What I Want My Kids to Know

Kelley Reynolds from Aegis Learning

By Kelley Reynolds

One of the most consistently lively discussions during facilitation usually occurs early in the program.  The provocative discussion topic is “What are appropriate and inappropriate motivations to get into leadership?”  Specifically, why money is not a good motivation.  Of course, money is a factor since we do not work for free.  However, money in and of itself, is not a good reason to promote into leadership for a variety of reasons.  For example, the value of the pay raise is short-lived as you will soon become accustomed to living at (or above) the new rate of pay.  Also, the new responsibilities expected of you usually outweigh the pay received to perform them.  And not by a little!  The discussion usually concludes somewhere around the point that if you are promoting for the appropriate reasons, money will come.  Money will follow you.

Recently, after conducting this facilitation, the discussion remained on my mind.  The class conversation meandered, as they do, but my mind settled in this:

What do I want my kids to know about money? What changes? How can I help them make smart decisions with the money they will earn and become financially secure?

My background is in public service, not finance, banking, investments or accounting.  However, I am very fortunate to have access to a handful of people who, combined, have several hundred years of experience with money; wealth accumulation and management.  They represent the fields previously mentioned and more. So, I set out to seek their counsel.

This is not an article containing investment advice.  Nor containing strategies to replace your current program.  It simply contains the responses I received when I asked, “What do you want your kids to know about money?”

Pay yourself first. Right off the top. This must be done consistently; just like your rent or car payment.  You have to make this payment to yourself a priority. Start small because you want to set yourself up for success.  Maybe $25 per paycheck. If you start off too large, you may be tempted to skip the payment to yourself when you need a set of tires or to replace your hot water heater.

If your employer has a retirement program through payroll deduction, take advantage of it.  If they offer any sort of match to what you contribute, utilize and maximize the match. 

Ride the highs and lows.  Take advantage of dollar cost averaging. Invest a constant dollar amount each paycheck.  Say $100 dollars.  When prices are high and the market is expensive, you will buy fewer shares.  When prices are low, you will be buying more shares.  Over time, the average cost will be much lower than the average price. 

Create a simple budget.  Stick to it. Do not sacrifice but make thoughtful choices before spending.

Compare an interest-bearing account to cash.

Instead of buying a bunch of junk for your kids, deposit money into an account for them.  Start this early. 

Also, purchase a stock for your kids in some business, like a favorite sports team or restaurant. It will generate an interest and a sense of ownership.  Plus, you will teach your kids about investing money instead of just buying stuff.

Set a limit on usual purchases like movies and make-up for example.  For any amount over that set limit, create a 24-hour cooling-off period before allowing the purchase to be made.

Realize the value of your money and the real level of satisfaction.  Will spending $80 on a video game give you the same level of satisfaction for years to come as an $80 baseball mitt?  One may keep your attention for a month or two.  The other may be useful to you for years.

Teach them about interest, earning and paying. What do you get for the interest you pay? For a mortgage, you get a home as well as possibly an investment and a tax write-off. Student loans may provide you with an education.  Then there is credit card interest.  What are you really getting for that interest? What is the real cost of the stuff if purchased with a credit card and paid off over time? 

Also, make them aware of scams and get-rich-quick scheme, especially online when you have no idea with whom you are really interacting.  There is no Nigerian prince who needs your help to get their money, priceless wine inventory or dragon gold out of any country; or needs you to prepay tax on the winnings; or needs your help to get a nationally recognized business to pay their debt through your checking account, or social security number, IRS warrant or jailed grandson released. etc. Many of the technology-based payment options can be reversed within 24 hours of payment.

Past performance is not indicative of what the future will bring.

Finally, and most importantly, do not allow money to change you.  Remember your values and who you are. Donate to charity. Not everyone had the same opportunities, assistance or guidance as you. Stay humble and kind. 

Thanks for reading until the end.  I hope you found the research helpful and interesting. Please feel free to share with me any suggestions or successes you have had.

Kelley Reynolds from Aegis Learning

Kelley’s optimistic outlook on life guides her belief that change is possible!

Her easy going instruction style mixed with a dry wit make her an entertaining educator. She has instructed professionals throughout the nation as well as internationally. Kelley has earned a Master of Business Administration and possesses a bachelor’s degree in Criminal Justice, both from University of Nevada, Las Vegas.

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