Don’t Just "Tell" Your Kid the Way to Financial Freedom



Among the discussions of Legos, parkour and throwing the football, I do my best to slip in discussions with our 10-year-old about ‘needs and wants’. 

He’ll say something like, “I need that Nerf gun auto-repeater with the doomsday grenade launcher,” after seeing an advertisement on YouTube.  Commercials are still effective in the age of content-on-demand.

“Do you need it or do you want it?” I’ll ask.

He’ll think for a minute before saying, “I want it.  Then he'll grin and add, "But I really want it,” making his sales pitch dependent on a big smile and some funny antics.

“Enough to spend your own money on it?”

The smile fades quickly as he shakes his head.  “I don’t want it that much.”

He’s a good kid who, because of the age difference with his sister, sometimes gets spoiled like an only child.  However, when he’s forced to consider spending his own money, earned and saved through various chores and birthday gifts, he rarely gives into his own boyish greed.

We spend a lot of time thinking about the behavior we are modeling in our house for the 10-year-old.

Our lunches are packed and taken to work and school.  We have homemade dinners and we eat around the table every night.  It’s a very rare occasion that I  have a beer with dinner.  That might sound old-fashioned, but that’s okay.  Old-fashioned worked for a lot of years and we’re trying to get it back to what worked.

We talk openly about money to our son.  That’s a lesson from Robert Kiyosaki’s Rich Dad, Poor Dad that I’m taking to heart.  The rich talk about money while the poor and middle class shy away from it.  I’m not doing that ever again.

We’re not perfect.  We’ve bought things we had no business buying, such as a bird (that’s a topic for an upcoming post).  We’ve stopped for a quick bite to eat when we could have waited until we got home.  We’ve occasionally chosen comfort and convenience when a little voluntary hardship would have done us some good.

However, the overall theme is there every day:  What are we doing as role models?

It’s a question that I ponder often.

When I was a police officer, my daughter Sarah, was roughly the same age as our 9-year-old today.  Whenever Sarah and I would drive around town together, I’d point to some ragamuffin teenaged boy and say, “He’s a dirtball, Sarah.  The number one rule is don’t bring a dirtball home.”  In my defense, I was a bit jaded during that period of my life due to my profession.

For years, as we drove around, I’d point to some scruffy-looking guy and say, “What’s that?”

And Sarah would chime in, “He’s a dirtball.”

“And what’s the rule?”

“Don’t bring a dirtball home.”

What’s the first thing she did when she started dating?

You guessed it.  She brought a dirtball home.

I laugh about that now because Sarah has grown into a smart, beautiful woman who is making a nice life for herself.  I’m extremely proud of her.

However, I look back on all those moments and realize I failed her when it came to the lessons of money.  That’s because I failed myself on those same lessons.

We never once had a conversation about needs and wants.  We didn’t discuss how a credit card works or the affect interest has on your balance (and life).  We didn’t talk about how properties are financed through mortgages, using Monopoly as an example.  These are discussions I have with the boy now.

Instead, Sarah watched what I did and that was the worse lesson she could have gotten.  I was out of control at the time in my life.  My spending was outrageous.  We ate out at least five nights a week and I would drink beer with most dinners.  Not a solid example to give a kid.

I didn’t clean up my financial behavior until she was an adult and making her own financial mistakes.  It was tough for me to struggle to clean up my own mistakes while my daughter was following in the wake of my old decisions.

Sarah’s woken up to the danger of credit.  It took some years and stumbling, but she turned it around in her early twenties.  She didn’t wait until she was in her forties like me.

I’m excited for her as she moves forward in life.

My girlfriend and have these discussions with our 19-year-old, but due to age and the lateness of getting to her with the gospel of frugal living, it’s an uphill battle.  She talks about cars, clothes and cell phones as if there is no real cost to them.

She talks about financing everything and places the emphasis only on the cost today.  There is no discussion about the long-term impact of financing contracts, interest, lost opportunities, etc.  The only view that’s taken is, “This will make me look so cool today.”

When we try to interject reason into the conversation, it’s met with teenage sarcasm.  The Lifestyles of the Rich and Famous was never meant to come into contact with Larry Winget’s You’re Broke Because You Want to Be.

We continue to model our behavior for her, hoping that she will see the way we live even if she refuses to listen to our words.

There was a teaching method I learned while attending an instructor development course:  Tell-Show-Do.

First, you “tell” tell your students how they will perform the task.

Next, you “show” your students how they are going to perform a task.

Finally, you let your students “do” the actual task.

This has been proven to be one of the best methods for getting lessons to stick.

Unfortunately, most of the population will spend their lives “showing” their children behavior they haven’t spent any time contemplating.  They will “tell” their kids to do something completely different, but it’s dwarfed by what they are “showing."  It’s no wonder the kids “do” something completely unpredictable.

For example, a father smokes cigarettes in front of his son during his formative years.  He occasionally tells his son, “Don’t smoke.  It’s bad for your health.”  However, the father lights up daily, twenty times a day for years.  Which is the consistent message?

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Another example, a mother uses her credit card for all her purchases to gain airline miles.  She’s travel hacking.  Groceries, gas, clothes and more are purchased with the card.  At the end of the month, though, she pays off her credit card in full.  She never once misses a payment and never incurs interest.  Her young daughter witnesses this credit card behavior.  All the child sees is her mom using a credit card to buy whatever she wants.  She never sees mom sitting down to write a check at the end of the month to zero out the balance.  When the daughter gets her first credit card, she’s faced with her a harsh reality when the end of the month arrives and she can’t fully pay the bill.

There is a consistent outcry from a segment of our population about being monitored by the likes of Google for either our spending habits or our web surfing habits.  However, it seems its often forgotten that there are often more attuned eyes and ears in our own homes who are tracking more purchases and decisions than Google could ever hope to accumulate.

We should all take a moment to remember that every time we swipe a credit card or a debit card, the 10 year-old standing next to us is making a mental note as we “show” our behavior.  We should frequently “tell” what is actually happening as we “show” this behavior.  That way our kids will be prepared when they go out into the world and “do” their own thing.