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What I Wish I Had Taught My Daughter About Money

By Joanna Crain

My oldest daughter had many milestones this year. She got her drivers license, got her first car, got her first job and turned 18 just this week. Besides being a festive day full of the usual celebrations, we went to get her first bank account. Out of all the huge life-changing events she went through this year, I think the bank account had to be the one that gave me the most pause. I was tormented by the thought that she may be destined for the same financial crisis I put myself through when starting out. Of course, back then I had no clue about how to handle my money or to be a good steward of it. I was guilty of countless transgressions against my financial health. By the time I was 25, I was a complete financial disaster, with no apparent means by which to dig myself out.

My daughter wouldn’t remember those days as she was very young, but as a single mom of two young children in financial ruin, I know it directly affected the lifestyle in which she was raised. Because of my ineptness and indebtedness, I found everything from feeding them to putting gas in the car a miraculous feat. Eventually things got better and I was able to learn how to put money in its place and do the right thing with it. So I have to feel good that I have set some proper examples of money management skills for my daughter to learn from.

But there are still things I wish I would have shared with her about money before now. Things I know if she takes to heart and starts applying them immediately will set her up for a lifetime of financial wellness. For me, this one falls right in there with emotional and physical wellness as being areas I have always been committed to nurturing in my children. These are the things she may already know, but areas of financial wellness I want to make sure she understands:

  • It’s not about whether you have a lot of money or a little, it is about living within your financial means.
  • Treat your money as you want it to treat you—be good to it and take care of it and it will reciprocate. Treat it badly and it will do the same.
  • Never buy something you don’t have the means of paying for right now. This applies to various areas from lump-sum purchases to purchases for which you need to finance heavily.
  • No matter how much you make, put away a percentage of it for an emergency.
  • Always be aware of where you money is going.
  • Always meet your financial obligations no matter how tough it might be.
  • Forget those trendy shoes, put it in savings!
  • When you have a spending urge, take a look at your savings account balance instead. That is a huge rush in and of itself.
  • Develop a budget and financial plan no matter what your income.
  • Treat yourself within reason every once in awhile. Depriving yourself is not healthy.
  • Give even when it hurts. It might hurt a little, but it will also feel great. Don’t go beyond your means though.

These are just a few of the areas I have outlined to go over with my daughter this weekend. She is a sweet, open-minded and smart young lady so I am confident she will absorb my advice and be appreciative of this heap of hard-earned advice.

What do you share with your teens about money? What are some areas you are concerned with? I would love to hear from you.

(photo credit: lanchongzi)

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Comments

  • http://ownthedollar.com Hank

    Wow! Why did you wait so long for her to get her first bank account? I can remember having a passbook savings account before I could even see over the teller’s counter in the bank. My parents banked a credit union that had a children’s savings account program with a furry little squirrel mascot and everything. The mascot made appearances at events trying to get kids to learn to start saving at an early age (and drum up business for the bank as well of course). 18 years-old is too late. Parents should start earlier!

    • Joanna Crain

      Hank,

      You are absolutely right, kids should have a savings account or at least saving bonds starting at a very young age. I should clarify, my daughter just got her first “checking” account. She just started working and is now ready to take on the responsibility of managing more money than just that of an allowance, birthday and babysitting money.

      Thanks for your input.

      Regards,
      Joanna Crain

  • Lissa

    I think those are great points to share with your daughter. When I went to college my parents never really talked to me formally about handling your money but they are so quick to say not to spend too much. Well, what is “too much?” I’m sure they meant don’t spend it if you can’t afford it outright. Still, I don’t consider that a lesson in finance.

    My son’s only 2 (almost 3) but I am already planning to educate him about money when he’s old enough to understand. I honestly think that’s really important in today’s society. There are too many temptations about money.

    • Joanna Crain

      Hi Lissa,

      Thanks for sharing. It is true, we parents need to step it up when it comes to educating our children about finances. You’re right, money is a big source of temptation–it is one of the most powerful aspects of our lives. It can make or break us, depending on how we treat it.

