The topic of kids and money has always been important to me, but these days it’s occupying the top spot in my mind. I am convinced that one of the greatest gifts parents can give their children is confidence―financial confidence.
Kids who know how to make good financial decisions from a young age will have the confidence they need to make the right choices in the real world when they come to life’s critical decision points. The opposite of confidence is timidity, which by definition is lacking in boldness or determination; lacking in courage or self-confidence.
One of the best ways I know to help a child overcome shyness and timidity is by teaching them about money. And the best way to do that is to allow them from a very young age to make their own financial decisions–and then require that they enjoy the results and or suffer the consequences.
I didn’t come to these conclusions overnight. It was the process of raising our two sons during those years that I was recovering from having made the worst possible financial choices at my own critical decision points. As I learned how to manage money, they learned right along with me.
Our method was unconventional then, and I’m pretty sure most would think it’s just as unconventional now. But guess what? It worked. Our two sons bought their own cars at age 16 with their own cash; both bought homes in Orange County Calif., before age 27. Neither came out of school with a nickel in student debt. They’re not wealthy, and neither are their parents. The secret is a lack of debt. These days, that requires a great deal of financial confidence.