[Editor's Note: Today is a special day. We have a new paid columnist here at The White Coat Investor. She is a long-time employee here, but this is the first time she has done more for WCI than pose for a few pictures as a model. Hopefully this will become a regular column, but at the rate she writes these, the column might only run every 18 months or so. If you haven't figured it out yet, this column is written by Whitney, my 12 year old daughter who will perhaps someday be the heir to the WCI Empire. These “Kid's Korner” columns are not necessarily aimed at you. They're aimed at your kids. So share them with your kids. By the way, if you say anything mean in the comments section, not only will it be deleted long before the writer sees it, but it'll be the last comment made from your IP address on this site. I'm trying to encourage Whitney's writing.]
A lot of people graduate from college without any idea how to manage their money or balance their bank account. Maybe you were one of them. Now that you’ve learned more about managing your money right, you want to help your kids not make the same mistakes. So here are eight things my dad has taught ME about money that you should teach your kids too.
# 1 Money Comes From Work
It is a common belief among five year olds that money grows on trees. Although I wish that were true, it isn’t. You will always have to work for money. One of life's most important lessons is hard work. If your kids don’t learn that NOW they will struggle for the rest of their lives. You will never be able to get something without working for it. Some of the hardest working people I know are my mom, dad, and aunt who all work for WCI and look where that is today! Teach your kids hard work by rewarding them for chores, good grades, or anything they worked hard on so that they will work even harder.
# 2 Life Isn’t Fair
I have to put this one here whether I like it or not because of how many times my dad has said it. “You get what you get and you don’t throw a fit.” Life and especially money-related things are never going to be fair. Some people are rich and some are poor, but you have to play the hand you were dealt and live with it and make the best of it. Those who are born poor can become wealthy by playing well. Those who are born wealthy can become poor by playing badly.
# 3 Save Money
This is a pretty common one. You always need to save money no matter what it’s for–taxes, a trip, or maybe your kid wants a toy. Piggy banks are great, but the best way to teach this to your kids is to use a clear jar. Your kid can watch it grow or set goals to reach for a toy or candy. Explain to your kids that if they put their saved money in there it will someday grow to meet their goal
# 4 Spend Some Money
Controlling how your kids spend money isn’t always the best thing. The more opportunities to choose you give them, the more successful they will be later in life. You should teach them how to be a good consumer, but also let them make some of their own choices. They will learn from their mistakes.
# 5 Interest
Why keep your money at home when your money can make more money for you? If you put money in a savings account or investment it will increase the amount of money you had before. My dad always shows me the papers we get in the mail showing how much money I have in my college account or my Roth IRA. We always look at how much we put in and how much it made. Interest should be something you get not something you pay.
# 6 Learn From The Mistakes Of Others
No matter how much my siblings and I complain about listening to Dave Ramsey, we still learn stuff from it. My dad will ask us what we learned and what the caller should have done instead of what they did that got them into that mess.
# 7 Don’t Impulse Buy
If you want to buy something actually look at it and see if you’re buying it to just buy it or if it’s actually going to be useful. (Especially if you could be using that money to pay off student loan debt.) If you avoid impulse buying, you can often find the same thing for a cheaper price. I learned that when I bought a RipStick. Of course, now I regret buying it at all since I don't use it much.
# 8 How We Think About Money Is Always the Big Game Changer
Money might be a numbers game, but how we think about money dictates how we play it. We often fluctuate between wanting to spend money and wanting to save it. Our attitude about money determines how much financial success we will have. If you set a goal and work hard for it, you can achieve it.
What do you think? What lessons did you learn from your parents? What money lessons do you teach your kids? What did your kids say after reading this column? Comment below!