. Let them work with cash and let them see you working with your money. Then maybe your kid won’t come to you one day and tell you that of course you have money to buy him stuff because you have the plastic card.

Dave Ramsey Financial Peace University: Week 2

February 25, 2010 By Maggie Ellis 13 Comments

This is a series of posts about what you will find in Dave Ramsey’s Financial Peace University course. This is week two (week one)

This week’s lesson is about money and relationships. I was excited about this week because relationships are something that everyone has to deal with, no matter how much money they do or don’t have. I was interested to see what advice Dave would give to deal with those times when money strains relationships. Money fights are probably more common when a family is struggling, but everyone fights about money from time to time, even those who have plenty of money. Some couples are complete opposites and one is a saver and one’s a spender. Other couples are closer to each other in terms of spending habits, but money can still cause problems. In my house, despite the fact that things are going well money-wise and we’re both natural savers, we still have times where we argue over spending or saving priorities. Rather than focusing in detail on relationships however, this lesson jumped all over the place.

It started with a discussion of the stereotypical roles that men and women play in marriage. Men like to negotiate, women prefer to bargain hunt. Women like security, men like risk. Women like to shop, men can’t stand it. Men tie money to self-esteem, women tie money to security. Men handle the money, women handle the kids. In other words, women and men approach money very differently and this is the source of friction. While I understand that drawing such generalizations makes it easier for Dave to make his points, it did get old after a while because I know many couples that don’t fit these stereotypes. I found myself wondering if he makes these generalizations just for the laugh factor and for simplicity’s sake, or if this is really how he sees the world. I can’t answer that, but knowing he comes from an extremely conservative worldview, it makes me wonder.

Despite all the generalizations, his main point for the lesson is that both partners have to take an active role in the family finances if there is to be any success. There also has to be open communication. He spends a lot of time talking about free spirits — those who don’t really care about money and just want to spend as they see fit — and nerds who are the ones who like budgets. The nerd is often guilty of trying to control or browbeat the free spirit and the free spirit is often guilty of blowing off the nerd’s suggestions. If this is your relationship, I can certainly see the problems. However, Dave doesn’t spend any time dealing with what happens when both partners are nerds (my house) or both partners are free spirits. In my house, we tend to over-control the money, sometimes to the exclusion of some much needed fun. Couples who are both free spirits would have a hard time staying out of debt and ever saving anything, I imagine. I doubt that most couples are as directly opposite as Dave would like the class to believe.

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Dave Ramsey Financial Peace University: Week Four

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Dave Ramsey Financial Peace University: Week Six

Dave Ramsey Financial Peace University: Week Seven

Dave Ramsey Financial Peace University: Week Eight

Dave Ramsey Financial Peace University: Week Nine

Dave Ramsey Financial Peace University: Week Ten

I do agree that, whatever your natural tendency, be it nerd or free spirit, honest communication is essential for financial success. You can’t have each partner off doing their own thing and expect to stay on budget. You can’t have opposing goals, either, unless you negotiate how to save for both. You can’t have a partner sneaking off and buying things, or lying about how much they cost. Eventually the other partner is going to find out and stuff is going to hit the fan. Communication and openness is key and on this I agree with Dave.

The lesson hit briefly on the challenges faced by singles and then moved on to teaching kids about money. This probably could have been a lesson unto itself. There are many challenges involving kids and money, starting with the “allowance,” which is essentially giving kids money for nothing. Dave expects kids to work for the money and he calls it a “commission.” I like this approach because it begins to tie the concepts of work and money together for even the youngest kids. He also believes in making kids pay their own money for their “wants,” even if it means they are disappointed or frustrated at times. He also wants us to teach kids to give at a young age by giving a portion of their “commission” to the church. I’ll get to that in a minute.

While I don’t have kids, I have to agree with his advice here. This method of teaching kids about money seems far preferable to the approach taken by one of the members of our small group. This woman admitted that they have been giving their kids all the money they ask for for years. Now that the kids are teens, they have no real concept of where money comes from or what it means that there is no more. Now that the parents are trying to get their financial house in order, the kids are having fits because they aren’t getting what they used to. The woman is afraid that it might be too late to help her kids and I fear she may be right. It will be interesting to see, as the class goes along, whether this woman can get her kids to understand money.

