Actions speak louder than words.
In no other case is this more apparent than in the raising of kids. No matter what you say to your children it’s your actions that will likely have the most impact.
On the subject of the impact of a parent’s actions, I came across an interesting article in The Atlantic about how when it comes to choosing professions, children often follow in their parents’ footsteps. “Doctors’ children often become doctors, lawyers produce lawyers, and plumbers beget plumbers.” This is also true for criminals according to the article.
According to the same Atlantic article, the research found that half of the convicted kids in one study were accounted for by 6 percent of all families; two-thirds of them came from 10 percent of the families. Those are eye-popping statistics.
On the flip side, I also came across an uplifting article in a local Arizona news site about a daughter following in her police officer father’s footsteps by joining dad’s Chandler, AZ police force despite dad discouraging all his kids from becoming cops and deliberately avoiding talking about his work at home.
His dedication and commitment to the community are what inspired her to pursue the same career.
On the financial front, what kind of example are we setting for our children to ensure their future financial viability?
Are we setting the proper path that we would want them to follow?
I don’t think that any of us wants to raise children to become part of the Boomerang Generation; yet, if we don’t take the proper steps and set the proper example, chances are they may end up living under your roof one day.
What is the Boomerang Generation? It’s the generation of adults that return home to live with their parents. According to the Office for National Statistics around 32% of under-34s were living in their parents’ homes in 2019 with the numbers still rising.
A recent Bankrate survey found that 50% of parents with adult children say they have sacrificed or are sacrificing their retirement savings to help their children financially.
It’s never too early to teach your children some basic financial concepts:
- Save to invest.
- Invest in your goals not to impress or things you cannot afford.
- Don’t spend more than you make.
- Avoid the use of unsecured credit.
- Sacrificing now will result in a better later.
- Soak up knowledge on growing your money.
I would suggest that the most important nugget of wisdom you can impart to your children is to make their own money and to put that money to work to make more money and to create additional streams of income.
As they see their piggy bank get fat from saving and reinvesting instead of blowing all their money on shiny toys, they will see the value of wealth creation.
Here are some ideas for making and growing money from a young age:
- Pay them to complete jobs around the home. Pay the jobs according to difficulty.
- Give them the option to outsource their chores to a sibling or to take on another sibling’s chores for a fee. Each job will be paid to the person assigned the work as long as it gets done.
- Encourage them to prospect their work to neighbors, neighborhood businesses, organizations, etc.
- Teach them to analyze the needs of others and to think of ways to fill those needs for a fee.
- Encourage them to sell items at school (if acceptable) like snacks, pencils, stickers, etc. or lemonade on the roadside.
- Once they make money, encourage them to save that money to buy more supplies such as snacks, pencils, stickers, lemons, sugar, etc. to multiply their money.
- Teach them that it’s ok to enjoy their money once in a while but not to lose sight of their goals.
The world needs more investors, entrepreneurs, and builders. It doesn’t need any more social media stars.
What kind of legacy do you want to leave for your children, grandchildren, and future generations?
A legacy like the Vanderbilts of running around in social circles and spending extravagantly? What is the result of that type of legacy? There is not a single millionaire left in the entire Vanderbilt bloodline.
Set the example for them to follow by achieving true financial independence.
Pass on a legacy of wealth and financial literacy to your children – one of wealth and wisdom that will last for generations.