[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.
The author on a climbing trip to Squamish, B.C. 11 years ago.
# 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
The author and this blog's editor on a modeling trip in Banff, 2016
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!
Great article Whitney! Sounds like you’ve learned a lot from your Dad. I’m going to share your article with my 13 year old son. I hope you’ll write more in the future!
Thank you! I hope it’s helpful. I’ll be posting articles around once a quarter for everybody to read.
Those are wonderful lessons to learn and share, Whitney! Number 2 – “Life Isn’t Fair” is one my Dad would really hammer home, and it was a tough lesson to learn, but very true. I spent some money on my Dad yesterday, taking him out for dinner and to a college basketball game. You’ll never guess which team 😉
My boys are asleep now, but will be reading these.
Thank you so much!
-Physician on FIRE
I wish my boys were older so they could understand this (they are only 1 and 3)
Great article Whitney!
Awesomeness, Whitney! Thanks. My fifteen year old told me about a cute interaction with his friends. They were asking him what kind of car he’d be asking for when he turns sixteen. He told them he’d be getting a new to him LaSabre passed from my parents. They told him, “Dude, you’re rich. You should get whatever you want!” To which he replied, “No, my parents are rich. And, they’re rich because they don’t buy new cars for sixteen year olds to park in the high school parking lot!” I was so proud, as I am sure your dad is of you. Have you had any interactions with your friends where you can start shaping how they see money?
Dr. Mom,
Your son may be a good contributor to kids Korner! Sounds like he has a good financial foundation.
Great article Whitney!
Ben
I love his response! Good job raising a financially savvy son, Dr. Mom!
Thanks! Same to you. Most of what he has learned has come from listening to us talk to our older two kids. They in turn stress to him the finance and values we have taught. Sometimes I think it comes better to him from the older siblings than us. You are on the same track with Whitney. We have never felt that talking to our kids about finance was a taboo subject.
I also liked Whitney’s comment about learning from her own mistakes and the mistakes of others. My daughter blew through all her personal saved money (almost $4000) during her junior year in college. She knew she was doing it and talked to me about trying to stop. But, it was her money so her ultimate lesson. We ended up having to take the emergency credit card away from her since one too many suprises showed up on it. I did have to get my husband involved in helping me do it though. She went and got a job on campus which probably helped her get her job after graduation. She now at age 24 has a great job, puts 15% in her 401k, maxes out an HSA, and saves another 5-7% in taxable. So, lesson well learned for herself and shared with her siblings.
“I’m trying to encourage this sort of behavior.” I’m probably the only one confused by this but are you trying to discourage mean comments or encourage blocking the IP addresses of mean commenters?
I’m impressed by how much wisdom is packed into these 8 pearls. If all her contributions are this high yield, Q18 months will be worth the wait.
Thinking back to my own childhood/adolescent experiences with personal finance, the following really spoke to me:
“Controlling how your kids spend money isn’t always the best thing…. They will learn from their mistakes.”
The best thing I ever received was an allowance to spend as wisely or foolishly as I desired. I learned how to delay gratification, not just financially but in all aspects of life. This has made all the difference.
“Interest should be something you get not something you pay.”
Didn’t fully appreciate this until young adulthood and a personal finance class but better late than never.
# 6 Learn From The Mistakes Of Others
I’d say this was the bulk of my financial education. By keeping my eyes and ears wide open I learned how to not manage my finances.
# 7 Don’t Impulse Buy
If you save money to buy your purchases, you can’t impulse buy so these two go hand in hand which is a great thing.
I hope you’re the only one confused, but that’s unlikely. The behavior I meant to encourage was my daughter’s writing.
I had the same confusion as MochaDoc
Fixed.
Thanks for the great article, Whitney! My girls are just 2 and 4 right now but I feel like your article gave me a lot of good ideas about the things I need to be teaching them. I think I’ll be using “you get what you get and you don’t throw a fit” immediately. You have wisdom beyond your years and I look forward to your next article!
Beautifully done, Whitney. I’m excited to share this with my 8 year old daughter. She dreads hearing these things from us. My hope is that coming from you she will be more receptive.
Can’t wait for your next post! Have a great day.
Thank You!
Great article Whitney. A WCI classic post. You are wise beyond your years. My Dad taught me the importance of saving and planning for retirement. He always paid cash or did not buy it. I hope you will post again.
I’ll join the refrain- great post, Whitney! You are years (and likely decades) ahead of your peers in learning those lessons, and will be much more successful throughout life as a result of learning them early.
Definitely gave me reason to pause and think about how I will raise my own children- my wife is 40 weeks pregnant today with our first child.
Thanks again and keep it up!
Thank you and Congrats!
