Tuesday, November 20, 2012

Teach Children Money Management

Parenting is a major life altering step, and I am forever baffled by parents who fall in love with their children and buy them what ever they want. 


 I understand perfectly that we want to see our children happy, but the ultimate goal of raising children is to raise competent adults. Buying children what they want is a sure fire way to disillusion your children and send them on the path to failure and poverty.

Did you ever really think about that?

Ultimately, what do yo want for your children? They won't be adorable bundles of joy forever.

How do you picture them as adults? 

Well, when I picture my son as an adult, I picture something wonderful, like Mitt Romney. I am certainly not the only one shooting for the top on this hope and dream. I picture a happy man of strong solid morale, with the ability to take care of himself in a big way. I don't see and uneducated factory worker who hates his job because that is not what I want for the little person I love so much.

So, how am I going to get my son to the top and keep him from falling to the bottom?  This is what parents need to ask themselves from the beginning. It is never too early to lay the foundation.

In the United States we are lucky because we have the opportunity to succeed no matter what our background is.  If we have the right mindset we have the chance to make a fortune and therefore provide well for our families.

One of the biggest stumbling blocks the average person has when it comes to raising a child into an adult with the tools to become financially stable is that many people of modest means resent success. Before you start denying it...

If you have an attitude that is negative towards money, wealth and success, you will always find ways to keep yourself poor. If you have allowed yourself to believe that "money is the root of all evil", "rich people are greedy", or "anyone with a lot of money is a crook",  your habits and attitudes will rub off on your child, forever keeping your family down.  In order to get over your financial problems you must truly believe that it is not a sin to achieve. Otherwise your subconscious mind will never allow you to become an "evil  rich person."

These jealous and negative emotions that you may harbor must to be thrown out with the dirty diapers because they will breed failure for you and for your young innocent minds that are bound to absorb everything from you. 

No one wants to be called greedy, selfish, or a crook, and if your children hear you saying this, they will not strive for success and their financial failure will be a subconscious way of remaining a "good person." If your friends and family are comforting their lack of success with excuses such as, "I am happy with very little", and "money isn't everything", or "rich people are wealthy because they abuse us", just ignore their mindset and let them lick their wounds with these words while you take the higher ground, and begin doing things that they have no understanding of. Years from now they will wonder how your kids turned out so strong while theirs continue to ask them for handouts.

As a parent who wants the best for their offspring you need an open mind, and if you believe that rich people are bad, then its time to stop being narrow minded and look at some facts. 

The richest people in the world have traditionally given millions and sometimes billions away to charities. Rockefeller and Carnegie both gave billions of dollars away. The media likes to demonize wealth, which does not help our morale when trying to teach our children how to be successful. It is not uncommon to turn on the television and see an Andrew Carnegie documentary focused on how much money he made, without reminding us that Carnegie gave away almost 90% of his entire fortune by the time he died.

On a personal note. I was a student nurse in San Diego, and all of the student nurses were being sent to hospitals to get some clinical hours in. On one round of clinicals, I was sent to La Jolla, which was the upper class hospital. 

All the student nurses were booing and saying that they did not want to go to the "rich, stuck up hospital." Well, after our clinicals, all the nurses were eating their words when they had to admit that the patients at the wealthy hospital were actually very nice, and in fact, the nicest bunch of patients that they had ever seen. This got my attention because it was blatant discrimination that all these nurses had  about wealth. 

They naturally hated all the patients before even meeting them. How did they become so prejudiced? Maybe the watched Little House on the Prairie and hated Nellie Olson.  Television shows, books and the turmoil hungry media likes to stir the pot and feed the myth that rich people are uncaring and greedy.

 Just remember its not true, and don't allow yourself or your children to get caught up in it. Some of the meanest and nastiest people I have personally come in contact with are people of average means. 

They frequently displayed traits of being extremely greedy, mean, prejudiced and hateful. I worked as a laborer in my early years of being an entrepreneur and contrary to what the average television watcher will think, the wealthy people who employed me did not exploit me, humiliate me, or profit unfairly from by blood and sweat, but the middle class people were often mean, and spoke to me in a demeaning and hateful way. 

Now back to giving children what ever they want.