      Best,
      Joanna

  • http://www.startwelllivewell.com Meghan

    As a recent teenager I don’t remember so much my parents sitting down and talking with me but I do remember seeing them sit down and budget together. They’d also read financial books or attend a class or conference every now and then on financial planning and budgeting. They were (and still are!) always willing to talk with me about finances and answer questions I have. Just seeing them set that example definitely inspired me and set me on the right course.

    One thing I think is really important for teens to know (especially when opening up a checking account) is that they have the power to do whatever they’d like with their money (regardless of their income.) They don’t HAVE to spend every penny of it like their friends do. They can be different. =)

    • Joanna Crain

      Hi Meghan,

      Great advice for teens! Your are also so right about teaching by example, it really is effective.

      Best,
      Joanna

  • Christine

    Dear Joanna, Just read your excellent article,I couldn’t agree with you more!As a single mother on a tight budget I was forced,in effect, to make the most of my finances and it was a great education. I wouldn’t buy anything unless I absolutely needed it,put extra money toward my mortgage every month no matter what and had it paid off in 18 years, 12 years early, and saved about 100k in interest. I taught my son when he was very young about p.f., gave him an allowance each week,$5 to start,had him put $1 aside for savings. Whenever he wanted me to buy him something(that he didn’t need) I’d say “would you rather me put it in your account?” He usually agreed. Money is a very concrete concept. He’s now 21 with a great savings put away and has a good work ethic. Also gives to the needy.

    • Joanna Crain

      Hi Christine,

      Thanks so much for sharing. Sounds like you were spot on with showing and teaching your son about finances. What a wonderful gift you gave him! Hopefully more parents will start realizing the importance of financial education early on.

      Best,
      Joanna

  • Steve in New Jersey

    I read these articles because my longtime girlfriend felt I need help. To an extent I know she is correct. I can relate to every challenge mentioned. I am in the midst of ever yone of them. My daughter is 18. She and I have a bit of a twist to our situation. I know to some who read this my explanation will sound like an excuse. The bottom line is that I am struggling. I have been divorced from my daughters mother for 11 years. It was an ugly divorce. I have a 21 year old son from the marriage as well. My son fell apart as a result of the divorce. He refused to see me for years. He was disrespectful and hurtful towards me every chance he had. His mother encouraged his behavior towards me. At a minimum she never supported a reconciliation with my son. It would have been very easy for my daughter to follow the same path her mother and brother took. She lived with them 4 days a week. Thank goodness she did not. I was already a heartbroken father. She always stood by me through it all. Our family situation continued to spiral to traumatic and life changing levels. My son was hospitalized on a couple of occasions for acting out in unhealthy ways. He went to a charter school for emotionally disturbed kids. I recently found out he became and still is a heroin addict. My daughter had to see, experience, and live through every crisis. I bought her a car last year for her 17th birthday. It was used but, it was the make, model, and color she wanted. She recently graduated from High School. Her therapist has said I need to set some monetary boundaries. I am fortunate that money has not been an issue for me. I find it so difficult to say no to her. I feel so guilty. She has been dealt such a painful hand in life. I have set a bad precedent. She is spoiled by me. I want to parent her to a responsible financial life style. How do I start now?

  • http://twitter.com/SkintintheCity Skint in the City

    I couldn’t agree more Joanna. My two daughters are still quite young, but with the eldest I’ve introduced pocket money and the concept of saving for things you want, as opposed to spending it weekly on sweets. Hopefully this will stand her in good stead for the future. I think it’s so important to instill girls with the confidence to resist peer pressure when it comes to spending cash. The pressure will always be to have the latest shoes and clothes – fine if that’s really what they want for themselves, but I’ll try to get them thinking about whether they’re spending THEIR cash to fit SOMEONE ELSE’s ideas of how things should be. Financial independence comes from being self-directed in terms of your own spending decisions I think.

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