Teaching Your Kids Financial Independence
- Tuesday, May 27, 2008
Successful money management can bring great blessings, while poor management can bring utter disappointment. Perhaps you can relate to both the blessings and disappointments. You may feel that you’re no financial role model to your children. You know you could do a better job managing your money. You may feel that teaching kids about the money skills you lack will make you look like a hypocrite. Take heart! We all learn from our mistakes and shortcomings—and our kids can, too!
We can learn a lot from people who learned “the hard way.” Tuition in the School of Hard Knocks is pretty high, so most of us want to avoid paying it. How do we avoid it? The best way is by learning from Other People’s Mistakes (OPM). Tell your kids that you have made mistakes and that you hope they learn from you. Be honest about how these mistakes have affected your life. Say something like, “Kids, having too much credit card debt when you were born meant we couldn’t afford the home we wanted,” or, “Not living with a budget caused a lot of stress in our marriage. I don’t want that for you.” Testimonies of people who have made mistakes are very effective. Your kids will benefit from your honest testimony about managing money.
I assume, of course, that you have changed your habits and are following God’s principles in managing money. One of the best motivators to better manage our money is the fact that we have kids and they are watching us. Think about how many things we adjust in life because we have kids. Some people begin attending church when they have children. Women may choose to eat healthier while pregnant. Grownups watch their language when children are around. We change our ways when children are in our lives, because we know they are watching. Let your kids be a motivation for you to get in financial shape. They do learn by your example. Let your example be one you’re not afraid to let them see.
One way that kids can motivate us to become better money managers is the fear that they might become “boomer-rang kids.” Boomer-rang kids are grown children who return to their parents for financial assistance. Imagine what life will be like when your children leave home—more free time, more quiet, less mess, more money for your interests, etc. Now imagine yourself sitting in your nice, clean, quiet home one day, planning your vacation with your spouse, and the doorbell rings. It’s your grown child. He’s returned home, but he’s not alone. He has his spouse and your grandkids with him. They’re not here for an afternoon visit—they’ve come to live with you! They will eat your food, read your paper, and mess up the quiet, clean place you had. Do you want that? Probably not! Boomer-rang kids don’t always move back in, but they just might if they haven’t learned how to manage money. That’s why the fear of boomer-rang kids is such a great motivator for you to teach them now. (Please note that I’m not saying we shouldn’t help our adult children if they experience financial difficulties that are truly beyond their control. What we shouldn’t do, however, is bail them out of their own mistakes.)
A retired man who wanted some scriptural advice on debt recently called me. It seemed his 30-year-old son had accumulated nearly $30,000 in credit card debt. After the son’s fiancée learned of his debt, she postponed their wedding. My caller wanted to help his son. He wanted to “loan” his son the $30,000 and pay the debt so the son could get married. I strongly urged the man to let his son deal with the debt and not bail him out. This man was a caring father. He wanted to help. But he had a boomer-rang child, and he was still treating him like a child. We often have the mistaken idea that we are raising children. We are not raising children—we are raising adults. The end product of our efforts should not be boomer-rang kids, but adults who can live financially independent lives. That’s our goal—to raise mature, responsible adults.
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