2841: An Open Letter to My Son About Money by Chelsea Brennan of Smart Money Mamas on Financial Advice

[00:00:00] [SPEAKER_00]: This is Optimal Finance Daily, an open letter to My Son About Money by Chelsea Brennan of SmartMoneyMamas.com

[00:00:08] [SPEAKER_00]: and I'm your host and personal finance enthusiast, Diania Merriam.

[00:00:13] [SPEAKER_00]: Now let's get right to today's post and start optimizing your life.

[00:00:21] [SPEAKER_00]: An Open Letter to My Son About Money by Chelsea Brennan of SmartMoneyMamas.com

[00:00:28] [SPEAKER_00]: The Money Lessons I Hope You Learn

[00:00:32] [SPEAKER_00]: Dear Fussfish, this weekend you turned one.

[00:00:36] [SPEAKER_00]: I won't lie, I cried more than once on your birthday.

[00:00:40] [SPEAKER_00]: Time goes much too fast for me and your birthday party was one more reminder that you will be grown before I know it.

[00:00:47] [SPEAKER_00]: We held a party for you at the house and while Daddyfish and I intended to keep it small,

[00:00:52] [SPEAKER_00]: the people who love you stretch far and wide and you had almost 40 people from 7 different states celebrating you.

[00:01:00] [SPEAKER_00]: You got spoiled with many more presents than Daddyfish and I would have liked.

[00:01:05] [SPEAKER_00]: 8 about half a pound of frosting off your cake and we got asked so many questions about things that seem so far in the future that our heads started to spin.

[00:01:16] [SPEAKER_00]: Because I had just started a new website about family finance, what kept coming up was what we will try to teach you about money.

[00:01:25] [SPEAKER_00]: So here is what we're planning.

[00:01:27] [SPEAKER_00]: If we do it right and I promise we will try our best, reading this letter as a teenager or adult will just be a lot of eye rolling and yeah, dumb mom.

[00:01:38] [SPEAKER_00]: If we fail, I hope this little bit helps even if it comes to you later than me intended.

[00:01:44] [SPEAKER_00]: Number one, be self-sufficient and be your own man.

[00:01:48] [SPEAKER_00]: Sometimes it can feel like we are cattle, especially when it comes to money.

[00:01:53] [SPEAKER_00]: Go to school, get good grades, go to college, get a job, work for 30 years and retire.

[00:02:00] [SPEAKER_00]: While this might be the perfect path for some people, it doesn't have to be for you.

[00:02:05] [SPEAKER_00]: If you can find a way to be self-sufficient in a new or different way, walk that path with pride.

[00:02:10] [SPEAKER_00]: Much emphasis on self-sufficient.

[00:02:14] [SPEAKER_00]: Number two, know where your money goes.

[00:02:18] [SPEAKER_00]: Whether you track every penny you spend or you track your spending in vague large categories, obligations, essentials, non-essentials,

[00:02:28] [SPEAKER_00]: know where your money is going.

[00:02:30] [SPEAKER_00]: Know how much you're saving and where you are versus your goals.

[00:02:34] [SPEAKER_00]: Thinking about your money doesn't make you greedy and keeping a budget doesn't mean depriving yourself.

[00:02:40] [SPEAKER_00]: But understanding your spending patterns will allow you to always make the most of your wealth.

[00:02:46] [SPEAKER_00]: Number three, never stop learning.

[00:02:49] [SPEAKER_00]: Learn new skills, learn about yourself and your goals and desires.

[00:02:54] [SPEAKER_00]: Learn what others did to achieve success and which of those things can work for you.

[00:02:59] [SPEAKER_00]: No one is going to come and tell you the secret to financial success, but the answers are out there.

[00:03:05] [SPEAKER_00]: Spoiler alert, they aren't often found in a school, but there is much to learn from books.

[00:03:11] [SPEAKER_00]: Don't assume the person driving the Lexus has more to teach you than the person in the rusty pickup truck.

[00:03:18] [SPEAKER_00]: Resolve to go to bed each night a little smarter than you woke up

[00:03:21] [SPEAKER_00]: and you'll learn to work efficiently, productively and profitably.

[00:03:26] [SPEAKER_00]: Number four, save, save, save.

[00:03:30] [SPEAKER_00]: The earlier you start saving the better off you'll be.

[00:03:34] [SPEAKER_00]: Compound interest is a powerful tool and you'll want to take the greatest advantage of it that you can.

