As a parent of three teenagers who is, admittedly, in a good financial position, the money issue that scares me more than any other is the question of how prepared my children will be to make smart money choices.
Don’t get me wrong, my children are great kids who are smart and responsible, but bad money habits are hard to overcome. The ‘Shirtsleeves to shirtsleeves’ parable which predicts that family wealth is lost every third generation is frightening to me. In the parable which is focused on business owners, the first generation earns the family wealth, the second maintains the wealth and the third which has never experienced life without wealth is unprepared for and squanders the wealth. The overly simplistic answer is to have each generation act like a ‘first generation’. The harder question to answer is how to imbue first generation grit without calling in Rooster Cogburn.
In my quest to teach my children good money habits, I have recently read “The Opposite of Spoiled” by Ron Lieber. The book, which is subtitled ‘Raising Kids Who Are Grounded, Generous, and Smart About Money’ pulls together numerous real world anecdotes from parents around the country who are trying to raise money smart kids.
It is hard to distill a 200 page book down to a paragraph, but the core message of the book is that every conversation with our children about money is a conversation about values. Therefore we should not avoid or dismiss questions about money. We should embrace them as chances to instill good money values and prepare our children for lives of responsible spending, saving, and giving.
If you struggle with how to teach good money habits then I recommend this book to you. Not all of the ideas in it will make sense for your family, but you may find some gems and at the very least you will find some consolation that you are not alone in the struggle.