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Teaching Your Kids About Money While You are Still in DEBT

You don’t have to have it all together to be an example of financial freedom!

Here is a little story of my parents:

My parents were (and still are) great examples of financial management while I was growing up. Although they both worked full time jobs and contributed to their company sponsored retirement plans, they strategically funneled their extra funds to build a real estate portfolio. Over 20 years they acquired over 15 properties they use for rental and short term flips.

Their investments have paid off and now they are able to do what they always wanted: Have time to do what they want to do! They vacation, spend time with their grandchildren, enjoy hobbies without the need to punch a time clock.

They were able to do this because they invested during their “prime working years” and are now living the fruit of years of invested capital and sweat equity.

But ...the lifestyle they have now did not come without a few financial hiccups early into their adult lives. Despite their financial crunch she and my dad rose from the bottom up and began building their real estate portfolio.

Having a first row seat of my parent’s financial success and hiccups encouraged my husband and I to strategically teach our children financial management even when we did not have it all together!

These are a few of the key things I saw growing up and how we teach our children the skills they need to be financially successful:

1. Kids don’t need a Perfect Person... They Need a Real Example

I’m sure everyone would love to be 100% debt free with $100,000 in the bank but for some people this is still a goal and not reality. Allow children to see and be apart of your debt payoff and financial plans. Allowing them to be apart of the plan, especially for older children, gets them on board especially when you may have to deny some of their personal financial requests.

Below is a colorful financial plan we created with our son in 2014 when he was only one year old! We wanted him to be apart of our plan even if it meant just him helping color. Although he may not have completely known what we were doing he knew mom and dad had a plan to get out of debt quick!

2. Kids are Listening even if You’re Not

I talked about this in my post The Mindset You Need To Produce Wealth that your language must match where you are going and not where you currently are. Negatively verbalized financial hardships even if said out of frustration can build a negative connotation between money and your child.

I am definitely not suggesting that you build a frame and act like you are where you want to be but use your words surrounding finances wisely. I know of people whose child financial vocabulary consisted of phrases such as:

“We are always behind.”

“Every dollar we have goes to bills.”

“We don’t have money for anything”

These words can not only bring anxiety to a child but set the tone and beginning action driven behaviors of their adult financial roadmap. Speak on purpose.

3. Your Failure = Their Success.... if Taught Correctly

As I got older, my parents would express the pros and cons of flipping, being a landlord and all other aspects of the real estate field. They were very honest and more importantly they shared their failures in addition to their success stories. They communicated their trials as stepping stones to becoming more efficient and profitable for their next investments.

Hearing and reliving their stories as a child gave me confidence and inspiration to invest that transcended into my adult life. As a result, I purchased my first real estate property at the age of 22 and three additional properties by age 31 with my husband.

Their financial walk, although rough at times, equipped me with the tools of the trade to begin my own financial journey successfully.

4. Your Little Wins are Their Big Wins

That extra $5 that went toward paying off a credit card vs a Starbucks coffee is a win for you and your children! How? You are paying off debt and they are viewing and registering in their mind the actions needed to be financially savvy!

This should be motivation to even the most novice of financial stewards. Although it may not feel like it, children see their parents in such an innocent state. They only see what is being portrayed and spoken to them. So speak and behave wisely!

You can check out the full interview with my mom and her rise from financial crunch to Real Estate Tycoon on my NEW podcast Marriage, Money and Motherhood airing at the end of September. Stay tune for details!

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