Last week I saw a tweet from Adam at Money Savvy Daddy that said, “If you could teach your child just one money/financial lesson… what would it be?”
I love to learn what people are teaching their kids so I was eager to read the responses. Not surprisingly, many people said, “Save!” Saving is definitely important, but saving without context… how can that be successful? What are you saving for?
My answer was, “Think about what you actually want, and do, be or get that thing. You don’t need everything and you don’t need to do what everyone else is doing. What makes YOU happy?”
To expand on that a little bit more, I would say — figure out what’s important to you and spend wisely on that.
Think about what you actually want, and do, be or get that thing. You don’t need need everything and you don’t need to do what everyone else is doing. What makes YOU happy?
— Maggie (@natbankofmom) March 8, 2018
When I was young, I was lucky to have a parent who would talk to me about money. Saving was a regular part of my financial education.
Once I left home, though, and for a long while, I was caught up in the program.
You know — the one that says you should go to college, get a good job, get married, buy a house. Have some kids, a nice car, take some nice vacations, have the newest electronics, buy a bigger house. (I think there’s supposed to be a dog and a white picket fence somewhere in there as well.)
After a lot of (active) participation in the program, I realized it wasn’t making me happy. I was spending and spending, trying to do what everyone else was doing — what I thought I should be doing — but I always felt behind.
I didn’t know what was important to me and I wasn’t spending wisely.
I was frugal and would save, but I didn’t know why or what I was saving for. I wasn’t getting anywhere.
That’s because I didn’t know where I wanted to go or what I actually wanted to do.
Things are different now
I’ve talked about my story before — my financial awakening if you will. What allows me to actually keep money in my checking account. How I figured out how much it takes for me to be comfortable every month.
Now that I have some basic systems in place and an emergency fund, I can focus my energy on what’s important to me.
Before I spend money on something, I try to ask myself a few questions. Is this something that will move me towards my goals? Is this purchase in line with my values? Will this purchase help me become the person I want to be?
Note that to be able to answer these questions I have to have figured out my goals, values and who I want to be.
(It also goes beyond just spending. I made the jump from a “regular” job to freelancer last year after determining that flexibility and creativity were important to me. I saved for the transition and spent strategically on education and setting up my new company.)
So my advice to my son would be this — figure out what’s important to you and spend wisely on that.
Saving is important — no doubt. But spending wisely is too.
What about you? If you could only teach your kids ONE financial lesson, what would it be?