Your parents ever talk to you about money?

[Mai72]

What's wrong with talking about money today? What's wrong with your son/daughter saying "I want to get get rich! I want boatloads of cash!" What's wrong with that?

To me being wealthy means much more than buying things.

1) The most important and valuable thing money can buy you is time. Time is very limited. We only have so much time and it's over.

2) Contribute to society. Instead of being a leach, the wealthy are able to donate money to their charity. They can have a greater impact on their neighborhoods.

3) Freedom! To do what you want is an amazing feeling. Most middle class people wait until they're retired to go on adventures and live the life they've always wanted. By then, you're too old. Many retires have too much money and too little time. I don't want to explore the world at 60 or 65.

Those are just 3 examples why having wealth is great. Instead of demonizing and hating on the wealthy, we should take a page from their book. There is nothing wrong with getting wealthy, and we should encourage our children to do the same.

 

[Mai72]

My parents never talked to me about money.

It was always...

1) Rich people are unhappy.
2) Having money isn't everything.
3) Don't talk about money in public.
4) Lets all hate on the rich.

#3 cracks me up, because we all wake up, go to work for one reason! Too make money!

Sent from my SM-N920T using Tapatalk

 

[disappoint]

Money cannot buy you time. Nothing can buy you time. Once you spend time on something that time is gone forever.

Money buys you freedom and security.

 

[Mai72]

Money cannot buy you time. Nothing can buy you time. Once you spend time on something that time is gone forever.

Money buys you freedom and security.

What I meant by buying time, I meant being able to live the life you want today. While you're young and able. That's what I meant.

Of course, when the "Now" is spent it's over. But, it's nice being in control of the "Now."

 

[vi edit]

Very little talk about money in my house. I knew my parents didn't make much and both of my parents busted their asses and worked like dogs. They only thing my Dad ever said was "Go to college, get a good job and make money easier than I ever did". He's a mason and it's a tough, physical job.

This morning at the breakfast table I had a conversation with my eight year old about "payments". She was asking if we still had to "make payments for anything". To which I explained we still had to make payments on the house, one of the cars, and her Mother's student loans. To which I got a wrinkled up face.

She asked "Mommy had to pay for college". YES. Nothing is free we explained. Then we went on to explain how much houses cost. And how mortgages work. And how a $150,000 house ends up costing you $300,000 over 30 years.

This was with my 8 year old at 6:30AM at the breakfast table this morning. We don't shy away from conversations about that. A few months back I tried explaining to her how the "President doesn't make money" and a very, very high level of how the treasury system and inflation work.

It's never too early.

 

[Kaido]

My parents never talked to me about money.

It was always...

1) Rich people are unhappy.
2) Having money isn't everything.
3) Don't talk about money in public.
4) Lets all hate on the rich.

#3 cracks me up, because we all wake up, go to work for one reason! Too make money!

We all grow up with mental financial blueprints, which is a combination of what our parents teach us, how we interpret things, and a variety of other factors. We get some pretty funny ideas about money over time. The common catchphrase is "money is the root of all evil", whereas the correct phrase is "the love of money is the root of all evil" (which it's not, but that's a separate discussion!) - money is just money, it's just an object; it's how we think about it, talk about it, and act about it that makes it good or bad or neutral.

And it often turns into kind of a reverse racism type of thing...rather than the rich looking down on the poor, it's the poor judging the rich & making up phrases that make them feel better (rich people are mean, rich people are unhappy, etc.). I'd highly recommend listening to the audioboook "Secrets of the Millionaire Mind" by T. Harv Eker (as read by the author); he's a bit of a Billy Mays kind of guy & a lot of the information is fluff, but the most important thing he teaches is how to identify how you think about money & how to change how you feel about it: (the phrase he has you repeat is goofy, but it works because it starts to change your habit of financial self-talk)

http://www.amazon.com/Secrets-Millionaire-Mind-Mastering-Wealth/dp/0060763280

That's a really big deal for a lot of people because we use catchphrases as excuses to stop taking action & making progress with their financial situation. While money isn't everything, managing your finances is super dang important because money represents your work & sweat and enables you to do things like go to college, drive a reliable car, live in a safe neighborhood, buy nutritious foods, have a good retirement, etc. America has insane levels of credit card & other debt because it's easy not to think about your spending.

