Embrace the August Call to Action (You Could Win $100!)

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Back to SchoolIt may only be August, but for anyone who wants to start making progress on their money, school is officially back in session!

That’s right—we’re ushering in the end of summer with a month that’s jam-packed with helpful articles on how to get organized and financially prepare for the months to come.

And in the spirit of the back-to-school season, our August call to action centers on how we can pass positive financial habits onto the next generation. So for your first homework assignment of the month, we want to know: What’s the most important money lesson we should teach our kids—and how can we do it?

Maybe it’s mastering the art of saving by paying yourself first. Or it’s committing to achieve top financial goals as fast as possible—perhaps by picking up a fun (but profitable!) weekend gig, just like the people you’ll hear from next week.

Whatever it is, please share the lesson you think would make the greatest impact in the comments below—and you’ll be entered for a chance to win $100! And be sure to use your email address when you comment—it won’t be visible to other users—so we can notify you should you win.

Open only to legal residents of the 50 states and the District of Columbia who are at least 18 years old as of the date of entry. Premium users are not eligible. Contest running from August 1, 2014, through August 22, 2014. We will select the most compelling entry as the winner, and his or her story may be published on the site.

LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. Unless specifically identified as such, the people interviewed in this piece are neither clients, employees nor affiliates of LearnVest Planning Services. LearnVest Planning Services and any third parties listed in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.

  • Selena

    I would say to balance your purchases with your savings. It’s a balancing act with each purchase. It’s a give and take with yourself. If you spend money now, you won’t have it later for something potentially more important.

    With this, I’ve learned to live in moderation with each choice. You don’t have to live like you’re broke to save. I grew up with a father who was very frugal and a mother who loved to shop and built up a lot of credit card debit. Seeing those two extremes, I found myself happy in the middle.

    I save money each month, but I also still enjoy myself. I go on great vacations and have fun on occasional weekends but I counter those with saving, clipping coupons and skipping out on outings that I don’t see more value in than the cost of doing them. It’s all about choices.

    I weigh the cost and the benefit of every purchase. I mull over big purchases, research the best and cheapest option, and hunt for coupons. That may mean purchasing online with a discount code and using free store pickup.

    Using this method, at 26, I have one credit card I got after college to build credit, and pay it off with every use. When I bought my first home, I put down well over 20%. And when I bought my house, I kept my emergency savings in place, and continue to add to it. Even though a new shiny car would be great, I continue to drive the car my parents bought me since it’s paid off.

    You have to remember that you’re taking from your future to give to your present self. Each purchase better worth it.

    How should we do that with kids? It might be to ask them what expensive toy or outing they would really love to have. Then, each time they want something smaller, ask them if they want to the goal toy or the small toy that will be forgotten in a week. This might require a picture or some other visual item of the goal toy since it can sometimes be hard for children to put a value on something they can’t see. You can have a special piggy bank just for that goal toy.

  • Julie

    I think that our children need to understand the concept of taxes, and how to handle any money they are gifted as they grow up. I used mason jars and started my girls when they were 4 and 6 years of age. They had a tax jar (and understood that that money is given to our environment: library, forest preserve, parks, sidewalks, and other things that they enjoy in our town and state). The next jar was to pay themselves. The third jar was for long term savings (in the bank), while the forth jar went to funny money (spending money). The jar that paid themselves had a purpose. It was a long term goal they wanted to achieve in order to make a purchase that they wanted. I incorporated percentages for each jar so that any time they received money they new how much to put in each jar. My oldest is now 17. She has worked two summers and has built an impressive savings account. She stops spending if her checking is low. She never takes out of savings, so she always has to be looking ahead. She is very thrifty with her money, and I am proud of the responsible adult she has become. Credit is the lesson that we started in high-school. Definately the second step to her plan for independence!

