The Simplest First Step to Raising a Millionaire Child
Posted in Best of the Blog, Funny Stuff + Finances, Health + Wealth on August 7, 2012
Imagine, for a moment, that one simple action could almost guarantee that your child grew up debt-free, financially secure and wealthy.
It’s the difference between a poor, naive twentysomething and a rich, confident young adult. And it’ll only take 5 minutes of your time.
The First Step is the Foundation for Everything Else
What if your child…
- Saved a little bit of her allowance each month, because she knew she might need that money later?
- Learned how to invest money and began contributing to an index fund as a teen?
- Borrowed $2,000 less for college each year because he had saved up money to help pay for school?
- Opened up a credit card when she turned 21 and paid it off in full every month?
If your child did all of those things, she could…
- Feel more confident and secure with enough savings in the bank and a growing investment portfolio.
- Save thousands of dollars in debt payments.
- Build an excellent credit history, and buy a car or qualify for a decent mortgage worry-free.
- Take advantage of more options after he graduates from college, regardless of the economy.
Your child could avoid debt, build wealth and live a rich, secure life. It means more opportunities and possibilities.
Wouldn’t that be nice?
The First Step is the Easiest
The first step to raising a millionaire kid is simple:
Talk to your kid about money.
Period. It’s as basic as that. A national survey of parents and kids showed that:
- 85% of kids look to their parents for financial advice.
- Over half of surveyed kids want to know about money from their parents.
- One third of parents avoid talking to their children about money.
Bottom line: Your children want to learn about money. You just have to talk to them.
Every time you talk to your child about money, she’s learning a little more about the real world and how money plays a role. Those conversations build a critical foundation for your child’s financial knowledge. And that means your child has a better chance of growing up into a money-savvy and downright rich adult.
Not sure where to start?
Talk about your financial dreams. Ask your children what they would do with a million dollars. Challenge them to brainstorm 20 different ways to earn $20. Start a conversation at the dinner table about the food sitting in front of you.
It doesn’t have to be complicated or researched. It doesn’t have to be awkward or expose all of your financial weaknesses.
Just be real.
Because no matter how you decide to have this conversation with your child, if you come from a place of love and good intention, it’s hard to go wrong.
Let’s start talking.
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Want more tips on raising getting your child through life wealthy and debt-free? Get your free copy of my eBook, Recession Proof Your Kid: How to Prepare Your Kid for the New Economy (and Why a College Degree Isn’t Enough).
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I think it’s important to just teach them about money and have good money habits that they see early on in life. They learn by example at a young age.
Absolutely. But I’ve also talked to a few parents that feel ashamed that they don’t have the best habits of their own, and they’re not sure where to start teaching their kids. That’s the core of my argument to just start talking about money in daily life. It’s an easy first step, and it’s hard to go wrong.
I love this article! My parents and I never had the money conversation and I love your message!
My parents and I didn’t either – part of my reason for writing this!
I’ve been talking to my kids about money since they were born. We used to have a game where they would guess which coin was which, and I’d let them keep them if they got it right. The kids are older now and starting to learn that if they want something they have to 1) work at their allowance and 2) save up for it!
Good to hear you started early!
Excellent article Stephanie! Parents absolutely do not do enough to educate their children about finances. Heck, many kids are raised only seeing bickering and fighting come from their parents when money is mentioned, which in turn makes them anxious about money and kind of afraid of it.
I’ve been talking to our daughter about money since before she could walk.
She’s already showing more signs of financial responsibility at 9, than I did at 25.
That’s encouraging, Jen!
We are trying really hard to show our daughter the value of a dollar. If she wants something we save her money. I hope we don’t go overboard and give her a complex. It’s hard to find the balance. Our parents never talked to us about money. Mine still don’t. They always said you never talked about how much you make, spend, etc. Not a good strategy.