Why We Teach Kids About Money: Part Two

Kelty-and-TateJust a few weeks ago, the new and revised copy of Investing in Your 401k Kid was released in paperback.  Yippee!  If you’d like a copy, you can snag one here.

One of the additions we made when releasing the print version was to add a Preface.  We’ve commonly explained our reason for coming up with our kids’ budgeting plan as a way to teach kids about money, but there was another reason why we’re doing this we have never really discussed until now.

After talking to other people about the book, I realized that this reason is as important as any other and would likely make sense to an entirely different group of people, so I am sharing it with you here today. 

In 2002, exactly one year to the day after planes crashed into the World Trade Center towers, Bret and I found ourselves at the Moscow embassy filling out paperwork to adopt our three year old daughter.  As we signed the paperwork, the kind women on the other side of the desk said to us, “This is a very sad day for your country, but I hope that it will now be a very happy day in your hearts.” 

From the time we head decided to adopt our daughter, we knew we would probably have an uphill battle.  Our process went smoothly, but we were constantly reminded of the pitfalls of Russian adoptions as news reports of severely disturbed children seemed to bombard us at every turn.  We were lucky.  God was watching over our family and chose the perfect little girl for us to raise and love.  The details of how we know that to be true could make an entire book itself, but our daughter was healthy, happy and well adjusted.   We knew as early as kindergarten, however, when her near-to-retirement teacher told us she’s never experienced learning difficulties like our daughter had, that it would be up to us to make sure she was well equipped to face the world.

For several years we plodded along.  We hired tutors, enrolled her in after school enrichment programs and generally focused on her abc’s and 123’s.  We figured that as long as she knew how to read, write and do math, all would be well in her world.

But then came 2007 and 2008.  By late 2008, the world was in financial crisis.  Bret had just lost his job as CFO of a startup, and people all around us were losing their homes to foreclosure.  As we watched the news each night, it became very apparent to us that we were part of a generation of people who didn’t understand the first thing about basic money management.  We looked at our children and realized that if we wanted things to be different for them, it was up to us to make it so.  This was most important when it came to our daughter.  If ever we wanted her to be able to live on her own, to manage her own life, it was imperative that she learn how to manage money.  So we shifted our thinking from math, reading and writing, to basic life skills and we started with money management.   As a teenager today, she still may not be able to do long division, but she can balance a checkbook, she understands interest and basic investing and knows that she never wants to be without a cushion in her savings account again (details of that story are in the book).

Our process for teaching the kids how to manage money certainly raised a lot of eyebrows.  Family members thought we were nuts, and the kids’ friends thought we were rock stars.  In the end, through lots of trial and error, we found a process that worked.  We have teenagers who today know more about managing money than many adults.  When others have seen how this works, they ask about it.  The same friends and family members who once thought we were crazy are now asking us for details on how we got here. 

We realized through all of this that there are a lot of kids in the world who could benefit from the same lessons ours are learning, but their parents just don’t know where to start.  So we wrote it all down, in a step-by-step process for others to follow. 

It is our belief that all kids, teenagers, even adults, must learn these basic money principles or we will be ruined as a nation.

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