As a father of five teenagers, it feels like all I do every day is teach my kids lessons. These lessons span a wide range of topics – from “how to treat others,” to “being a team player,” to “exude confidence not cockiness.” It has taken me years to determine the most important lessons pertaining to personal money management, which is one of the most important skills they need to learn.
With all the issues facing teenagers today, why do I say this? Three reasons:
1. Schools teach them absolutely nothing about personal money management.
2. The example set by our society is to spend more than they make (in other words, debt is good).
3. It is one of the most important skills they need to take into adulthood.
Here are what I consider every dad’s three “must teach” principles:
• Always live below your means. If you want to manage your money successfully, this is one of the most important principles to follow. And, this is where most Americans have gone, and will continue to go, wrong. People want to have everything … now. They just can’t wait until they can afford it. But you must wait until you can afford something before you buy it. If you make a habit of purchasing things you can’t afford, you will quickly begin a downward spiral that will continue until you go bankrupt. Plus, you’ll enjoy your purchase all the more.