A few weeks ago, my two-year-old daughter broke her leg. An innocent trip from a few steps up resulted in a “baby fracture” – a hairline fracture in his tibia caused by a hard fall – a cast, and several weeks of surgery on him while he recovered.
I hadn’t paid much attention to him since he was a baby and as I carried him from room to room, I found myself thinking about his life and his future. If I couldn’t protect him from a broken leg now, how would I protect him in the big, bad world at 18, 21 or 35?
At least part of the answer, in my opinion, is to teach him about money. As a financial coach and author, I want him to learn from my mistakes and make smaller, less risky ones. (When I was 29, I had more than £27,000 of credit card debt, which was my pre-tax salary.) I want to do what I can to make sure his financial health comes together right away, rather than spending more than a decade in the shallows, like I did.
A large amount of the financial well-being of adults can, of course, depend on the wealth of the parents – the Bank of Mom and Dad – but another part is the knowledge and education that they provide, and I intend to do my job.
It is important to note that I also have two sons, with whom we are already actively involved in all things money, but until all the various gaps in gender equality and wealth are closed, it seems that our daughter’s financial education needs special attention, prepared.
There are some basics that I think will set him on a solid path (whether he chooses to stay on it or not).
Balance your career with your life aspirations
I first heard the term “lifestyle planning” at least five years ago and while it may sound like girlboss jargon at first, it actually makes a lot of sense with meditation. We are too young to make decisions that will determine what we get for at least the first part of our adult lives and general career advice is often all we get. We may have negative thoughts about our talents and ambitions but we rarely think about the kind of life we have chosen to give us, at least without some encouragement from our parents.
Of course, I don’t care what kind of life or career my daughter chooses, but I want her to go into that decision as open as she can. I like to make sure you know what kind of pay your chosen career will get you, what kind of hours you can work and where you can focus your lifestyle – because there is no difference. It can lead to frustration, sadness and more debt if you try to make a bad credit.
Always keep the Freedom Fund‘
A little more than your average “Emergency Fund”, the “Freedom Fund” (or “F**k Off Fund”), is designed specifically as a way to escape from a difficult situation. I don’t want my daughter to feel obligated to a bad spouse, or a bad boss, or any situation that could endanger her physical or mental health, safety or health because she doesn’t have enough money to break free.
Sure, we can hope he’ll always be there as a backup but I want him to feel confident standing on his own two feet, safe in the knowledge that he can pay his own way and make his own decisions.
Start investing from your first salary
I often think about what my life would be like now if someone sat down at 21 and explained to me a shared interest, but, instead of a time machine, at least I can pass on what I know now to my children.
Rather than lament the £50,000 I could have saved if I had invested £100 a month from 2011, I want to encourage my daughter to see what this opportunity could be for her. We’ve been investing in a mini ISA for him since he was born – a small, stable amount that should give him a good starting point on his own investment journey.
As he gets older, I will show him how investing even a small amount of his income can help him build real financial security over the years, without even realizing it. We have already discussed comparing his contributions to several years of his childhood, to help him develop that habit.
Always communicate
Negotiating salary at every stage of life – from early career to mid-life – is essential for strong growth but for women, additional benefits, such as a generous pension, paid holidays and health insurance, can be where the real difference lies.
Before I started freelancing, I rarely had salary negotiations. I was often afraid to ask about compensation in job interviews and happy to accept what was offered, instead of being confident enough in my ability to ask what the company could offer. me in return for my skill. My salary only increased in small increments, and I only ever received statutory benefits.
Negotiating a better parental salary (and encouraging a partner to do the same) can reduce the loss of income if you start a family, while asking for more pension money from your employer can help cover any time you spend out of work. It could help reduce the gender pension gap between men and women, which, according to the latest data from PensionBee, currently stands at 37 percent.
Self-love is your armor against overspending
Not all the wisdom I want to impart is practical – some aspects of financial education are deeply emotional. I could not tell you how much I have spent over the years, trying to “fix” the parts of me that society has told me are not good enough.
Sometimes when I didn’t love myself, it was very easy to fall for marketing promises and spend money I didn’t have, and it hurts me to think that my daughter – the most beautiful creature I’ve ever seen in my life – could feel this way.
I’m not sure how I can protect him from all the outside forces that may plan to tell him that he needs to buy this powder or that tool but I hope that I can teach him to love himself and that this can form some kind of armor around him.
Use credit wisely – or not at all
Fortunately, I have a well-written cautionary tale to share here. Before my daughter was born, over a period of 10 years, I accumulated a lot of debt, spread across many different credit cards. Some were down to the high cost of living and low income in my twenties; most of the money was for my wedding and a little was to try to keep up with the Joneses (ie mumfluencers on Instagram).
But, unfortunately, I did not realize how much it can increase, and how much credit can help bad buying habits. I want to teach him how easy credit is to hide your money from you, to separate the pleasure of buying from the pain of paying until you can’t appreciate the ongoing value exchange. I want him to understand that if he wants something, there is a price to pay.
I don’t want him to fear debt, though – because that’s a form of abuse and shame. Instead, I hope to teach him how to use it properly, what the red flags for over-reliance are – is he bumping into his credit limit or reaching a debt beyond his budget, for example – and what he can do if he finds himself stuck with a large amount.
Give yourself a chance to have fun
As much as I want my daughter to spend and save wisely, I don’t want her to feel compelled to make money for each hobby or save every penny to the detriment of her enjoyment of life. I will always encourage him to keep a pot of money for innocent spending and show him how, especially when you start young enough, spending on your lifestyle and saving for your future doesn’t have to be special. Now, in my thirties, putting away £50 or so a month to spend as I see fit helps me take care of myself without worrying that I’ll be spending it elsewhere – especially as a mum.
I know some of these things may be silly and that my daughter will make her own money mistakes throughout her life but we shouldn’t underestimate the influence of parents on our attitudes towards money as we grow into adulthood. I want to prepare him as much as I can.
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