Warren Buffet advises parents to start teaching financial skills to their kids early.
“Sometimes parents wait until their kids are in their teens before they start talking about managing money—when they could be starting when their kids are in preschool,” he says.
At five years old, it’s easy for kids to think that money grows on trees. However, kids who grow up on a farm have a front-row view of understanding the true financial cost it takes to run a family business. Equipment breaks, animals need to be fed and they witness older generations working hard for what they have. It is truly easy for kids to quickly learn the value of a hard-earned dollar living and working on a farm.
I remember growing up wanting to spend some of the money I made from selling my 4-H market animal on school clothes. My father, who grew up poor beyond my comprehension, said I had to make a budget first.
“Make a list of what you need and then put a value next to it and we will talk about how much you can spend,” he said.
A Need Versus a Want
I remember going through my dresser drawers and closet to do inventory and then putting the value of brand name clothes next to it and then submitting it for my father to review and approve. However, he didn’t approve of it because he questioned how many 14-year-olds need four pairs of $50 jeans. Dad then flipped through an ad in the Sunday paper for the local Big R that was selling good denim jeans for $12.99. He said I could either get one pair of name-brand jeans or four pairs of jeans from Big R. I remember thinking how unfair this was, but he planted a valuable lesson at a young age—understanding a need versus a want.
I have passed this lesson on to my children, who by the way haven’t had to buy their school jeans from the local farm store, but they do have to purchase their own school clothes. This makes them work harder and learn to budget for what they want. The kids have no problem spending their mom’s money, but they think twice when they have to spend their own.
Our oldest son, Tyler is now a sophomore in college, studying ag business. Tyler plans to come back to the farm and already has Excel spreadsheets, earmarking how he is saving his own money for future needs. He also very involved in looking at our farm’s financials and understanding the cost it takes to run a dairy.
My advice is it really is never too early to start having financial conversations with your children. Start early and help them set goals and learn healthy financial habits that will launch them for future success.