Great job Whitney! Nice work.
One friendly suggestion, call it Kid’s Corner Columns, instead of the current spelling. The alliteration of 3 Ks is not a good look. 🙂
You’re not the first to mention that! Changed.
I thought the same thing. I thought I might be overly sensitive since I am from Alabama
Well done, Whitney. You deserve a (very large) raise!
My favorites are #2 and #6.
Great, post…I will read these to my children, but not sure how much of an effect it will have. They are 2.5 years and -1 month.
I will make sure this is required reading when they get older! Awesome job.
Whitney,
I wish I was this articulate at 36 instead of 12!
I like the comment “you have to play the hand you were dealt.” This is so true and often times people will use the hand their dealt as an excuse, but it should not be for everyone. We all are in charge of our own lives and the choices we make going forward.
Can you come and give my 2 year old son some money and writing advice? Also if you want to guest post on my site Dads Dollars Debts it would be great to hear how your family thought you about money!
-EJ
Great job and hopefully the encouraging words will inspire more. Of course #2 – Life isn’t fair — makes me believe Whitney is able and ready to handle what comes her way. A couple of more good ones: #9- “You can’t please everyone. Always do the best you can with what you have”; #10- “Develop Thick Skin” – people unfortunately are just mean and rude sometimes.
Your dad is very proud of you and obviously for good reason. Keep up the good work. And I second the need for a raise for you. :O)
Great topic!
I would say the key thing that was taught me is to save money. What I’ve been learning for myself is how to invest the money saved.
Thank you for the great post Whitney! I think many kids and adults can learn from your words of wisdom. I’m going to forward your article to my nieces and nephews. I have to say I smiled and laughed when I pictured you and your siblings being forced to listen to the Dave Ramsey Show. And you HAD to listen because your Dad then quizzed you and asked your opinions. That was a fun thing to include in the post. Well done! You have talent as a writer and financial adviser.
Her salary from work here should be placed in her Roth IRA and dad better do it pronto
You’re catching on. Some people are saying she needs a raise. I don’t dare give her a raise.
I assume she is off to college and that her goal is to attempt to get a financial aid package. If she is applying to colleges in 6 years, it is going to be used against her in any financial aid packages. Might instead consider grandparents 529 to avoid that problem. I guess it depends on everyone’s goals and needs.
I think it’s hilarious you think my kids will qualify for need-based financial aid. We’re not planning on it. Merit scholarships + work + 529 + cash flow + appropriate school selection. We think it’ll work just fine.
You know what would be cool though? If she had a financial blog that paid her way through school.
All the money I earn from this website goes in my Roth IRA along with most of my babysitting money as well. The rest goes in college savings.
Hooaaah!!!
Whitney, that’s Army talk for “I heard you and understand” but it also means “Great Job” when you say it with exclamation points.
This time of year is tax time and your dad has been telling us how much of what he earns (and we earn) goes for taxes – so we don’t have that money to spend.
One of my favorite sayings when I was young was “A Penny Saved is a Penny Earned” – meaning if you didn’t spend as much money on something, you would have more money without actually working more.
Mr Andrew Tobias taught me that this saying is wrong – it should be more like “A Penny Saved is 2 Pennies Earned” (or a Penny and a half earned.) What he means is that if you pay taxes on the money you earn, you have to earn 1.5 or 2 pennies to have a penny to spend on you – but if you pay a penny less for something, then you have a penny to spend. I have been teaching this to my kids – they are grown up now but I think they get it.
This is a fun saying to combine with your points #1, #3, #4, and #7.
Keep up the hard work and keep sharing your education with us!
Way to go Whitney! You have a great foundation and I would love to see you write more in the future! We are trying to instill the same habits and values you are learning. I can tell your future will be bright in so many ways.
I had my 11 year old son read it. He found it useful. Good job! Saving another generation.
Great read Whitney! I’m going to sit down with my five kids tonight and read this to them. I would love to hear what the kids perspective is on watching their Dad start a business sometime.
Look out Rachel Cruze, here comes Whitney WCI!
Heck, I think most adults don’t do most of this. They should read this too!
What a wonderful first contribution to share with us. I am really looking forward to hearing more of your thoughts about money in future contributions. I particularly liked your comment #7 and the example you gave about the buying the RipStik. All of us have made mistakes by spending too much of our money on something that we wanted at the time we bought it, but later regretted buying. I have shared your article with my children and know they will enjoy reading as much as I did. Best wishes for future success.
Awww, this is so precious. I had a really tough time learning that life isn’t fair. Hell, I’m 25 years old and I still haven’t fully accepted that lesson. I didn’t really learn money lessons from my parents, but I was always naturally thrifty, so that definitely came handy. 🙂