\u201cCindy won\u2019t ever have a job until she graduates from college. I\u2019ll make sure of that. I want her to have all the fun that she can while in high school and college. She deserves it. And I\u2019m glad that my wife and I can support her with that choice.\u201d<\/p><\/blockquote>\n
“Hmm… is that the best option?\u201d I thought.<\/p>\n
What if Cindy never learns the value of a dollar? What if she becomes spoiled and always turns to Dad to help her out when she runs out of money or overspends on her credit card? What if Cindy doesn\u2019t take college seriously because she has no skin in the game? What if she has a weakened work ethic because she has always gotten things handed to her?<\/p>\n
Related: <\/em><\/strong>How to Start Your Journey to Financial Freedom<\/a><\/em><\/p>\n I completely understand a parent\u2019s desire to make their child\u2019s life easy. We don\u2019t want to see our kids struggle. It\u2019s tough to watch.<\/p>\n But what if the struggles are what makes them tough, smart, and driven?<\/p>\n Below I briefly discuss several ways you can screw up your kid\u2019s future, including (I’m looking at you, Mr. Soccer Dad) by not allowing them to have a job.<\/p>\n If you have a child who is of working age (16 or older in most states), then have them work. It could be as simple as a babysitting gig or mowing the elderly neighbor\u2019s yard for $10. Or it could be a W-2 job at a local restaurant or retail store. Lifeguarding, tutoring, and bussing tables all count, too.<\/p>\n Whatever the job, it will teach responsibility. It will teach the value of a dollar. It will teach the importance of commitment, of being trustworthy, and (in some positions) of customer service skills. They will learn far more than the job skills needed to earn the paycheck. They\u2019ll learn how to deal with a demanding boss or co-worker. They\u2019ll learn how to be on time. They may have to do an interview\u2013something all young people should have to experience before they graduate high school.<\/p>\n They\u2019ll also feel the pride of a job well done. They\u2019ll feel a sense of satisfaction when they see their direct deposit pay in their bank account. They\u2019ll take care of items they buy with their earned income with care and pride.<\/p>\n In short, they\u2019ll be in a much better place than the college grad who\u2019s never worked a day in his or her life.<\/p>\n If a parent doesn\u2019t allow their child to have a credit card before sending them off into the real world, they are setting them up for disaster. This live-and-learn approach can work for some aspects of life\u2014but not a credit card.<\/p>\n Too much is at stake. Don\u2019t let your child become one of the millions of maxed out 20-somethings.<\/p>\n Without proper instruction and training, a young person is likely to rack up credit card debt to eyeball level as soon as the marketing companies target them on their Instagram accounts (or wherever it may be). Now is the time to talk to them about this tool. Give them limits, give them accountability, and give them some freedom.<\/p>\n Let them make those early mistakes while you still see, guide, and mentor them every day.<\/p>\n There is a golden opportunity in most households every month to teach your child about personal finance. Most ignore it.<\/p>\n The monthly ritual of paying the family bills is probably not looked at as prime quality time with the kids, but it is a magnificent learning opportunity. Open your books and show them the income and expenses of the small business known as your family. Have them click the mouse as you do your online bill pay or transfers.<\/p>\n Explain to them why money goes here and not there. Ask them if they notice any issues or problems, and if so, what they think would be smart adjustments. Make them an active partner.<\/p>\n Another opportunity to educate your kids about personal finance is at the nightly dinner table\u2014or while driving in the car, walking the dog, making breakfast on Saturday morning, or browsing the grocery store aisle). In addition to asking your child about their day at school or how their best friend is doing, talk about your index fund performance, your rental property<\/a>, or your employer\u2019s 401(k) match.<\/p>\n Give them hypothetical money situations and ask them to analyze the pros and cons of the options. For example: \u201cPretend you just won $100,000 in the lottery. What would you do with the money?\u201d<\/p>\n Alright, I\u2019ll admit parents should do this sometimes, but there is a danger. Don\u2019t be that parent who spoils their kid just because you can.<\/p>\n What are your motives? Are you doing what\u2019s best for your kid? Are you buying them the newest and coolest shoes because they earned them as a well-deserved gift, or are you buying them so that they can show them off to their friends or because they complained and begged enough? If it\u2019s the latter, reassess your motives.<\/p>\n All parents want their kids to be happy. But we shouldn\u2019t always opt for the short-term benefit of their happiness without looking at the long-term effect. If we teach our kids that they always get what they want, what happens when they don\u2019t?<\/p>\n There are times to spoil your kids. The holidays are an example. But on a day-to-day basis, there needs to be discretion. Kids will persevere. They will thank you later when they are old enough to realize that the world is not always fair.<\/p>\n This one is HUGE! If you wish your child to have a lifelong struggle with money, then train them to spend every dollar they receive or earn. It is the American way, after all.<\/p>\n On the other hand, you could train your child to save 10 percent (at least) of what they receive or earn. Whether the money is a gift or a paycheck, the very first thing they should do is save a portion. Always<\/em>. Remind them of this every time they receive money until they do it automatically.<\/p>\n Help them create a savings account where the saved money sits. Talk them through the options for that money. They can put it in an online savings account and earn around 2 percent (as of late 2019) and keep it safe. They could invest it in a bond (also safe). They could invest in their favorite company\u2019s stock (not so safe, but there are possibly higher returns). They could invest in an index fund (safer than company stock, but maybe not as profitable).<\/p>\n Maybe they could donate some of it? Or they could use it to buy a large purchase for themselves after careful consideration and ample time. The learning opportunity here is so important, as you’re teaching them to save and then to thoughtfully determine where that saved money will go.<\/p>\n Here\u2019s another great American tradition. As a country, we believe our children have to earn a college degree, and it has to be from the best (meaning most expensive) school they happen to get accepted. After all, it feels good to tell our friends that our<\/em> kid will be attending Pepperdine or Cornell or Vanderbilt next fall.<\/p>\n \u201cWe are so proud of Jimmy.\u201d<\/p>\n Yeah, maybe you\u2019re proud of him. But he won\u2019t be proud of you when he\u2019s 35 and still handcuffed to college loan debt and unable to take several potentially lucrative or fulfilling opportunities. All of that because he took that college graduation picture with you that now sits on your mantel, proudly displayed for all visitors to see.<\/p>\n No, instead he will ask you why you never mentioned the option of attending the in-state public university\u2014or better yet, the local community college for two years first.<\/p>\n![\"the-cost-of-kids\"](\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2018\/08\/the-cost-of-kids.jpg\" "\\"\\"")
<\/p>\nHow to Screw Up Your Child’s Financial Future<\/h2>\n
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Don\u2019t let them work part-time<\/h3>\n<\/li>\n<\/ol>\n
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Don\u2019t give them a credit card<\/h3>\n<\/li>\n<\/ol>\n
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Don\u2019t pay your bills with them<\/h3>\n<\/li>\n<\/ol>\n
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Ignore money talk at dinner<\/h3>\n<\/li>\n<\/ol>\n
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Buy them things they don\u2019t need<\/h3>\n<\/li>\n<\/ol>\n
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Don\u2019t encourage them to save money now<\/h3>\n<\/li>\n<\/ol>\n
![\"Close](\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/05\/kids-learn-finance.jpg\" "\\"\\"")
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Send them to a college you\/they can\u2019t afford<\/h3>\n<\/li>\n<\/ol>\n
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