Laura's latest Forbes column

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Mel Lindauer
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Laura's latest Forbes column

Post by Mel Lindauer » Fri Sep 10, 2010 2:41 pm

Hello Everyone:

Laura's penned another excellent educational piece for our bi-weekly "The Bogleheads' View" Forbes column. This week's column is titled: "Six Ways To Teach Your Children About Money".

You can read it here: http://www.forbes.com/2010/09/10/teachi ... -dogu.html
Best Regards - Mel | | Semper Fi

kenbrumy
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Post by kenbrumy » Fri Sep 10, 2010 2:59 pm

Taking "taxes" out of the kids' allowance is cold, cold, cold.

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Post by Mel Lindauer » Fri Sep 10, 2010 3:24 pm

kenbrumy wrote:Taking "taxes" out of the kids' allowance is cold, cold, cold.
I disagree. When you're teaching kids about money, they need to understnad how it works in the real world of paydays.
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Post by Grt2bOutdoors » Fri Sep 10, 2010 3:56 pm

Mel Lindauer wrote:
kenbrumy wrote:Taking "taxes" out of the kids' allowance is cold, cold, cold.
I disagree. When you're teaching kids about money, they need to understnad how it works in the real world of paydays.
Since we're talking about teaching them lessons of real paydays then one would assume that if a parent has multiple children then one would receive a lesser amount than the other child. Just to show the example of "real world paydays" that we are not all equal. :wink:

Or - don't make the payroll, why? because businesses do go out of business and do fail to make the payments owed to creditors. Now that's really cold!

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Post by norookie » Fri Sep 10, 2010 5:39 pm

kenbrumy wrote:Taking "taxes" out of the kids' allowance is cold, cold, cold.
:wink: I disagree also. The more you make the more they take for the common good :roll: , unless you've a seasoned tax atty. in tow :wink: Might be nice to take it out and put it in a teaching investing AA.
" Wealth usually leads to excess " Cicero 55 b.c

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Post by Mel Lindauer » Sat Sep 11, 2010 12:28 pm

I just saw on the front page of Forbes.com that Laura's latest column was the third most e-mailed column in the past couple of days. That's good news, since it means many more parents will get to read Laura's column.

Good job, Laura!
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Post by chaz » Sat Sep 11, 2010 1:19 pm

Financial education for children is important - glad to see Laura address the issue.
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Post by tdhg566 » Sat Sep 11, 2010 7:23 pm

kenbrumy wrote:Taking "taxes" out of the kids' allowance is cold, cold, cold.
You're kidding, right? Giving you the benefit of the doubt here.

One day these kids will thank God for having such caring and concerned parents. And no, I'm not making this up.
As an Enrolled Agent I advise clients about taxes and investments. My work is retiree friendly, geographically portable, mentally stimulating, personally profitable and emotionally rewarding.

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Post by DLS724 » Sun Sep 12, 2010 4:05 am

My children are taught to give 10% to charity, from the very first penny they earn, find and receive as gifts.

Death and taxes can't be escaped. But a giving heart is something that needs to be nutured and developed from a young age.

DLS

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Post by Cernel » Sun Sep 12, 2010 5:22 am

A great article and I am glad to see more and more adults interested in educating their children on money matters. Maybe this is one of the positives that has resulted form the "Great Recession."

As I read Laura's article I was reminded of the financial education that my parents passed onto me and what I tried with my children. What my parents did with us covered a number of Laura's points, but not all of them. Here was their game plan:
For every $5 I earned, I had to give them $1 for rent, food, etc., $3 went for savings, and I had $1 to spend as I saw fit. It turns out that the $3 for savings was their way of teaching me the value of saving for the long term since any of the "wants" I desired, I had to save and use from the $1 that I got to spend. My parents did not give us an allowance and we were expected to do chores around the house. We also were taught to save for what we wanted and were not allowed to buy anything on credit. There were other aspects to their "madness" but these are the relevant points.

When my kids started earning money I tried to employ some of the same teachings. I did change things up a little, like change the basis from $5 to $10, so I ended up charging them $1 out of $10 for rent, and had them save $4 out of $10 leaving them with $5 for their spending. Again, we taught saving their money for what they wanted, thus not buying anything on credit, etc.

So what was the result of all of this? I learned and lived by some fundamental financial principles like: pay yourself 1st, save for the long term, buy only what you can afford (don't use credit), and a few others. This approach allowed me to retire at 56 with no debt. Yes, I live a comfortable life (at least as I define it) and enjoyed many things, but I did not buy a new car every 2-3 years, nor buy a house larger than I needed. I lived within my means.

As for my kids, they have all graduated from college and one has an advanced degree. None of them have any debt to include college debt (they were responsible for 50% of their college costs), and they all have anywhere from $10K-$25K saved to start off their adult lives. Hopefully, they will continue to employ some of their learnings, but I do see a difference in each of them in terms of their view towards the "value of money."

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