I hate deadlines. They come too soon. For some reason I agreed to do a blog for something alled TBF's "Being Broke Ain't Cute" Personal Finance Series. It is due today. The lady involved (TBF stands for The Budget Fashionista) suggested the following for me--
Bill at askunclebill- What I tell my daughter (Financial management
tips a father tell a daughter)
This lady obviously does not have children. Or if she does they are young and at that great age where they adore their parents. This too shall pass.
The only person less likely to take fatherly financial investment advice than a daughter is a son. But the gap is not large. They could care less. Think back to being 13, 14, 15, or 16 and ask yourself if you were wandering around wondering if the S&P was going to break downwards 20 points or when the next time the Fed chairman was going to raise the discount rate. If you can honestly say you thought about these things when you were a teen then you are someone I don't want to meet.
But the lady at TBF seems very nice so I will plunge on. Ok, here is the one financial management tip every father should tell his children--SPEND LESS THAN YOU MAKE!
Now any parent will immediately see the problem with this--the kid doesn't make any money. He/she bums off you. So that piece of advice will only take hold when the kid gets out in the real world and starts making a buck. This is not to say the kid will not hear you when you say it, they may. They just won't show it. Things do come back. In college my son bounced a check and I bounced him a couple of times ending with the warning that a bounced check would have a negative impact on his credit rating. Huh? I told him it would make it harder for him to borrow money. His response--"I thought you said never to borrow money." Could have knocked me over with a feather. Till then I was convinced he heard nothing I ever said to him. Wonders.
But that kind of thing is an exception. Ok, so verbal financial advice is pretty worthless. If so, then how does a parent impart, what were the words again? Financial management
tips. Financial management tips for kids. Doesn't work. Here is what does work.
Kids do not always hear what you, the parent, say. But they watch you all the time. Not out of fear necessarily or awe, rarely, but because you control the purse strings. If they want something, the only route to get it is through you. So they watch you and they learn from you.
If you are always buying new stuff, not taking calls from creditors, worrying about money, getting fired on a regular basis, buying a new car every year, living in too big a house that you can't afford, living paycheck to paycheck than you can bet, pretty safely, that your kids are going to end up doing the same thing. Maybe not but the odds are they will.
If you save, invest in your 401(k), look at the business section, keep a job, build a business, buy stocks, invest in real estate, and have some money in the bank then the odds are your children will do the same.
Now I did listen to my father though I never acknowledged his wisdom, well maybe later I did, but his best advice was "Don't listen to what people say, look at what they do."
You reap what you sow. So be a good example and your kids will follow. Parents--go and sin no more.