This post is a first look at the new book Guerrilla Parenting: How to Raise An Entrepreneur, available on March 12.
So much is gained by your children seeing your struggle and your effort to organise the home finances. These are real things, real issues that kids need to experience and understand how ever they possibly can.
By doing this they can become more sensitive to how money is spent, what things cost, and that money does not grow on trees.
Yes, I know many parents tell their kids that money doesn’t grow on trees, but how many really explain it with a little more detail consistently throughout a year. I’m not saying you need to tell your 5-year-old that they may not have a home to live in or a bed to sleep in if things go wrong. I am just saying that you should share some of the real finances.
You don’t need to know exactly what you are worth or how much you have saved, but you should share roughly what you make and what budgets you have.
These discussions prepare them for what it takes to make a living and provide for themselves.
These conversations may be very generalized when kids are younger, but by the time they are 8 to 10, things should get more specific. By the time they are teenagers they should have a pretty clear understanding of what it takes to pay for your style of living as well as what it would take for you to have a higher or lower cost of living.
Things to share with your kids through various ages are…
1. How much you pay for where you live.
2. How much you pay for transportation, including insurance and gas if applicable.
3. How much food costs in your home.
4. What utilities run.
5. How much you spend in general on vacations, holidays, and birthdays.
6. How much you save and why.
7. How much you make gross and net.
8. How much you might pay in taxes and why (good luck on that one).
9. How much the family spends on fun and entertainment.
10. How much the family spends on clothes and gear.
11. How much the family spends playing sports, music, and other extra-curricular activities.
12. How much you invest and why.
Many successful people become ego maniacs, but don’t let this confuse you. Very few of them started out this way. Unfortunately ongoing success can make people believe that they are better than and greater than other people. Ego can make people forget what got them there in the first place.
Some parents actually compliment their kids so much they walk around saying “Aren’t I so pretty?” and “I’m so smart.” We must be careful to love and lead in the right way.