11 Money Lessons to Teach Your Kids

Since we've discussed what money skills kids should know before they leave home, I was interested in seeing if the authors of Lessons to My Children: Simple Life Lessons for Financial Success, Wealth, and Abundance agreed with those thoughts. Here are the 11 lessons they list (with some explanation from me where needed):

Lesson 1: Pay yourself first.
Lesson 2: Patience pays. (Save over a long period of time.)
Lesson 3: Write yourself a "reality" check. (You need a budget so you can see what you're really spending.)
Lesson 4: Have a game plan.
Lesson 5: Limit your debt.
Lesson 6: You get what you pay for.
Lesson 7: Balance risk and reward.
Lesson 8: Learn investing 101.
Lesson 9: Assemble your team of experts.
Lesson 10: Being organized pays dividends.
Lesson 11: Ask what your taxes can do for you.

A couple comments from me:

• Pretty basic stuff. Most of the important pieces are covered. Also, this could be a list for anyone wanting/needing to learn about personal finances -- not just kids.
• That said, I don't see anything about careers. It's interesting to me that most personal finance books leave out this fundamental part of managing your finances. Do you think it's because they assume that your career/earning potential is "set"? Or is it some other reason?

Comments

[Elizabeth]

That's interesting. Never thought about that. However, it should be mentioned because one's career choice will definitely impact on following those basic money principles for better or worse. If one does not choose wisely their career choice in terms of financial gain and not just "passion" it will be very difficult to follow those rules.

[Christy]

Need something about not trying to "keep up with the Joneses' kids". My child seems to think she should have everything that other kids have, even if it is ridiculous, like a 5 year old having an iPad (actual example from elementary school).

We don't give in to this, but it still is frustrating. Our response is to allow her to earn some money and she can save up to get what she wants. By the time she gets $500 I suspect she will have long forgot about the iPad. ;)

[Budgeting in the Fun Stuff]

I would guess that "career" is left out since it's so individualized. Not everyone may want to concentrate on their career or even get a normal job (I have no aspirations to advance in anything except maybe my blog), but everyone has to know how to manage the money they have. That's just a guess though.

[Squirrelers]

I agree with what Budgeting in the Fun Stuff said about "career" being left off. To add to that, if career was in the list, it might imply that salary is a primary determinant in choosing one's career path. Which it might be for some, and that's perfectly fine. Many people choose to do what makes them happy and what they are good at, and balance that with income potential. This coming from someone who went back to school full-time to get an MBA.

As far as the list is concerned, I think they cover some great points. Personally, I think that the most essential out this list would be:

- Limit your debt
- Pay yourself first
- Learn investing 101
- Have a game plan

[Steve]

Assemble your team of experts? Is this team the child's parents? Or a real financial expert? I also think this list is pretty basic, but still a good start that can lead to a serious discussion about financial planning.

[Nick]

The career advice could be something that is not specifically related to salary like "choose a career you're passionate about" or "work hard for your money and your money will work hard for you." These are cliche (and the second is not really "career" advice, but just "work hard" assuming those who work hard will be careful with their money). But they relate to good career choices that create a positive personal finance environment.

[MBTN]

Can somebody explain what "ask what your taxes can do for you" means?

[Jason @ Redeeming Riches]

I'm very surprised there wasn't anything on there regarding "delayed gratification"! This is, in my mind, where most of us get into trouble with racking up credit card debt. We want it now, rather than saving up for it!