By Michael
During the Depression, as my dad explained it, your uncle or grandfather might reach into his pocket, pull out a few coins and tell you to take one. If there was a quarter and a penny in his outstretched palm, dad said, you took the penny.
If you took the quarter, you might never get that offer again.
That story comprised a half dozen lessons in economics and personal relationships, about short-term gain and long-term interests, about saving and investing and get-rich-quick schemes. It was a lesson he learned at 10, during an economic period we still cite as the standard of suffering.
I thought about that lesson when Jill and I were at the hot dog stand last Sunday, talking with the owner about the economy and the lessons to be passed on to our children. What will we tell them? How will we make them better equipped and more competent than, frankly, many of us have been.
(Not you, of course, and absolutely not Jill and me. I’m talking about other people.)
There’s no question we’re teaching our children all kinds of lessons right now, but are we teaching the right ones? I see how complicated it can be as my daughters discuss their own finances. To say the least, I’ve sent them several mixed messages over the years.
We were fairly comfortable through my job and Jill’s as they were growing up, but I’d still make comments about things we couldn’t afford. My perspective was that we couldn’t afford things when buying them would threaten my retirement planning. For the girls, it sounded like we were losing the house, because there were families in our neighborhood who did lose their homes.
I’d say something was too expensive, which usually meant that it cost much more than when I was their age. Then, we’d end up doing the too-expensive thing. Was that a lesson in drama, or a directive that nothing is really too expensive if you want to do it?
Keeping a rein on spending is a good discipline. A person who spends 50% of take-home pay can look forward to a much more comfortable retirement than one spending 110%. When the children are younger, though, financial concepts are more visceral than intellectual.
Money is more a taboo topic than sex in our society, so we’re not likely to disclose our salaries and reveal our IRA balances to adolescents. Still, we’re providing instruction every time we open up the bills or pull out the credit card.
If we want our children to have comfortable retirement years, do we need to begin their finance education before they’re in kindergarten? Yes, I believe we do.
Michael Rosenbaum is 5 Minutes for Parenting’s first dadblogger. He is a business consultant, playwright and author of Your Name Here: Guide to Life.
Michael blogs on life issues at Your Name Here Guide to Life and manages the Adult Conversation discussion group on Linked-In.