What should parents be focusing on to ensure their kids’ financial future?
When speaking to audiences all over the world, I often ask this question:
“Why do you want financial freedom? ”
No matter what country or town I am in, a significant proportion of the audience will say this:
“I want it for my kids.
I want to make sure my kids never suffer and ensure they have everything they want in their life.”
This is a fabulous sentiment but it’s a terrible reason for you becoming great at the game of money and wealth.
In this video I explain why that is and what you should be doing to really ensure your kids financial well-being.
Simon Sinek in his great book “Start with Why” explains why our motivation, our why, is THE most important driver in our success.
If you truly want your kids to have a great relationship with money, to be able to live the life they want, to have the opportunity to express their essence and experience all the things they feel drawn to, you create your own financial freedom first.
Many parents sacrifice their own financial wellbeing, supposedly for their kid, but all they’re doing is perpetuating intergenerational poverty and dysfunction around money.
If you do not have your money stuff sorted, if you don’t know how to manage money, how to be free of debt, how to create and grow assets, how to protect yourself and how to feast off your investment sustainably, how will you ever teach these things to your kids?
Tony Robbins says our lives are always a message. For some their lives will be a message of inspiration and possibility, for others their lives will be a warning.
If you don’t sort out your own money stuff and ensure your own financial freedom first, you are more than likely going to be a burden to your kids later in life, and rather than being an inspiration you will be a warning of what not to do.
The facts tell a devastating story of inter-generational financial illiteracy. In this age of unprecedented opportunity and abundance:
- two out of three adults will, at some point in their life, have to rely on either their kids, friends, family, charity of strangers, or the government to look after them financially.
- 5 in 7 retirees will not have enough invested to maintain their lifestyle when they have to stop working
- 3 in 7 retirees will have to find some form of employment to make extra money just to survive, let alone thrive.
If you really care about your kids, you are going to make yourself number one and you’re going to choose financial freedom for you first.
In the words of Dave Ramsey,
Kids learn by modelling, by watching, not by what we say.
GIFT #1 – Being a financial inspiration, not a burden is the first financial gift you can give to your kids, and the first step in your kids becoming money savvy.
GIFT #2 – Give your kids money skills, not money.
Teach your kids the six core money skills that every money-savvy kid and money-savvy adult needs .
Ensure they have these embedded in their life through practice. You can start teaching your kids about money and core money skills from the age of three. YES, that young! They understand this stuff far more than we adults think.
Kids catch on to investing concepts way faster because they haven’t yet been poisoned with all the negative money beliefs that most adults have to wade through to get to their money stuff.
Do not underestimate this. There is no better way to teach your kids that learning it yourself.
Gift #3 – Have empowered, open, clean and honest money conversations with kids. Hiding money stresses or not talking about money is not serving your children or anybody in your life.
If we don’t learn how to have clean, uncharged money conversation we teach kids that money must be a bad thing, a shameful thing, a dirty thing, a scary thing, a power play thing, a confusing thing…
If kids only ever hear Mum and Dad talking about money in an angry way or a stressed way or a frightened way – that’s all they will know.
This is how we can create and pass on really devastating associations about money and wealth for kids that continue on into their adult life.
Instead learn how to have open, clean money conversations.
Get kids involved in your monthly money date, and whilst you’re learning about your investing, share that with your kids too.
At the recent Financially Free You Live Event in London, one of the attendees shared an amazing story.
She had joined the Savvy Investor Training program a few months earlier and would leave her laptop open with the training videos playing while she was cooking in the kitchen, doing housework, pottering around and so on.
She has two boys, a 9-year old and 11-year old. A few weeks into the training, the 11-year old came to her and said, “Mum, I wanna invest. Can you teach me how to invest?”
First, she went like – “whaaaaaattttt??? – How are we even having this conversation?”
Her son’s reply – “You know that lady on the laptop, the one you’re always watching, the one with the blonde hair? I wanna do what she’s been telling us to do.”
She was amazed because she hadn’t even realised that her son, Zeus, had been watching all of these videos too and was saying, “Yeah, there’s these index tracker things and I want to invest in LEGO. Mum, show me how to do this?”
Never underestimate your kids’ power to absorb.
Unfortunately you and I can’t invest in LEGO as it is a privately owned company, but Zeus found that the next biggest toy companies Mattel and Hasbro are listed in the S&P 500 – so he invested in that.
He knew all this language and how to just by over hearing the training videos.
He then got excited about the third asset group outlined in the Investment Pyramid, business, and created a skin cream, because his younger brother has eczema, which he now sells.
By choosing to change her own relationship with money and getting training and support , AND, making it available to her sons, their whole future trajectory was changed.
Zeus has a whole new relationship with money and wealth than he would have had if he hadn’t overheard those videos.
Knowledge has given him this gift – not money.
Gift #4 – Give your kids independence around financial choices.
Start giving them financial responsibility for an element of their own budget from around the age of seven so they can learn how to make their own financial choices.
But you can start money lessons way sooner, and from three you can help them to start understanding the consequences of their choices.
Give them independence.
Let them see the relationship between money and the choices they make.
Let them experiment with small amounts.
If you over-control every aspect of their life, they’re never going to learn.
I see so many people depriving their kids of money skills, they don’t involve their kids in empowered money conversations, don’t give them independence and responsibility for their spending, and…
Suddenly the “kid” pop’s out into the world at 18, 19, or 20, they’re being offered debt and all sorts of things, and they have no clue.
You wouldn’t do that to a kid in terms of learning to walk.
You encourage them to walk while you’re making sure they also have the key skills they need to be able to learn safely.
Give that to the kids in your life.
In the comments below I’d love to know:
- How do you help the kids in your life master this thing called money (if you do), and in what way could you start doing it more?
They might not even be your own kids – I don’t have my own kids, but I have the privilege of being an AWESOME (and humble) Aunt to 9 nieces and nephews and with everyone we’ve had empowered money conversations and training.
Every small step counts, and together, we make this world a more conscious and empowered place around this money stuff by sorting out our own money stuff first – and then sharing it with others.
Keep taking those steps, and keep living that juicy, wonderfully wealthy life now.