Now, about the giving: In just two weeks of this class, the concept of giving to the church or “tithing” has come up no fewer than twenty times, both in Dave’s lectures, in the small group, and during the general administration/recap period that precedes each class. It’s also mentioned often in the workbook and in Financial Peace revisited. I understand where this is coming from. Dave makes no bones about conducting these classes with a Christian worldview in mind. As such, he urges people to give to the church. And the church where this class is taught would really like us to give there, so they also put in their pitch.

I don’t have a problem with the message per se, although I do wish it were uttered a little less frequently. However, if the concept of tithing bothers you, be aware before you sign up for the class that you will hear it often. If it bothers you, you can try to reframe it in terms of giving to an organization other than the church. The main point of the class is that, once you have enough money for yourself, it’s your moral obligation to give back to society. If that’s the church for you, great, but there are a lot of other charities out there that can benefit from your generosity that might suit you better.

My other growing beef with the lectures is the constant sales pitches. So far I’ve heard pitches for Financial Peace Junior for kids, Dave’s program that can be taught in high schools, the envelope system (of which we received a free version, but apparently there is a deluxe version that we can pay for), the website (that we get for free for now, but we’re encouraged to pay when our free membership runs out), and tickets to see Dave live. The workbook is peppered with ads for everything from Dave’s apparel and water bottles, to all sorts of other tools and books that we should consider. I get it. Dave is a business and needs to make money. But at the same time this is irritating to me because many of the people in the class are deeply in debt and don’t have any extra money to spend. Tempting them and making suggestions about things that can “help” them seems wrong, somehow.

When we moved on to small group, it was inspiring to see what a difference the quickie budget has made to most people in the class. Several people reported having already paid down some debts using money they freed up once they did the budget. Several more people reported that, now that they can see where the money is going, they were able to trim their spending and save up large amounts of money already. One couple got paid just as we were beginning the budget and they were able to save $390 out of that paycheck. That’s more money than they’ve ever had in the bank before. When they added the proceeds from some sales of unneeded stuff, they had managed to accumulate close to $500. They are halfway to their emergency fund in one week. Other couples had similar stories. The point is that seeing where the money was going gave them some control. So far, the plan is working for many people.

As for me, I’ve managed to put away about $50 in coupon savings that I transferred directly to savings, plus I racked up about $65 from some rewards programs, rebates, and found money. I sold a few DVD’s we no longer watch and made another $20. I didn’t count my regular contributions to savings because those aren’t “new” to me. I’m trying to come up with $1,000 of money as though I didn’t have the extra income to just put it away easily. I’m at $135, although next week I should get some more because I have some payments for side work coming in.

Another story emerged in small group that I’m interested to follow. One couple has about $35,000 in debt, not counting the house which has an ARM that is about to reset. They don’t know what to do next, but even as the husband is recounting all of this, I hear an element of pride in his voice that he has a big motorbike in the garage, that he dresses well and travels often, and that he refuses to eat leftovers. Even as he admits that these things and habits are causing some of their financial problems, I can tell he does not yet want to change. He takes pride in consumption and it’s not something he seems willing to give up just yet. The wife says that the class was her idea. It will be interesting to see if the husband comes around to her way of thinking.

Next week we’re supposed to get into hard core budgeting with a detailed budget. This week for homework, in addition to reading, we’re to start saving all of our credit card offers that we get in the mail. At the end of the class we’re going to tally up how much potential debt was offered to the class. I probably won’t get many since I opted out long ago from the mailing lists, but I still do get a few that I’ll put aside. I’ll keep saving up that $1,000, too.

Next: Dave Ramsey Financial Peace University: Week Three

A Life Without Debt: Where Did It Come From?

