money lessons

With our money group in our 6th year, we've been trying to pass along these lessons to our younger cousins. When they get their first jobs, we ask them what they're going to do with their money and have them start thinking about things they want to do.

One cousin started her job. And she said she wanted a video camera, like a really nice one. So, she started putting away money, part going into the video camera and another part to savings. She eventually bought her camera and just kept right on putting the money the way afterwards.

Another one now has $1500 in a CD, a 401K, and is several hundred to save for a trip to Spain to visit her sister.

One aunt had been pestering her son to put away money, he's just 16, but like most things she says, he didn't listen until we smacked him over the head with numbers, then he realized what his mom was talking about.

The one with the camera is about to finish school, so now we're talking about what she wants to do next. How she'll probably move back home and so she can put more away and build up her savings.

The 401K girl is ready for the next step, because now she's getting "greedy" and wants to find some place else to hold the $1500 that gives more than the CD. She tells me that she doesn't feel like spending that money like she used to. I told her that's good, it means she likes the money more than the stuff she would have bought with it, or that if she's going to spend it then it better be something damn good. In essence, money now has meaning. So we chatted a bit about stocks and roths and dividends. She looks at her account and thinks if she had started saving at 16, "she would have been rich by now!". She's barely 22 now.

I didn't bother telling her about how to pick stocks and blab about p/e ratios and all these other factors that frankly I really still don't comprehend half of those numbers. But I was honest and told her that I've won some and lost some cuz that's what happens, not every stock is a winner. And she got the real lesson that picking stocks well has a lot to do with simply having experience in doing it.

What I've come to see in my cousins as they learned these habits, is how they don't worry as much about money as their parents do, and how much independence and freedom they have in their lives because of it. There was that phrase, "Another day, another dollar" which was more associated to the burdens of work, but in their heads it's more non-chalant, "well there's always another day to get another dollar". And that having money to do the things they want to do and have the things they want is not some way way in the future thing, it's something that happens right now. To understand the numbers enough so they control the numbers instead of the numbers controlling them. And because of that, it makes it easier for them to learn what's important to them. 401K girl doesn't care about the latest accessory because she'd rather visit her sister and travel.

True money is not everything, but it's also not nothing. And if you want the first half of the statement to be true, then money has to be something. I've seen too many people simply ignore it like the big elephant in the room. And when they finally have to deal with it, it tramples the hell out of them.

We haven't had these talks with all of the cousins yet, at least not until they have a job or have some regular money coming in, when it makes more sense. In the same way they've learned to save, we've been giving them these lessons bit by bit. It'd been a good year since we'd talked to 401K girl about saving so it was nice to see her numbers. I had forgotten that we had talked with her about it, but it was good to see that she hadn't forgotten.

401K girl thanked me for the chat. I told her to remember to invite us to use her pool when she's rich. And she replied, "You'll have to choose which one to swim in."