As I reflect on my path in finance, what stands out to me most is how much I have learned from the women in my life.
From my strong mother to my supportive wife to my four wonderful daughters, they’ve each brought lessons and insights that have shaped my approach to finance and financial education.
My Mom was a strong, positive force in my life from a young age. As a banker, she taught my sister and me lessons about managing money early in life. She spent a lot of time talking to us about not being wasteful and being smart with money. She also taught us about the dangers of debt, the benefits of conscious spending and how we could make our money work for us. It was a true gift to learn those lessons so early in life.
She was also very conscious of instilling positive values in us. She talked to my sister and me often about how we are all created equally, regardless of race, religion, and gender, and I feel so blessed that I can pass on these positive teachings to her grandchildren today.
When she became a single mother, I saw her working tirelessly to provide financial stability for our family and started to notice that certain responsibilities fell on women more often than men. As I looked more into it as I got older, statistically, women tend to work fewer years than men as they are more likely to take on the heroic roles of child rearing and caring for aging parents. The wage gap between women and men was shocking to me and still is. Noticing this from a young age had a big impact on me.
What also shocked me early on in finance was an archaic and grossly incorrect notion that “women can’t handle money as well as men can.” Statistically speaking, women tend to make better money decisions than men. Overall, they are more conservative with money and more likely to think about the big picture versus short-term gains. One other big factor is that when women do talk about money in their peer groups, they tend to be far more supportive.
Women who experience a financial upswing are more likely to tell their friends about it in such a way that encourages the women in their life to try the same approach. They are also more likely to comfort and console their friends in tough economic times and lend as much information as they can to help friends get through the difficulties.
Men, on the other hand, are more likely to be competitive. They are less likely to share when they are in financial difficulty and less likely to share their road to success outside of their family group. What I learned when discovering this is that in so many facets of life, we have much to learn from the women around us.
Now that I have four daughters, it is a high priority to ensure that my daughters receive excellent education to build confidence in their finances. It still surprises me how financial education is largely missing from school curriculum when it is such an important skill that all people need to navigate throughout their lives. That’s why I’ve made a point to talk about money with my kids from a young age - thanks to my mother having instilled that lesson in me.
If you want to talk to your kids about money, here are some of the takeaways I’ve shared with mine:
Respect for earning
Something my Mom always told me was that the only place that success comes before work is in the dictionary.
Even if you have the capacity to buy your kids what they want and need, I highly suggest teaching them the value of a dollar early in life by allowing them to save up for bigger purchases. Learning this at a young age paid off in strides in the years to come.
Over time I’ve learned that for personal finance, budgeting is nearly impossible. You just never know what is going to happen in life and big bills can drop in without warning. On the flip side, tracking the very small purchases can eat up your time and have little impact on your overall financial health. If you go to a coffee shop and get a cookie along with your usual coffee, you’re now in your log book or app adding that $2.30 and in the end, it's more of a hassle than a win. We all waste money, and that’s never going to change, so the focus for us is on conscious spending.
I encourage my family to think about what they buy often and does it really make a difference in their life? What are the things you buy that bring you the most pleasure? What can you do without? It’s ok to be frivolous from time to time, but that may mean that you’ll be strapped later on. Can you save a bit at a time for your emergency account and spend slightly less on your frivolous purchases?
Healthy and regular financial discussions at home
My wife and I have a meeting every month where we talk about what we spent. If things are going great, awesome. If things got out of hand on the spending side of things, we chat about how we can change things up the next month. We have a huge family, so for us, eating out can really add up. We scale back a bit the following month and have those transparent conversations so we’re all on the same page. We talk openly about money in a positive way so there aren’t any stressful or buried secrets and so our kids can learn from us along the way.
Learn to invest from a young age
We talk about how you can make your money do the work, so you don’t have to work as long later in life. My Mom outlined my first financial project for me when I was a teenager. She asked me to do research on a stock I may want to buy and with my mom’s help, I bought my first stock at age 14. It was so interesting to watch that stock bounce around over the years. I learned a lot just from that one purchase.
With my daughters, now 12, 16, 22 and 23, we buy them one or two stocks every year at Christmas. They did their research and when they felt stuck early on, I told them to buy what they know. I remember one of my daughters being very into princesses at the time, so she opted for a Disney stock for her first one. Another daughter loved spending time on the family farm and so we looked at options in agriculture. It can be helpful for every investor to buy what they know. Buying a gift of one or two shares of a stock, it's not just the gift of the share, but it's the gift of learning and knowledge.
Don’t do debt
As much as possible, we encourage them to avoid debt. A mortgage or car payments are one thing, but getting into credit card or line of credit debt over frivolous spending is an immediate turn down the wrong path. A good illustration of this is to show them an example of someone in debt who makes $100 payment in interest every month. We then compare that to someone putting that same $100 into savings or an investment and look at how that can build over time. It’s a big incentive to get kids conscious spending, saving from a young age and ultimately have strong financial independence throughout their lives.
An investment that looks too good to be true is probably too good to be true
Some of the finance talk with our kids has been more about education in this industry as unfortunately amongst the ethical and positive stories, there is a long, sordid past of scammers and bad deals. We encourage them to think critically about their decisions and to be aware of risks and deals that look too good to be true.
Work with an expert
A good example we share here is talking about how I don’t watch a YouTube video on how to change my oil when I could take it to a mechanic. The amount of money I spend on a mechanic is well worth it as they have spent their lives honing expertise in this field so I don’t have to. The same goes for money managers. Finding someone you trust who has spent their lives in this field is going to get you bigger wins than trying to navigate the market solo. There are always recommendations from friends or family or you can find a match that is vetted and tailored to your needs through a site like Vexxit. Working with an expert is an invaluable asset to your financial health in the long run.
Money is a way to open doors, not an end in itself
We talk a lot about the fact that money isn’t king or queen; experience is. It's not about the money itself but what we can do with the money. Sitting on a big pile of money isn’t going to make for a fulfilling life. We want to be secure, but we also want to enjoy the experience that having money can afford. From traveling to spending time together as a family to helping our community, money is a way to open doors and not an end in itself.
Join a free webinar with Todd Schmekel on January 28 at 1pm CT as he sheds light on the simple changes you can make to reach your financial goals.