Another really good intro book to finances is "Rich Dad, Poor Dad". Again, it's pretty lightweight introductory stuff, but it has a few key principles that make it worth reading:

http://www.amazon.com/Rich-Dad-Poor-Teach-Middle/dp/1612680011/

One of the biggest lessons is his explanation of income, expenditures, assets, and liabilities:

For example, it changed my mind from thinking of a house as an asset, but rather as a liability, which really gets people all up in arms. So defining income as money in, expenditures as money out, assets as things that make you money, and liabilities as things that take money away from you, his point is to invest in things that create cash flow, not appreciation, especially since there's no guarantee that your house will sell at a profit over what you paid for it: (re: the housing market crash)

http://www.richdad.com/Resources/Ri...3/rich-dad-scam-6-your-house-is-an-asset.aspx

Pushing that out even further, there are plenty of neat systems to adopt to help you financially. A lot of people don't realize that achieving financial independence & retiring early is even possible for them. Here's a good starter guide for that:

https://www.reddit.com/r/financialindependence/wiki/faq

So anyway, yeah - we all grow up with a certain worldview about money, which isn't necessarily correct & often prohibits us from doing anything to improve our financial situations because it's easier to keep the status quo with comfortable self-talk & catchphrases than it is to develop a personal financial system that meets your needs & desires. And it's always easy to blame others, like the "1%", for our woes. I remember they interviewed a billionaire coming out of a building the Occupy Wallstreet guys were camping in front of...he went out to see what was going on & talk to the people. One guy was really uptight & the billionaire asked him what he was doing there...turns out he had been there for two weeks yelling & holding signs, and when the billionaire asked him "what about your job?" he didn't have one, he was basically just loafing around complaining instead of working, whereas the billionaire guy was in there working 100 hours a week. We can make excuses, or we can buckle down & get to work.

 

[swamplizard]

Greetings Mai72,

I don't remember ever talking to my Mom about money. She was a single Mom who worked her entire life making less money than her male counterparts. Yet, I don't remember her complaining one time. And even though my Dad didn't help financially at all, Mom still managed to give me a couple of bucks a week in exchange for doing some chores around the house. $2 went a long way back then, I could buy 20 comic books!

 

[Kaido]

What's wrong with talking about money today? What's wrong with your son/daughter saying "I want to get get rich! I want boatloads of cash!" What's wrong with that?

To me being wealthy means much more than buying things.

1) The most important and valuable thing money can buy you is time. Time is very limited. We only have so much time and it's over.

2) Contribute to society. Instead of being a leach, the wealthy are able to donate money to their charity. They can have a greater impact on their neighborhoods.

3) Freedom! To do what you want is an amazing feeling. Most middle class people wait until they're retired to go on adventures and live the life they've always wanted. By then, you're too old. Many retires have too much money and too little time. I don't want to explore the world at 60 or 65.

Those are just 3 examples why having wealth is great. Instead of demonizing and hating on the wealthy, we should take a page from their book. There is nothing wrong with getting wealthy, and we should encourage our children to do the same.

I think the core point of not wanting your kids to follow the "I want to get rich & have all the toys I want & be set for life!" is so that they don't turn into snots. Or even worse, lazy people. I have a friend who is the son of a rich guy & he has had a huge struggle in life because he's literally never had to work for anything ever. He's lost several jobs due to laziness, he's lost a wife due to laziness, and he's depressed because he never feels good about himself because he's never actively, regularly contributing to society. He's a great guy otherwise, but his work ethic s

Also, you can have all of those things you listed on a budget - don't be fooled that those things are only available to the rich. Look at how many posts you & I have...we both have plenty of free time already, haha. We may not be able to donate large sums of money to build libraries or hospital wings, but you can support the Girl Scouts by buying cookies or help out at the local soup kitchen by serving the homeless. And you can still go out & do adventures right now if you really want to, especially with the FI/RE stuff mentioned earlier. Read up on Mr. Money Mustache's blog to start out with:

http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/

You can even go more extreme if you want to...join the Peace Corps or Doctors Without Borders or Projects Abroad. I have a musician buddy who worked on a cruise ship for a long time & got to travel all over the world and get paid for it. The only thing holding anyone back is themselves...things like fear, catchphrases, habits, laziness are the main showstoppers, whether it's for traveling or finding a new job or working on their finances or anything really.