[00:03:40] [SPEAKER_00]: If you get in the habit early, you'll be able to make life choices based on your desires,

[00:03:45] [SPEAKER_00]: not on whether you can afford it.

[00:03:47] [SPEAKER_00]: Put 10 to 20% into retirement minimum,

[00:03:50] [SPEAKER_00]: but the more you save, the earlier you can retire and allocate your time to the things that most matter to you.

[00:03:58] [SPEAKER_00]: Number five, focus on your real priorities.

[00:04:02] [SPEAKER_00]: We are surrounded by media in all forms trying to sell us things.

[00:04:07] [SPEAKER_00]: By the time you're an adult, they'll probably have found ways to flash ads inside your sunglasses

[00:04:12] [SPEAKER_00]: on your bathroom mirror and on your car's dashboard since it will probably be driving itself.

[00:04:18] [SPEAKER_00]: Know the core things that make you happy and don't allow friends, media or romantic interests

[00:04:25] [SPEAKER_00]: to drive a lifestyle creep towards expenses you don't value.

[00:04:30] [SPEAKER_00]: It's hard to give up the stuff we're used to even if it isn't the stuff that we value.

[00:04:36] [SPEAKER_00]: So don't let the useless weasel away into your life.

[00:04:40] [SPEAKER_00]: By being happier with less, you'll have more career options open to you.

[00:04:44] [SPEAKER_00]: You'll have a greater ability to take risks and you'll ride out the tough times with less of a squeeze.

[00:04:52] [SPEAKER_00]: Number six, spend and invest with integrity.

[00:04:56] [SPEAKER_00]: In a capitalist economy, every dollar is a vote.

[00:05:00] [SPEAKER_00]: No matter your income level, you can decide to support businesses and products that align with your values

[00:05:06] [SPEAKER_00]: and make the world a better place.

[00:05:08] [SPEAKER_00]: The local bookstore might be slightly more expensive, but seeing you pick a new book in the early reader room

[00:05:15] [SPEAKER_00]: or getting book recommendations from the owner who's known you since you were two weeks old

[00:05:20] [SPEAKER_00]: are experiences we are willing to pay to keep.

[00:05:25] [SPEAKER_00]: Number seven, don't be afraid to take risks.

[00:05:29] [SPEAKER_00]: This has to be the one I'm most nervous about being able to teach you

[00:05:33] [SPEAKER_00]: since it runs so contrary to my own instincts.

[00:05:36] [SPEAKER_00]: As I write this, I know I will wake up tomorrow morning to go to a job

[00:05:40] [SPEAKER_00]: I'm not particularly passionate about because it pays well.

[00:05:44] [SPEAKER_00]: I'm reasonably good at it and it provides stability.

[00:05:47] [SPEAKER_00]: I hope by the time you're old enough to remember and learn from my actions, that is different.

[00:05:53] [SPEAKER_00]: But if it isn't, understand that nothing of value comes without risk

[00:05:57] [SPEAKER_00]: and turn to all the other role models who proved that great financial success

[00:06:02] [SPEAKER_00]: can come from ignoring naysayers and chasing your dreams.

[00:06:07] [SPEAKER_00]: Read about Henry Ford, Jeff Bezos, J.K. Rowling, Elon Musk

[00:06:12] [SPEAKER_00]: and so many others who appreciated the risks, weighed the potential benefits

[00:06:17] [SPEAKER_00]: and chased what they wanted most.

[00:06:20] [SPEAKER_00]: Number eight, never spend a dime you didn't earn.

[00:06:24] [SPEAKER_00]: There's no such thing as a free lunch.

[00:06:26] [SPEAKER_00]: When you choose to take on debt so you can buy the things you want as soon as you want them,

[00:06:31] [SPEAKER_00]: you're selling your financial freedom.

[00:06:34] [SPEAKER_00]: Debt makes you an indentured servant and digging yourself out of that hole

[00:06:38] [SPEAKER_00]: will cause more stress than whatever enjoyment you get from that item you're purchasing.

[00:06:44] [SPEAKER_00]: Save for big expenses and for emergencies.

[00:06:48] [SPEAKER_00]: Don't fall into the trap of devaluing your future wealth to benefit your current consumption.

[00:06:54] [SPEAKER_00]: And number nine, you will make mistakes.

[00:06:58] [SPEAKER_00]: Money and finances, like everything else in your life, will be a series of ups and downs.

[00:07:04] [SPEAKER_00]: You'll buy things you don't need.

[00:07:06] [SPEAKER_00]: Daddy Fish bought a boat before we met.

