5 ms·

What are good money habits? Inflation eats savings and debt is incredibly cheap at the moment. Being 'good' with money basically keeps you at the exact same s

What are good money habits? Inflation eats savings and debt is incredibly cheap at the moment. Being 'good' with money basically keeps you at the exact same socioeconomic level but risk-taking and entrepreneurship generally correlate with social mobility. Anyhow, IMO, make them do chores for an 'allowance'. Teach them that work = making money. As they get older you should instil in them that making more money is far superior to all the saving in the world, especially at a young age. Education and risk-taking in your 20's is far superior to trying to save for retirement from 20 years old.

ido 5y ago
Education and risk-taking in your 20's is far superior to trying to save for retirement from 20 years old. Education, yes...Risk taking? That depends on how the risk turns out ;) I'm 38 and have been an entrepreneur several times (currently managing a small startup of 5 employees). I would have been at a much better situation financially if I decided at age 20 to optimize for getting hired at a FAANG-type company and going up the ranks while saving a good portion of my salary. And that would have had a small fraction of the risk of starting my own company.
- frankbreetz 5y ago
  sounds like you should have given up risk takeing toward the end of your 20s
  - ido 5y ago
    I like where I ended up! But it was not the financially optimal outcome.
- Mikeb85 5y ago
  Risk can take many forms. Going to college at all can be considered a risk versus going into a trade depending on your socioeconomic status.
  - ido 5y ago
    Not if you study CS. That must be the least risky profession you can learn (if you have the aptitude and interest for it at leaset).
BoorishBears 5y ago
Making them understand work = money is great and I'd add making them understand the concept of not being able to afford something. So many people in tech have reached a level of TC where the things they can afford on a whim are things the average household would wring their hands over. And that ends up applying to the kids' wants even if you're not trying to spoil them. It's just reality that, while you might deny them big things, "small things" on these salaries are not small for most people. Learning that sometimes you just can't afford something is an important lesson. That there's no shame in that, that there'll always be something else, etc. That ends up implicitly discouraging the trap of building up debt when you're young to keep up a certain standard you're used to, which I think is a common problem when kids of high earners go out on their own. - Also an important corollary to your point about work = money: making them understand your money is not their money. Sounds harsh, but even if they're going to inherit it, it's still money that you worked for. It's a dangerous mentality to start assuming your parents' successes are your own without having experienced what it took to achieve.
restes 5y ago
>Inflation eats savings Well, spending eats it faster. >Being 'good' with money basically keeps you at the exact same socioeconomic level but risk-taking and entrepreneurship generally correlate with social mobility. Implied in there is that the goal of savings should be to increase your standard of living, but for some I think the goal is to maintain their current standard of living over time even as their income changes. Granted many savers might already be at a comfortable standard of living, maybe as the result of prior successful risk-taking. Learning to develop your earnings potential in your 20s is probably the best savings strategy (but you should learn to save too).

ido 5y ago

Education and risk-taking in your 20's is far superior to trying to save for retirement from 20 years old. Education, yes...Risk taking? That depends on how the risk turns out ;) I'm 38 and have been an entrepreneur several times (currently managing a small startup of 5 employees). I would have been at a much better situation financially if I decided at age 20 to optimize for getting hired at a FAANG-type company and going up the ranks while saving a good portion of my salary. And that would have had a small fraction of the risk of starting my own company.

frankbreetz 5y ago
sounds like you should have given up risk takeing toward the end of your 20s
- ido 5y ago
  I like where I ended up! But it was not the financially optimal outcome.
Mikeb85 5y ago
Risk can take many forms. Going to college at all can be considered a risk versus going into a trade depending on your socioeconomic status.
- ido 5y ago
  Not if you study CS. That must be the least risky profession you can learn (if you have the aptitude and interest for it at leaset).

BoorishBears 5y ago

Making them understand work = money is great and I'd add making them understand the concept of not being able to afford something. So many people in tech have reached a level of TC where the things they can afford on a whim are things the average household would wring their hands over. And that ends up applying to the kids' wants even if you're not trying to spoil them. It's just reality that, while you might deny them big things, "small things" on these salaries are not small for most people. Learning that sometimes you just can't afford something is an important lesson. That there's no shame in that, that there'll always be something else, etc. That ends up implicitly discouraging the trap of building up debt when you're young to keep up a certain standard you're used to, which I think is a common problem when kids of high earners go out on their own. - Also an important corollary to your point about work = money: making them understand your money is not their money. Sounds harsh, but even if they're going to inherit it, it's still money that you worked for. It's a dangerous mentality to start assuming your parents' successes are your own without having experienced what it took to achieve.

restes 5y ago

>Inflation eats savings Well, spending eats it faster. >Being 'good' with money basically keeps you at the exact same socioeconomic level but risk-taking and entrepreneurship generally correlate with social mobility. Implied in there is that the goal of savings should be to increase your standard of living, but for some I think the goal is to maintain their current standard of living over time even as their income changes. Granted many savers might already be at a comfortable standard of living, maybe as the result of prior successful risk-taking. Learning to develop your earnings potential in your 20s is probably the best savings strategy (but you should learn to save too).