When you give children what they want, you and your children miss out on a very important lesson in life. A lesson that could result in a healthy building block to success, and can help build a solid fiscal foundation for the future. Once grown up, children can't simply smile and get what they want anymore. To give gifts out of the softness of your heart does not prepare you child for reality. No one other than you will ever be so soft.

Allowance is an important part of learning.

If your children do not have an allowance, they will not learn the basic concept of seeing their money disappear on things they choose to spend on. Financial decision making starts with the very first allowance. If you give a child $1, and he sees a candy for .75 cents, he has to decide if he really wants that candy or if he wants to save that dollar until he can afford something better than the candy.

This inner discipline is vital to self control with larger amounts of money in the future. Children need to understand that their money will not simply come back by nagging someone who has more than they do, such as you when they are young, and such as their friends, their boss, or even you again when they are adults.

A strong adult provides for himself. He does not blame others for what he does not have, but he makes it happen for himself. By not giving handouts, and repeatedly caving in whenever asked for something you are stimulating your child's inner entrepreneur, and forcing him to ask and wonder how on earth he can possibly get those things he desires.

Nagging, sulking, or indulging in jealousy towards those who have achieved will never result in anything positive. Have you noticed that there are more and more people expressing their dislike of "rich people?"

I have noticed this, and recall some of my relatives who achieved little in life constantly complaining that the Queen of England has it made, and the little people should strip her of her belongings, ect, ect. This mentality easily trickled down to their children who have naturally grown up into dysfunctional adults. They have become complainers with even less to offer society than their parents had. Would taking down Buckingham Palace solve anyone's problems? The simple answer is NO. Lets say everyone in England got a little something when the royal family was dismantled. The windfall the people would receive would be spent and then the little people would have one less institution to attack and blame for their lack of funds. Everyone would spend the "gift" they received and then it would be gone forever, but the royal family and all the money that it generates would be gone too. It would be destroying something that results in no change.

I can personally think of some of my family members who were given a lump sum of money from either a deceased relative, or a lucky day in Las Vegas.  They usually become happy and uplifted right away and then spend their way back to poverty just as some famous lottery winners have.

Why does this happen?  Simply because they are not good money managers. They did not learn the lesson when they were young with a small allowance, and now as adults they can quickly eliminate their money, no matter how much it is, and return to where they are typically in life. That could mean living paycheck to paycheck or it could mean, consistently being 10K in debt. Whatever the individuals "typical" situation is, people will find their way back to mediocrity no matter how much money is given to them.

Destroying the royal family, taxing the rich and begging your parents for money is not the answer. These are the answers that desperate people have for an issue that is much more complex.

Your children need to be better, and stronger adults than the typical person with no fiscal sense. That is what any good parent believes. But, they cannot learn to be better, and more financially literate than you are unless you yourself curb your own attitude and present a good, responsible role model.

 Financial irresponsibility and lack of understanding basic finances are what destroy the average person. You cannot solve money problems by taking from someone else so that you will have more to spend, because your lack of money management will forever lead you back to asking for more. Parents, the rich people, and the royal family do not have enough money to keep you going. Some people have learned that to get what they want they must learn the concept of money and they make an effort to discipline themselves into knowing how to make money grow. Imagine that!

Does that sound too good to be true?  It isn't.

How do you think the rich stay rich? They know how to make their money work for them. The poor work for money and the rich make money work for them. That means you must start somewhere. Instead of blowing your money on a huge screen television set, or a new Apple computer, you must make investments. One of the big differences between the rich and the average person is the rich invest and the middle class spend. You must have heard that the rich get rich and the poor get poor. Well, all your really need to do is emulate what the rich do instead of what the poor are doing.

Make investments with your money instead of throwing it away. This way your money will grow and grow. This is a basic concept and it is not digested easily within a few hours. If you are serious about making changes in your life that will ultimately affect your child's future, this frame of mind must be nurtured.

For more motivational and financial help to broaden your focus I recommend you read. The Secrets of the Millionaire Mind, and Rich Dad Poor Dad. I have them listed on the right side under, My Picks.

These books will give you a foundation for steering your mind on the right path to helping your children rise above the mediocrity that may have plagued your own family for decades. 


How To Teach Children Money

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