[00:07:09] [SPEAKER_00]: You'll make investments that fall flat.

[00:07:11] [SPEAKER_00]: You'll take jobs for the wrong reasons.

[00:07:14] [SPEAKER_00]: When these things happen, make a plan, remember your real priorities

[00:07:18] [SPEAKER_00]: and fight to get back on track.

[00:07:21] [SPEAKER_00]: If you ever feel like your mistakes are too big to recover from,

[00:07:24] [SPEAKER_00]: remember that Henry Ford went bankrupt before founding Ford Motor Company

[00:07:29] [SPEAKER_00]: and growing his net worth to almost 200 billion.

[00:07:32] [SPEAKER_00]: You'll be just fine.

[00:07:34] [SPEAKER_00]: Fuss Fish, I hope you grow up to feel educated about your finances

[00:07:39] [SPEAKER_00]: and empowered about your decisions.

[00:07:41] [SPEAKER_00]: I hope when it comes to money, you'll never have to say,

[00:07:44] [SPEAKER_00]: why didn't anyone teach me this?

[00:07:46] [SPEAKER_00]: I hope you never have to wake up in the middle of the night

[00:07:49] [SPEAKER_00]: stressed about making ends meet.

[00:07:51] [SPEAKER_00]: And if you do, I hope you learn from it and get better.

[00:07:55] [SPEAKER_00]: I hope Daddy Fish and I set a good example for you

[00:07:58] [SPEAKER_00]: so these lessons are just life for you and not things you have to learn.

[00:08:03] [SPEAKER_00]: And above all, I hope that these years don't go too fast.

[00:08:07] [SPEAKER_00]: Endless love, Mama Fish.

[00:08:13] [SPEAKER_00]: You just listened to the post titled

[00:08:15] [SPEAKER_00]: An Open Letter to My Son About Money

[00:08:18] [SPEAKER_00]: by Chelsea Brennan of smartmoneymamas.com

[00:08:21] [SPEAKER_00]: and I'll be right back with my commentary.

[00:08:25] [SPEAKER_00]: This article had me reflecting on how my Midwestern gentlemen

[00:08:29] [SPEAKER_00]: and I are teaching our 11 year old about money.

[00:08:32] [SPEAKER_00]: In full transparency, I'm not sure we're doing a great job.

[00:08:36] [SPEAKER_00]: We're certainly transparent and open in talking about money

[00:08:39] [SPEAKER_00]: but we failed in sparking interest.

[00:08:43] [SPEAKER_00]: He has a piggy bank where he saves monetary gifts

[00:08:46] [SPEAKER_00]: but he doesn't seem to have many ambitions on how to spend the money.

[00:08:49] [SPEAKER_00]: He doesn't ask for much and he doesn't seem to get any satisfaction

[00:08:53] [SPEAKER_00]: from watching the money accumulate.

[00:08:56] [SPEAKER_00]: Recently at the store, he asked for a treat

[00:08:58] [SPEAKER_00]: after I had already put a new snack he wanted in the cart.

[00:09:02] [SPEAKER_00]: I suggested that if he wanted it, perhaps he could use his own money

[00:09:06] [SPEAKER_00]: and he declined.

[00:09:09] [SPEAKER_00]: So that opened up a good conversation.

[00:09:11] [SPEAKER_00]: If you don't want something enough to spend your own money

[00:09:14] [SPEAKER_00]: maybe you don't want it enough to spend family money on it either.

[00:09:17] [SPEAKER_00]: We're also trying to get him interested in earning money.

[00:09:22] [SPEAKER_00]: We don't want to give him an allowance for chores

[00:09:24] [SPEAKER_00]: because we want to teach him that doing chores

[00:09:26] [SPEAKER_00]: and contributing to the household is just something you do.

[00:09:30] [SPEAKER_00]: We've offered ideas on how to earn money

[00:09:32] [SPEAKER_00]: and are continuing to challenge ourselves to foster this interest.

[00:09:37] [SPEAKER_00]: Time will tell but I'm hopeful that by leading by example

[00:09:40] [SPEAKER_00]: and continuing to have open conversations about money

[00:09:44] [SPEAKER_00]: and the role it plays in our lives,

[00:09:45] [SPEAKER_00]: we'll be setting him up to make good decisions when he's older.

[00:09:50] [SPEAKER_00]: But that'll do it for today.

[00:09:52] [SPEAKER_00]: Thank you for listening, have a great rest of your day

[00:09:54] [SPEAKER_00]: and I'll see you tomorrow where Optimal Life awaits.