By Clint Greenleaf
A YPO member since 2009
Founder and chairman of Greenleaf Book Group
There’s no question that I’m a fortunate guy. I convinced a beautiful, smart and caring woman to marry me. My kids are healthy, adorable and often well-behaved. My businesses have been successful and afforded me a fantastic lifestyle. But all of this leads me to a constantly nagging fear — that the trappings of this great life will yield unbalanced, bratty children who will grow up to become financially irresponsible.
As luck would have it, just about every YPO parent I’ve met expresses similar concerns. So what are parents who want productive, fulfilled children to do? It’s not that kids need to seek or avoid wealth, but they do need to understand it to become functional members of society.
The first step is to recognize that it’s the parents’ responsibility to teach them well — to help youth see that money is a tool. It’s neither good nor bad, but can be used for either end. The burden of financial education, for better or worse, is on the shoulders of parents.
I consult with families on this issue and the good news is that there are five primary steps you can take now to help teach financial basics to your kids. You don’t need to teach them to be bankers or entrepreneurs by age 10, but the building blocks are a good start. Here are the most important first steps:
- Talk about money. It’s a part of everyone’s life and ignoring it because it is considered by some as “the root of all evil” is like ignoring oxygen because it feeds fire. Money is neither good nor evil, it is simply a tool. Just discuss it in honest terms. Discuss when it’s used for good and when it’s used for evil; your children need to consider it from all sides.
- Teach them the elements. Let your kids know what you’re doing when you make change, deposit or write a check, and when you leave a tip. Talk about credit cards to dispel the thought that a piece of plastic is a magical source of money. Make it clear that a bill comes each month after you buy items and it must be paid. Explain how money works and allow them to see it in practice.
- Make children work. “But,” you say, “I love them and don’t want them to waste their youth.” Wrong. Show your kids how much you love them by letting them learn a work ethic. Make sure the job is hard and has real consequences, like not getting paid if they don’t work. Ideally, find a manual labor task so they can experience how demanding some jobs are, and why they need to appreciate the fruits of their labors.
- Encourage them to save and give. Spending comes easily for kids; it’s the saving and giving that are harder to learn. Help them understand why they should save and why they should give. There is nothing like using your own finances and actions to teach them by example. I wrote my children’s book, Give, Save, Spend with the Three Little Pigs, to educate my children about the basics of handling money responsibly and virtuously. As an entrepreneur, I wanted them to see that starting a business is noble, that working ethically is good and that with wealth comes responsibility.
- Introduce them to entrepreneurs. Kids are inundated with all sorts of images and descriptions of professions they might want to pursue when they grow up, but rarely is entrepreneurship one of the options. I am not suggesting you force it on them, but consider it an option at least. Introduce them to your friends who are entrepreneurs and let them explain what they do. If you haven’t seen it, check out my friend Cameron Herold’s TEDx talk on raising your children to be entrepreneurs.
It is our responsibility as parents to teach our kids about money. If we want to raise productive, responsible members of society, we had better start sooner rather than later.
Clint Greenleaf is founder and chairman of Greenleaf Book Group. His children’s book, Give, Save, Spend with the Three Little Pigs, was published in March 2014. Learn more about financial literacy for children.