the money lessons i hope my sons learn from watching me

no matter what i say, my kids only watch what i do.

when i say "no desserts before bed!", as soon as i am in the pantry sneaking a piece of ghiradelli sea salt caramel, there they both are, hands out, ready for their piece. it's like they have supersonic hearing...

it's why, when it comes to money, there are a few habits i try and model. there is plenty of advice out there about which high yield savings account to use, or which version of the debt snowball is best, or how to retire by 30 working part-time at Chipotle, but these are the principles i try and model to my kids that i have found create healthy money habits. because if I want them to do better than I have, they need habits, not lectures.

give generously.

generosity is the foundation of healthy money habits. and there are many forms of being generous. this isn't just giving to charity or tithing. it's paying for dinner when you go out with another family. or bringing someone a batch of cookies if you know they're going through a tough time. it's not worrying about calculating to the penny how much your friends need to venmo you for doordash. it's about which instinct shows up first when money is involved, and making sure it's the one you want your kids to copy. ask yourself, when money is involved, who gets the first vote: generosity or making sure you don't lose out?

wait before buying.

my threshold is $100 - any purchase over $100 (single item or amazon cart), i wait at least 24 hours before clicking order. i recently started putting items into my amazon wish list or clicking "save for later" from the cart to see if i actually remember i wanted that item. often, i forget.

no matter what your threshold is, you need one. the one for my sons is $20 - if they want a new video game or card set or toy that costs more than $20 (especially with their own money), i make them wait three days before they buy. and it has been my experience, that for things they really want, they have never once forgotten to remind me when the three days are up. and about half the time, they move on - probably just like you. model it, live it, enforce it with your kids.

investing consistently.

you have to start comfort with investing young - if you struggle with understanding investing as an adult, then you understand.

for our family, it all started with a greenlight account and 25% of their birthday money. my youngest used to absolutely hate taking $5 of his $20 in birthday money to put into his greenlight investing account - i'm talking tantrums gallore! but now with almost $1,000 in investments, he loves watching that balance grow while he does absolutely nothing. teaching my kids to buy low cost index funds like VOO turned into education on dividend stocks ('wait! they pay me for owning THEIR company?' - oldest) turned into explaining how option trading works. and now, i think they know more about equity investing then a lot of my friends and co-workers, all before they are teenagers. don't feel overwhelmed or behind, just start the conversation.

if you haven't started investing yourself, then take some of your own money and mirror their trades. greenlight has some great education videos for investors of any age.

and remember that your kids are young, they'll have lots of time to recover from an investing mistake - if they want to buy mcdonalds stock cause they have a new pokemon or squishmallow happy meal toy, let them take a small amount and do it. and then talk about why the stock did or did not go up (see: idiosyncratic risk). speaking of talking about money...

talk openly about money.

i grew up in the same house most of us did - my parents NEVER talked about money. i had no idea if they were in debt, what our rent was, how much they made. we didn't talk about investing or assets or ownership. i got a sense that money was tight, which made it even worse not talking about it. it taught me to not talk about hard or embarrassing things; and not just money, but most topics.

so i tell my kids how much i make and how much of that i save. from my corporate jobs, i taught them what an RSU is, and why earning equity is a great way to build financial freedom. we talk about taxes and how great they are.

we talk about debt - good debt (rental property mortgage) and bad debt (that loan i took out to afford the subwoofer and speakers for my (sweet) 1993 acura integra when i was in college with no job and no savings. man, did the chicks dig me....). i talk about credit card debt, credit score, the assets we own (or want to own), how i invest, and what the heck a 403(b) is. AND, believe it or not, i also try to...

admit mistakes.

this one is the toughest for many people. honestly, it's the toughest for me. maybe you want your kid to see you as batman, or maybe admitting you made a job or money or life mistake makes you feels uneasy, especially being vunerable with your children. but share age appropriate money mistakes and the lessons you learned from them; it will teach your kids that money isn't scary or all, it's just another thing to be talked about.

the biggest money mistake i made was buying a condo on "stated income" when i was 23. can you beleive they used to let you do this? back in 2005, you could go to a bank, and they would give you a loan not based on your W2 or your tax return, but on what income you said you made. you just wrote a made up number on a piece of paper, signed it, and viola - mortgage! there are at least a half dozen things wrong with that, and it's one of the larger drivers of the 2008 housing crisis (a story for another time). but i would never tell someone else to mirror the choices i made in buying that condo.

that's it.

five simple things. that's what i think about for my kids, and i try to cap the pressure on myself there. money can feel overwhelming. complicated. like there's always one more book to read or strategy to master. so I keep coming back to these five principles.

they can worry about roth conversions, tax-loss harvesting, and eventually meet FICA - the govenment's way of saying, "hahahahhahahaha.....sucker."

energy for this post powered by: celsius grape rush - the closest thing to diet grape soda i have ever found.