 

[Brainonska511]

I don't remember specific talks, but I remember seeing how my parents responsibly handled money and other general conversations. I'm sure I picked up stuff here and there in everyday conversation. Or just learning how to use money at an early age (even though, those would only be small amounts).

For example, it changed my mind from thinking of a house as an asset, but rather as a liability, which really gets people all up in arms. So defining income as money in, expenditures as money out, assets as things that make you money, and liabilities as things that take money away from you, his point is to invest in things that create cash flow, not appreciation, especially since there's no guarantee that your house will sell at a profit over what you paid for it: (re: the housing market crash)

I agree. I always thought of a house as first and foremost a place to live. The "investment value" thought has always been a distant additional attribute with no guarantee, while the liability portions could be much greater and more certain (upkeep costs, repairs, remodeling, etc...).

 

[Exterous]

Growing up it was more general concepts as opposed to specifics. Sometimes I wish it was a bit more specific as I got myself into some hard times early on but then I wonder if that wasn't for the best. Those struggles seared some hard lessons into my memory and those general concepts gave me the foundation to fix my issues and I am pretty happy with where my handling of money ended up. Regardless I am certainly grateful for the education as I know its more than many kids get

3) Don't talk about money in public.

There is a lot of truth to this one unfortunately. Money, the perception of money, emotion and assumed inequalities can do weird things to people. I've seen otherwise loving families torn apart by the thought that someone else was getting a larger inheritance than someone else. The best wills\trusts have everything with an obvious dollar amount assigned (sometimes by appraiser) and whose individual distributions match on a spreadsheet

Perception of money is distorted by what people want to see. It's easy to look at how someone lives their life and make assumptions. Often priorities on spending money leads to others making assumptions on underlying finances. Travel a lot? Thats because you have a lot of money not because you drive an 11 year old car and don't have kids. Have a really nice house and car? You must have a ton of money when they might actually be leveraged up to their eyeballs

his point is to invest in things that create cash flow, not appreciation, especially since there's no guarantee that your house will sell at a profit over what you paid for it: (re: the housing market crash)

Technically there is no guarantee on cash flow either. Dividends get cut, companies go out of business, rental properties go unfilled. While I think his point has merit in regards to how much people are spending on their house* the combination of appreciation and cashflow usually does far better than relying on one over the other when viewed over longer time frames.

Esp the middle class where ~65% of the wealth is tied to the house.

 

[Kaido]

Money cannot buy you time. Nothing can buy you time. Once you spend time on something that time is gone forever.

Money buys you freedom and security.

I think even more to the point, money buys you more options with what to do with your time. If you're working for a living, then those first 8 hours are given to your job, and then whatever you have leftover at the end of the day is governed by available funds (yay Netflix). If you're independently wealthy, then you're not required to have a job to make ends meet, so you now have more options with that same first 8 hours - you can keep a job, or go do something else. You have the freedom of not having to work at a job, while still retaining the security of having funds to fall back on, despite not having to work.

But I don't think it's that big of a deal, unless you personally need to have a lavish lifestyle, which is fine, if that's a personal goal of yours. But it's too easy to get depressed without a job...it's too easy not to contribute or socialize if you aren't required to get up & go to work every day. Look at the string of celebrity suicides & accidental deaths - actors, musicians, etc. - when you don't have to work, it's easy to get bored & turn to the party circuit & abuse drugs & alcohol. Philip Seymour Hoffman, Amy Winehouse, Heath Ledger, Michael Jackson, Chris Farley, Kurt Cobain, River Phoenix, John Belushi, the list goes on & on.

