Teach What You've Been Taught
The Starting Point
A healthy financial situation is a lot more than racking up a bunch of cash. You may have been working for decades, having earned over a million dollars by now, but don’t have much to show for it. After twenty or thirty years, maybe you still don’t own your home outright. Maybe you don’t have $1000 in the bank- much less, enough to cover 3-6 months of expenses if an emergency came up.
On the other hand, you could be a naturally good saver or may have become a good saver. But if you save money with no plan, it’s a recipe for disaster. There are at least two things you need to do.
First, Implement a Plan
Implement a financial plan. Included in that plan is a strategy for a diversified portfolio. You need some cash readily accessible, long term investing, assets that can be easily liquidated when needed, tax mitigation, inflation proofing, wills, trusts, insurance, etc.
To do it right, you’re not going to be able to cheap out. You’re going to have to spend money to get the help you need with some of these things. You can offset some of the expenses by getting educated yourself. There are hundreds of books, podcasts, classes, coaching, and consulting services available to you. If you are the type of person who loves to learn that’s great, but you still won’t be able to become an expert in every area. Practice on things that have minimal risk and hire experts for things that involve greater risk. Once you’ve got your plan in place and implementing it, it’s time to move to the next step.
Next, Pass It Down
Talk to your loved ones about money; don’t just pass down it down. Start age-appropriate conversations. Teach youth how to budget, how to minimally tithe/give and save before spending. Teach them how to plan for big expenses like special activities, cars, and college. Talk to adults about the 10-10-30-50 (10% tithes, 10% savings, 30% incidentals, 50% bills), or some variation of spending that’s appropriate for their situation. Use real life events as teaching moments.
If something were to happen, today, would your heirs know how to handle a lump sum death benefit or would they lose it in just a matter of months or a
year, because of mismanaging? If you are counting on schools to teach them, there’s a good chance that’s not going to happen. Most public schools and college curricular don’t’ teach how money works. They weren’t teaching it when we were in school and they aren’t teaching it, today. If you simply hope your loved ones will figure it out before it’s too late, that’s not a strategy; it’s not wise and it’s not fair.
Your children, grandchildren, nieces, nephews, siblings, and cousins have to be taught, just like you did. They aren’t going to learn it overnight, but neither did you. It will take time, repeated conversations, and seeing you apply those principles time and again. Some will grasp on sooner than others and others may never grasp on.
I heard it said, “More is caught than taught.” It means, people often learn more by what they see being done than what they are told. I think it’s true to a great extent. But I also think caught and taught work hand in hand.
Sometimes, telling someone how to do something could actually work. More often, I find people do what they see being done; and less what they hear being said. So, watching you budget month after month, year after year, could be a great teacher. Even greater would be to also talk about it, model it, encourage questions, help them implement it, watch them do it, and ask them questions.
If you feel ill equipped to teach them, seek someone else to do it. Put them in a class or a program. Maybe attend together so you can grow together. The main thing is to take an active role in equipping them for success.
No Guarantees? …or is There?
It’s still no guarantee that they’ll get it right or that they will be disciplined enough to continue the things you taught them, but they will have a better chance than if you had said and done nothing. There are tools (like trusts), that you can set in place to mitigate loss.
You/they could make very wise decisions and still meet with economic crisis. That’s when knowing in Whom you believe will make a difference.
Ultimately, you must trust God, though, and interweave that into your teachings (Proverbs 3:5,6).
There is an inheritance that cannot be taken away; riches that cannot be devoured. You never want to mislead anyone into thinking everything will always go well, though you do want to affirm that when you do better, things go better. Regardless as to how it looks on the surface, teach them to trust God; we reap what we sow. That’s God’s guarantee; that we can bank on.
