Thursday, December 20, 2007

Jonathan Clements On Making One's Kids Financially Savvy

Jonathan Clements is one of my favorite reporters in The Wall Street Journal. He generally writes easy to understand personal finance articles that are consistent with my own values and beliefs. Recently, he wrote 12 Ways to Make Your Kids Financially Savvy on December 17, 2007. Overall, I agree with his concepts, and identified a few new ideas to use with our daughter. The only point of major disagreement for me was in #5 on the use of variable annuities. I'm still not comfortable with the idea of variable annuities, since it is a possibility a financial company may go out of business in the future, due to some unforeseen issue.

Here are six of the ways that I will give high priority for our daughter's financial education.
  • #1 learning the concept of deferred gratification. This trait is often considered important for life success. I like the idea of giving children the choice between a dollar or a soda when eating at a restaurant.

  • #2 making purchase decisions with their own money. I think it's a great idea that money comes from earning or saving, not credit cards. Better yet, I like teaching the discipline of saving for something one wants.

  • #4 learning that wealthy appearances does not equal being wealthy. It's one of the reasons I Don't Judge People By Their Car.

  • #8 learning how to use credit cards. Specifically, charge only what one can afford with cash and pay off the balance each month. This will create a good credit score for her future.

  • #10 getting a higher education. To me, a college education is a must for most people to be financially successful. We will target to cover 100% of college 15 years from now, with the understanding she should be self sufficient after graduating.

  • #12 learning the basics of investing. I learned because my father taught me about investing in stocks and real estate. I hope pass my interest in investing to our children.

  • For more on Crossing Generations, check back every Thursday for a new segment.

    Photo Credit:, Gracey Stinson

    This is not financial advice. Please consult a professional advisor.

    Copyright © 2007 Achievement Catalyst, LLC

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