Not that you can't do that living a non-wealthy lifestyle, but it certainly makes it easier because you have more free time & more money, which gives you more access to that stuff & the associate lifestyle that goes with it. And going back to living without contributing, there was a good article published a few years ago called "Retirement will kill you":

http://www.bloombergview.com/articles/2013-06-11/retirement-will-kill-you

The opening quote in that article is great: "The best prize that life has to offer is the chance to work hard at work worth doing" - Teddy Roosevelt. Money is nice, but having a job that you like doing is even better, because you can be unhappy doing a crappy job for millions of dollars & dread going to work every day, and you can be happy doing a great job that only pays average. Of course, getting paid awesome to do awesome work is also awesome :awe:

 

[Kaido]

Technically there is no guarantee on cash flow either. Dividends get cut, companies go out of business, rental properties go unfilled. While I think his point has merit in regards to how much people are spending on their house* the combination of appreciation and cashflow usually does far better than relying on one over the other when viewed over longer time frames.

Esp the middle class where ~65% of the wealth is tied to the house.

Yeah, there's always more to the story, but he has a good point - your house is costing you money, making it a liability, which is a hard pill to swallow for a lot of people. I like his 4-square chart because it really simplifies how you look at finances, and most people don't look at money anywhere near anything like that, and they start to realize it when you ask them "how many income-generating assets do you currently have?" Getting & staying rich isn't overly difficult, but it does require a change in thinking because it's just as easy to spend a lot of money as it is to spend a little money. I know plenty of people making $100k+ a year who are living paycheck to paycheck because they simply don't know how to manage their finances.

 

[Ryland]

My parents NEVER talked about money growing up but that was the way they were brought up. I dont bring up finances with my son because keeping us afloat is my problem, not his but he also saves most of his money so Im not worried about that. I do answer any questions he asks where money is concerned though.

 

[Kaido]

Growing up it was more general concepts as opposed to specifics. Sometimes I wish it was a bit more specific as I got myself into some hard times early on but then I wonder if that wasn't for the best. Those struggles seared some hard lessons into my memory and those general concepts gave me the foundation to fix my issues and I am pretty happy with where my handling of money ended up. Regardless I am certainly grateful for the education as I know its more than many kids get

You know, I don't think it should necessarily be up to the parents (because there's no consistency in what any given set of parents know about finances), but rather schools. Managing your finances isn't a talent, it's an education & a willingness to adhere to a system, whatever that system may be. Really, it just boils down to "don't spend more than you make", and from there you can add on some smarts (ex. 401k, rainy-day fund, etc.).

I remember when I first moved out after high school...the first month, I spent all of my non-bills money on food & supplies, having no idea what the actual cost of living (and shopping) were. Flat broke for the rest of the month, it was terrible - had to live off my previous roommate's ramen stash for a few weeks And it's not like most people's parents ever sit you down and say "now son, let me explain what a Roth IRA is...". I think it'd be far better taught in school, like starting in freshman year of high school with a basic paper budget & working up to 401k's, IRA's, CHET accounts, how to use credit wisely, how to avoid debt & how to get out of debt if you do fall in from poor spending habits or medical emergencies or what have you, how mortgages work & how to finance a house, deciding whether or not you want to get a student loan to help pay for school, etc. Especially in today's society where getting a college education is almost a death sentence for your financial picture after college.

None of it is hard, but learning what's available to you, how to use it, developing the habits, knowing what the traps are...I think that is something that should really be taught from a young age over time so that you're not blindsided with it as soon as you venture out on your own. And it's hard to pin it on the parents because, based on the average state of finances for a lot of people, it's not like most people themselves were educated on managing their money. For example, I had no idea a 529 even existed until someone mentioned it years after I had kids! But like you said, sometimes those early struggles are for the best...once you get burned on the stove, you usually don't touch the stove again, and the same principle applies to finances (although it'd be nice to not have to get burned at all! haha).

 

[PricklyPete]

My parents did discuss money. My Dad always worked hard and despite the fact that we grew up in an expensive part of the country with 6 siblings, he always made things work. It was easiest for him to explain why we couldn't afford something by being pretty transparent with his finances. This gave us a lot of respect for money and how hard my Dad worked to support our family.

