A friend linked to an article from the Wall Street Journal a few years ago about how to teach your kids about money. Dave titled his entry ‘Smarter Parents Than Mine,’ but I think the more apt title might be Richer Parents Than Mine.
The author lists the cash he’s giving to each of his two kids:
- $25,000 to start a retirement fund.
- $5,000 upon graduation.
- Free under-grad (they’re on their own for grad school)
- $20,000 for a house down payment
- $5,000 for a wedding (or cash if they choose to elope)
That’s about $100,000 each, depending on where you go to college. Wow. Lexi better not be counting on $100,000 from us. And I was proud of myself for starting a $250 mutual fund for her birthday (with some help from her grandparents).
I think the more interesting part would be knowing what sort of know-how the article’s author, Jonathan Clements, has that allowed him to get that much money in the first place. Clearly it’s wisdom like this that builds that sort of fortune.
To that end I’ve been reading the books from Crown Financial Ministries lately, and so far, it’s good stuff. Cheesy, but solid. None of it is directly related to the author of that article, of course, but it’s written in a similar spirit.
Obviously not everyone is going to be able to give their kids that kind of financial security. The retirement account seems like a big stretch to me, but assuming we had kids some day, it would be nice to be able to pay for undergrad college and give them a boost on getting a house. And I agree with him that a house is a better financial decision than an extravagant wedding.
I think the bigger points in the article, and the ones I was referencing with the “Smarter” part of my title, were the points he made about teaching your kids how to use and invest money.
It’d be nice to do a lot of things like that financially for Lexi, but I think we’ll be lucky if our college bills are paid by the time Lexi’s ready for college. ;-)
I’m just amazed at how much money the guy was throwing around for his kids. It just seems that in an article like that you’d go for something more people could relate to. Or at least acknowledge that not everybody has those kind of resources.
I do like the idea of making his kids pay for their own stuff, clothes and everything. Though I can also see it backfiring if you have a grubby boy who’s more interested in video games than even the barest of fashion sense.
If you’ve got the grubby kid who doesn’t care about clothes, that’s where the “needs” vs. “wants” lesson in money managment comes in. First he has to buy the clothes he needs, after that, then he can buy a new video game. But he can decide if the clothes he needs for school, etc. are going to come from The Gap or Goodwill.
Oh, I agree, Abby. I’m just saying it backfires if you can’t handle that. Parents usually expect a certain level of hygiene/clothing, and if your grubby teen decides his needs are below that line, you either have to deal with it or pony up some more cash.
It sounds like he gives his son a smaller allowance since he doesn’t trust his son to adequately take care of clothing needs. But it’s still giving an allowance and saying “this is all the money you get to screw around with.” That seems like a good way to teach delayed gratification. Jaime and I know a few adults that still struggle with that one, so it’s definitely something we’d want to instill in our hypothetical child.
(disclaimer: We are not, have never been, nor are currently trying in any way, shape or form to be, pregnant.)
As you mentioned, he’s shelling out a lot of money for his kids when you look at things like graduation, college, weddings, retirement – all the big stuff that really does require a lot of money. While the amounts are excessive to a lot of people (us included), I would suspect that the Wall Street Journal readership skews towards a wealthier demographic.