  • Stephanie

    I know the one thing that I am going to teach my children, as I believe others should as well, is just because a certain amount of money is available for you to borrow does not mean that the amount is what you should or need to borrow. I am personally learning from this the hard way with regards to my student loans. I was young with great credit and decided that if I was going to be offered 20K each time I applied for a loan that I was going to take it. I didn’t think about how I was going to re-pay it or what I was even going to use it for. I paid for my college tuition and books and then who knows that else I did with it. All I know is that I
    spent and all and am now swimming in a sea of student loan debt that I do not know I will ever get out of. I know that I am just one of thousands that are going through the same thing and it is not just student loans. Housing loans and personal loan and car loans. It is so easy to get caught up in the excitement of the amount that you can have to spend on whatever it may be, that we forget
    to take a look at the bigger picture and the payment that is going to come of it. I wish every day that I would have done things differently when it comes to my finances. I am still trying to figure it all out and am working multiple jobs to try to get it all gone. Debt is an overwhelming burden and it is something that I could have easily avoided. I know that I do not want my children or anyone else to have to stress about money like I do. I have learned from my mistake and I think it is extremely important that we educate our children in the matter of loans of any sort. We need to help them understand how to figure out what they really need a loan for and what the true cost is that they would need to borrow. Talk alternative options with them and talk to them about what the long term outlook of the loan is going to be. Talk to them about wise spending and borrowing. Help them work out a plan that allows them to have the best chances to financially succeed at life. I know I would have benefited from all of this.

  • Clara

    As a first-generation student, and an individual who grew up in a low-income household, there were a lot of things I wish my parents knew that they, in fact, didn’t–it’s safe to say, “you don’t know what you don’t know.” I have a 4 year old, for whom I opened a college fund, and have been paying a minimum of $25 a month, I am also paying for life instance at just $21 a month. Because I am taking the “future steps” to help my daughter when the time comes, it will make her life that much easier. I let my daughter know, “I’m saving up money for you to go to college like your mommy” and we keep a piggy bank in the closet for her to put money in such as loose change, or a daily/weekly allowance of a varied amount ($1 one day,
    $5 another). At the end of the month, we count how much money she has saved up. It’s been about 3 months since we got the piggy bank, and now every time that she puts money in it, she says “I’m saving up money to buy my princess room.” Hey, that’s a start!

  • Karen

    My greatest advice I give to my daughter about saving is what I learned from my father….the greatest person to model a savings plan after for anyone. That advice is always remember those in need and remember “wants vs needs”. There is always a moment each day to be thankful for what you have and look for a way to give. Life is too short not to look for those opportunities to enrich someone else’s life. Then, be sure to focus on needs rather than wants. You do not need all the material things that so many are focused on. Material things do not buy happiness and usually become more of a burden. My father was a farmer and self-employed. He knew the true value of hard work and the true value of money earned.

  • Mindy

    Every time our children get money, we should teach them the give/save/spend ratio (10% goes in the give bank, 10 to 20% in the save bank, and the rest in the spend bank). If our children get in the habit of doing this with their money while they are young, hopefully they will continue this into their adult years.

  • daynalynndavis

    Compounding interest – how it can both help and hurt you. Credit card companies target young consumers because they don’t necessarily have the education to know what they’re getting into. I’ve oftentimes wondered why personal finance isn’t a class in junior high and high schools. It’s such an important topic. I certainly wish I’d had a class about finances when I was younger. By the time I really learned what I needed to know, I was tens of thousands of dollars in debt.

  • Jill Sabo

    Only pay with cash!!

  • Christen

    Save, even just a little at a time. It is great to even set a percent amount to each gift or earning to be set aside.

  • Keya

    The best money lesson I gave my daughter is where to find reliable research tools. My daughter like most young adults, would base her decisions on advice from friends and family (mainly friends). Sometimes the advice from friends weren’t plausible. One example was that she could get a 5 year old Honda for just $2K. Rather than arguing about it. I showed her the nadaguides website. Based upon her criteria (low mileage, age, make and model), she was able to see what the average price of her desired car would be. Then we had her talk to one of my husband’s friends who purchase cars at salvage for dealerships. He explained the cost/benefits of low priced cars including repair costs to bring the vehicles up to par. Then we went to two dealerships and she voiced to the dealers her vehicle criteria and how much she was willing to spend. One dealership was able to find a vehicle at her discounted pricing but I pointed out the various repairs that the vehicle was going to need and whether or not she had the money upfront to pay for those repairs and how much difference it would be between discounted car plus repairs against a more expensive car.
    In the end, my daughter increased her purchase amount and we found a car of the same make/model and year as my car and she ended up paying at least $5K less than I did with a lower interest rate (I had purchased my used car a year prior).
    Now whenever my daughter wants to make a financial purchase, she comes to me and I direct her to some helpful financial websites.
    Too bad I learned about most of those websites after I made my own financial purchases.