My wife's father worked very hard as well, but never brought up finances. My wife was an "oops" baby with only two way older sisters (16 and 20 years older). By the time my wife showed up, her parents were smooth sailing financially, so there was less need to share the financial situation. Luckily her parents still made my wife work very hard on their farm and never truly spoiled her...but she still did not have a good understanding of finances.

Luckily my wife is a natural penny pincher (her natural reaction to ANY price is " l don't want to spend that much money"), but she never put any thought into the future.

It has taken a while, and a lot of spreadsheets, but she has started to come around to being more vested in our future. I am very transparent with our finances...actually even more so than my Dad. Everyday I send my wife a full accounting of our monthly budget/investment overview. It keeps both of us in check and provides an overview of where we are headed.

After seeing how our parents different approaches affected us, I have put a high priority on discussing finances with my children so that they have a respect for it and take ownership of their own future.

 

[cbrunny]

I talk to my parents about money every time I see them. They raised me with a bank account. Had a paper route by the time I was 12 & became a Lifeguard-in-training at 13. From those two things, I was forced to learn how to manage money. Who taught me? My parents.

Parents that don't talk to their kids about money are not good.

 

[Fritzo]

Took me 45 years to figure out money

 

[Strk]

No, but my mother is terrible with money. All she knows how to do is accumulate debt and not pay it back.

 

[purbeast0]

i have had a job since i was 14, and prior to that i was making money baby sitting, selling lemonade, raking yards, etc. i've always been "earning" money in a sense, even if it was doing chores and stuff with an allowance.

my parents divorced when i was 7 and i was raised by my mom with 2 other siblings and money was really tight. i have grown up frugal.

my dad was a doctor who i thought was raking in a lot of dough back then. he had his own practice and was doing pretty well, but since my parents were split up, there was a lot of money tied up in child support and allimony and all that shit.

anyways, once my dad passed away 7 years ago, i actually saw one of his pay stubs and was shocked to see that he didn't make nearly as much as i had thought. i'm only 34 now and i already make more than he was pulling in at the age of 57 when he passed away. at the time i wasn't making more than him, and not even close to what i'm making now, but i only wish he could see how well i'm doing for myself.

my first born just turned 1 and i am going to try and instill work ethic into him from a very young age. i want him to have everything of course, but i also don't want to spoil his ass. i want him to understand what hard work is and the value of the dollar, just like i did when i was young. i think it helped me turn out alright.

 

[purbeast0]

My parents never talked to me about money.

It was always...

1) Rich people are unhappy.
2) Having money isn't everything.
3) Don't talk about money in public.
4) Lets all hate on the rich.

#3 cracks me up, because we all wake up, go to work for one reason! Too make money!

Sent from my SM-N920T using Tapatalk

only poor people say 1,2, and 4.

talking about money in public, as far as what you make and how much things cost, really has very little benefit. i've learned this over time and i actually never talk about my salary or how much things cost to friends and family. absolutely nothing good will come out of it. my siblings guess what i make but they really have no clue. my mom knows i'm over 6 figures but that is as much as she knows because i told her i had hit my goal of getting that before i turned 30.

it's funny though when i hear other people talk about how much money they make then they throw out a number like $80k. yeah good for you but that is not money to be bragging about by any means.

 

[Kaido]

I talk to my parents about money every time I see them. They raised me with a bank account. Had a paper route by the time I was 12 & became a Lifeguard-in-training at 13. From those two things, I was forced to learn how to manage money. Who taught me? My parents.

Parents that don't talk to their kids about money are not good.

What if the parent's parents didn't talk to them about money, and so the parents have felt stuck all of their lives as well? Could just be that they inherited the problem too. This is why I think personal finance should be taught in schools...there's no consistency between any given set of parents regarding financial training. Your parents could be alcoholics or spendthrifts or millionaires & still not teach you the basics. Maybe you luck out & get parents who do, or are smart enough at a young age to get a handle on the basics, or maybe you have to learn the hard way. It's all luck of the draw until you get to the point where you realize you need to take personal responsibility for the finances under your management.

