Friday, May 15, 2015

How to Teach Your Kids About Money When You Don't Have a Clue :: Part 6 - The Launching Years


One year ago this week our oldest graduated from college. She had already been offered a job. Soon after that, she moved into an apartment with some friends from college. She bought her first car. 

This past week, our middle graduated from college. Soon that daughter will begin applying to graduate schools and all that that kind of life entails. She's taking a gap year, so her life post-college will look a little different from her sister's.

Can I just say that this is all happening so fast! Too fast! 

I woke up on Monday morning, and the first thing that came to my mind was, "How do I already have two college graduates?"

If you've been following along in this series, undoubtedly some posts made more of an impact on you than others, depending on the ages of your children. But can I just tell you right now that you should really go back and read all of these posts carefully because before you know it, it will be the Monday morning after graduation and you'll be wondering, just like me, where the years went?

* brief interlude while I choke back sobs *

As I said when I started this series, I really didn’t have a clue how to teach my kids about money. I still don’t know much, but I have learned a few things along the way.

From the outset, my husband and I had a conviction that it would be important for our kids to know something about handling money—that their futures would be healthier (and, yes, maybe a little happier) if they learned how to control money rather than letting money control them.

So we made it a priority to teach them some things.


And that saving money for the future should take precedence over buying what you want right now.

And that it’s OK to spend money as long as you don’t go into debt to get what you want.

Today is the last post in this series, but it doesn’t mean I won’t write about kids and money any more. That’s because the conversation shouldn’t end. Just like other discussions with our kids that are ongoing, our talks about money should continue as well.

So let’s assume your oldest child has graduated from college. She has landed a job, secured an apartment, and bought a car (a used car for which she paid cash). Things are looking pretty good for your child, and you’re feeling pretty proud of her.

You might say your job is done, right?  Your child is launched, ready to go out and tackle this great big world. Right?

In many respects, yes. Your child has many of the necessary tools to make it in this world—a job, a home, a mode of transportation.

But does your child have the financial skills that are necessary in this complicated world? Have you talked about budgeting? Insurance? 401(k) plans? These are all important decisions that your child will need to make when they start their first job.

Maybe you’re really feeling out of your depth here—I know I am. I mean, I can handle the three jars—giving, saving, and spending—but to tell my daughters how to save in their 401(k)? Um, no.

Except to tell them that they should do it. From Day 1.

Here’s where you might want to suggest a little help to your child. There are millions of financial help books out there—suggest that your child read one or two. Here are a few you (or your kid) might find interesting:

The Millionaire Next Door, Thomas J. Stanley

Financial planners are now creating plans for recent college grads, often at a much lower fee than their usual customers. A financial planner will really get him or her to start thinking about their overall financial picture in a way that parents might not. Besides, your child might take advice from a third party more readily than he might from his parents. (*wink wink*)

Think of the year or two post-college as the launching years. The letting go years. Years that might be some of the hardest of all, but years that are so important.

Even as you begin to launch your formerly little person, you have to realize a few things:

1. Your child is no longer “little” and should not be treated as such. If they have a job, they have an income and, hopefully, a budget. Yes, that budget may be tight, but it’s not your job to bail them out and buy their groceries for them. Co-dependence is not attractive.

2. Your child might make some decisions you don’t like, even financial ones. But guess what? It’s not your business (or problem) anymore. If your son wants that brand new Corvette, and, assuming you’ve giving him some good financial principles (i.e. "debt is not your friend"), then bite your tongue and don’t get involved.

3. Your opinion doesn’t count any more. Unless you are asked, you can probably assume your child doesn’t really need or want your financial counsel. As I’ve said, the conversations about money should continue, but your opinion about how your child spends what they have earned is moot. You’ve laid the good foundation; it’s time now to trust their judgment.

4. Letting go of their financial future might be one of the hardest things you are called to do as a parent, but do it anyway. Nobody wants to see their kids struggle—in any area—but sometimes struggle is what makes them stronger.

Remember when you were first out of school? Maybe married? In grad school? Perhaps with a kid on the way? Remember how tight finances were? Me too. But B and I always say that those were some good, good days. Don’t deny your child the opportunity to struggle. It might be in that struggle that they learn to rely on the Lord even more.

And isn’t that what it’s all about anyway?

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A few weeks ago B had the opportunity to share some financial principles with some soon-to-be-college grads. The ten financial principles he shared with them were so good that I asked his permission to share them here. Hopefully these will help as you launch your own children into this world.

Ten Personal Finance Principles 
1. All resources belong to God – Don’t wait to give.
2. Save 10%, Give 10%, and spend the rest with joy and thanksgiving.
3. Make debt go away as quickly as possible. It’s not just a monthly payment, it’s a dream killer.
4. Keep student loan debt in check relative to your future income (8% of income).
5. Build an emergency fund as quickly as possible (3-6 months expenses).
6. Take advantage of your company’s 405(k) plan (at least enough to take full advantage of the company match).
7. Spend less than you earn over a long period of time.
8. Two can live as cheaply as one – get a roommate.
9. Don’t buy a new car unless you can pay cash for it (used cars are much more affordable).
10. Grocery stores are cheaper than restaurants.

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I sure hope you’ve enjoyed this series as much as I have. I really believe that aside from their spiritual growth, our kids’ financial understanding is one of the most important lessons we can teach them. Thanks for joining me on this journey!

So now, tell me . . . what is one financial lesson you will take away from this series?


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Other posts in this HTTYKAMWYDHAC series:

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