July 21, 2009 By Sadie Morris 8 Comments

People often ask me some version of the following question: “Where did you get this idea that you should live a debt free life? How did you, in a world where credit cards are ubiquitous and debt is the norm, decide that you were going to go against the norm?” People are curious about my lifestyle choice because it seems so foreign to most of them. The simple answer is: It came from my parents.

My parents paid cash for everything, except their home. New cars, Christmas gifts, furniture, you name it, it was all bought with cash. And they saved, both for the short term and the long term, setting themselves up nicely for their elder years. My parents were not wealthy, either, nor did they have high paying jobs. Dad worked and mom stayed at home. I had some cool toys and we took some good vacations, but never to excess. I heard the word, “No” a lot when I wanted something that wasn’t in the budget. We had a nice house in the suburbs and two cars. Just your average middle class family that knew how to budget, save, and live beneath their means. I grew up watching the example they set and it stuck with me.

But beyond setting a good example, my parents made sure that I understood that the comfortable life that I saw was not how they started out. By the time I came along, they had been out of school for several years. Both my parents worked until I was born, banking every extra cent for the future. They had already lived in the rat hole apartment while dad went on for his Master’s degree. They had already driven and sold the clunker car that required a kick every morning to start. They had already been through the phase of having no furniture and sleeping on a mattress on the floor because it was all they could afford at the time. When I came along, they were in a better place. They’d bought a nice house and some furniture. They had a better car. They had money in the bank and dad had advanced enough at his job that he was making more money. As I grew up, they were able to upgrade things even more and by the time I was in high school, they were able to send me to some great camps and on school trips that they could not have afforded without sound financial planning.

All I saw was the result of all that hard work. I only saw life in suburbia. I could have been forgiven, I suppose, for thinking that this was just they way things were. That everyone just got out of school and ended up in a nice house, in a nice neighborhood, with a nice car, and a good paycheck. But my parents made sure to tell me (and show me pictures) of how it was in the early days. They explained how they had stretched their dollars and saved for the future. They showed me how living low to the ground those first few years and not taking on debt had set them up for the secure and prosperous future they were now enjoying. They also made it clear that I could expect to do the same, because they would not be supporting me once I got out of school. It was an eye opening lesson, and one I’ll always be grateful for because it prepared me for the life I was about to enter, not the life I was about to finance.

If my parents hadn’t explained this to me, I probably would have gotten out of school, gotten a bunch of credit cards and set about trying to recreate that nice suburban life I’d left. And that wouldn’t be surprising. After all, who likes to go from the comfort of your family home to the crappy 500 sq. ft. apartment on the iffy side of town? But I was prepared for the lean phase of life. That’s not to say I liked it, but I was ready for it. I had an example to follow and I made the best of it. I didn’t take on debt and I went through the crappy apartment, the clunker car, the mattress on the floor, and the no TV phase of life. Gradually I upgraded things as I could afford them, all the while saving for the future, too. Today I enjoy much the same standard of living that my parents had when I was born. And let me tell you, I have a lot more respect for the time and effort it took for them to achieve it.

I think a lot of kids today don’t get that lesson. As a result, they aren’t prepared for the lean years when they go out on their own. They think that they will simply live as they always have, and that means taking on massive debt loads when trying to accomplish that on a first job salary. Many parents try to protect their kids by not telling them about their own lean years. They think that by not telling them of their suffering that they can magically make it better for junior. Like if they don’t say it, then it won’t happen. Either that or the parents themselves never learned the lesson and just financed their way to a better life. But not telling kids about your own lean years (or the screw ups you made in trying to avoid them) does them a disservice. These kids just grow up assuming that they will pick up where mom and dad left off, and they don’t understand that a “standard of living” has to be achieved gradually and with thought and effort, not via credit cards and loans.

Take the time to explain to your kids that you just didn’t magically wind up with a nice life. Explain the effort it took and show them how you struggled in the beginning. Teach them that a successful life is built slowly over time and not bought on time. They’ll probably roll their eyes and say, “Oh, man, not the story about kicking the car every morning again,” but if the lesson sticks and they go out on their own prepared to brave those lean years and build up a debt free life, it will be worth every eye roll.