Adulting 101; financial and investment advice to kids, I will tell you mine, please tell me yours.

I have two kids and we often talk about “adulting” the act of being an adult. My kids told me this term, and we just kept using it because it seems so appropriate. So, I thought I would write this post about the financial advice I gave my kids and the goals I have tried to teach my kids about adulting and financial independence. Its important to invest in your kids financial IQ no matter how boring they say it is and they will thank you later.

It’s my hope that after read this post you will comment about the nuggets of wisdom you taught your kids.

This way, this post can get longer and wiser over time...

Budget
I told my kids they should always have a budget, so they know how much money they need to live. I think this is important for a number of reasons, but a few which come to mind include knowing how much you need to make each month to live and for peace of mind. It helps I think to calm your thinking and eliminate your fears a bit to know you are making enough to pay your bills and be comfortable.

Savings
I told my kids to save money every paycheck, to build up 3 months worth of living expenses. This is hard to do, but not impossible. It is a good goal, my kids enjoyed pursuing it and once they achieve it something magical happens; they become peaceful and self-confident. I have several adopted kids and they were sometimes anxious types due to their circumstances and this is one of the most important goals for them to achieve emotional peace and calmness. In fact they often tell me that this was one of the most important things I taught them. It had the greatest effect on them of anything.

Living below your means
This is a tough one, because it’s natural? Or perhaps more accurately put normal to live at or above your means. This is perhaps one of the greatest killer of peace and calmness of the soul I know of... I encouraged my kids to budget and stick to it. Then when they get a raise, have a little celebration, but don’t celebrate by taking on more bad debt. I explained that if they exercised restraint with their first several raises and saved them instead of spending them, they would achieve their goal of three months expenses in the bank much faster. My kids now tell me that this was one of the most important rules because it was the one which they could see so vividly.

Invest in performing assets.
I prefer that my kids have a small portfolio of dividend paying stocks, so they understand that an asset can both appreciate in value and pay you. One of kids was particularly captivated by the idea that at some point in time all their expenses could be paid this way and they wouldn’t have to work. This was a hard lesson and my kids are still learning it. Perhaps not due to lack of intellect but because they seek to enjoy life, so once they embraced the budget, the living below your means and achieved the three months expenses in the bank, they wanted to celebrate a bit and buy some things which brought them joy. Fortunately for me my kids aren’t into expensive things, but they have their passions. One of my kids loves to travel, so she has seen a lot of the world. Much more then I, and the other likes animals and travel. They spend money on travel, which I would choose to buy dividend paying stocks or real estate investment trusts, but I see the value in their travel, as the world is a great teacher. Plus you don’t really appreciate your home and country until you have lived abroad. This is not to mention the value of living in other cultures. So in this regard they have taught me.

It is better to give then receive.
I am not a saint and I should say upfront this is not as altruistic as it sounds. I taught my kids there is value in compassion and in giving to help others less fortunate then yourself. It is honorable, it is good and in a way it is expected that if you are blessed, that you should share your blessings. But I also pushed them to achieve and be financially secure, so they could afford to be generous. I know it’s hard to be generous when you are poor. Although you can give of your time, your love and your compassion. It’s important to understand that it’s better to be on the giving end and not the receiving end. So work hard, be successful and then be generous.

Tip Generously and treat people with respect
We go through life having many people serve us, from waiters, to bell hops, to tour guides, maids and other customer service workers. I think it’s important to teach your kids to respect these people as human beings and acknowledge the hard and sometimes unpleasant work they perform. Next, I taught them to be generous tippers. Personally, I think the difference between 6-7 dollar tip and ten dollar tip is so negligible that I do ten, and when the calculated tip is 16 or 17, I like to tip $20. Once again I am no saint, I just think if your doing well you should be generous. Plus If I tip someone $20 dollars instead of 16 dollars, that 4 dollars doesn’t make that much difference to me, but the effect of that 20 dollar tip is substantial. I think it helps to balance out their day and I love to see them smile.

Lastly, I taught my kids that the waitress or the guy or gal parking our car is someone’s son or daughter, who could be working themselves through school, a struggling young couple or someone who went back into the workforce because of the death or illness of a loved one. You never know peoples pain or their stories, but you can do a little something to make them smile and leave a little joy on that tip plate.

So now I have told you mine. What are yours?

✍️ written by Shortsegments

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