 

[Exterous]

You know, I don't think it should necessarily be up to the parents (because there's no consistency in what any given set of parents know about finances), but rather schools. Managing your finances isn't a talent, it's an education & a willingness to adhere to a system, whatever that system may be.

You hit on the key problem with trying to do it in schools:

developing the habits

There was (still is?) a big push to have financial education in schools but its running into a huge hurtle - almost all studies done on financial education in school shows it doesn't work.

http://business.time.com/2013/10/25/financial-education-is-all-the-rage-but-does-it-work/
https://thebillfold.com/the-problem-with-financial-literacy-is-that-it-doesn-t-work-ce79d2800d56#.okkyryolu
http://www.hbs.edu/faculty/Publication%20Files/13-064_c7b52fa0-1242-4420-b9b6-73d32c639826.pdf
(and just in time to be included: )
http://www.npr.org/sections/ed/2016/04/13/473561841/not-all-financial-education-is-effective-here-are-4-ideas-that-work

There is a notable 'decay' of financial education information. Likely this is because good financial habits conflict with some deep seeded emotional ones. The concept of delayed gratification as it relates to saving for something in 30+ years, is a tough benefit to visualize and not something typically practiced among living organisms. Then there is the societal pressure to keel up with the Joneses. Not to mention the constant barrage of ads and marketing trying to make things irresistible to you so you open up your wallet.

Building up defenses or indifference against these pressures isn't something that can be completed in a few classes or even a couple of years. The most promising study on financial education was one where children had the lessons reinforced constantly over 10 years. Its unlikely schools will have the ability to consistently fit in the lessons with the curriculum pressure they are already under. There are just some things that parents will have a notably greater impact on than schools and this happens to be one of them

The next best thing is called 'Just in time' education but thats something schools would be even worse at (aside from a class on student loans). Basically its a quick education about a specific action\product\offering that occurs immediately before the financial action. Like a quick education on mortgages shortly before buying a house

 

[JulesMaximus]

My parents never talked to me about money.

It was always...

1) Rich people are unhappy.
2) Having money isn't everything.
3) Don't talk about money in public.
4) Lets all hate on the rich.

#3 cracks me up, because we all wake up, go to work for one reason! Too make money!

Sent from my SM-N920T using Tapatalk

LULZ, those are things poor people say to make them feel better about themselves.

 

[JulesMaximus]

Very little talk about money in my house. I knew my parents didn't make much and both of my parents busted their asses and worked like dogs. They only thing my Dad ever said was "Go to college, get a good job and make money easier than I ever did". He's a mason and it's a tough, physical job.

This morning at the breakfast table I had a conversation with my eight year old about "payments". She was asking if we still had to "make payments for anything". To which I explained we still had to make payments on the house, one of the cars, and her Mother's student loans. To which I got a wrinkled up face.

She asked "Mommy had to pay for college". YES. Nothing is free we explained. Then we went on to explain how much houses cost. And how mortgages work. And how a $150,000 house ends up costing you $300,000 over 30 years.

This was with my 8 year old at 6:30AM at the breakfast table this morning. We don't shy away from conversations about that. A few months back I tried explaining to her how the "President doesn't make money" and a very, very high level of how the treasury system and inflation work.

It's never too early.

My mother-in-law paid for my wife to get her degree. Of course, her degree didn't really help her at all in her career as she is self-employed. She could have accomplished the same success without it.

I'll talk to my son about anything. He does ask some great questions but this thread reminds me that maybe I should bring up topics to discuss like this one from time to time.

 

[dave_the_nerd]

No, unfortunately.

Fortunately, my parents talked to each other about money, and I am both fairly clever and have good hearing. I'm also a snoop. So I actually was able to figure out of most of what I needed to know anyway, combined with some school exercises in household budgeting and so on.

Actually kinda shocked my parents in high school when they did try to talk to me about money, and I rattled off a bunch of numbers about their mortgage payments, income, budgeting priorities, stuff I'd heard my uncle (a loan officer and my mom's unofficial financial advisor) tell them, etc., not quite precise but in the ballpark enough that they were like, "well... I guess we don't need to have this conversation then?"