135 135
136 137
137 138
138 139
139 140
140 141
141 142
142 143
143 144
144 145
145 146
Money Minded Families
How to Raise Financially Well Children
Stephanie W. Mackara
Copyright © 2020 by John Wiley & Sons, Inc. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750–8400, fax (978) 646–8600, or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748–6011, fax (201) 748–6008, or online at www.wiley.com/go/permissions.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762–2974, outside the United States at (317) 572–3993, or fax (317) 572–4002.
Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com.
Library of Congress Cataloging-in-Publication Data is Available:
9781119635901 (Hardback)
9781119636021 (ePDF)
9781119636007 (epub).
Cover Design: Wiley
Cover Image: © Sara Shrouds of Abstract Sara Studios
To BernieFor hearing my thoughts, understanding my dreams, and being my best friend… For filling my life with music, and loving me without end… thank you.
Acknowledgments
Writing a book is harder than I thought and more rewarding than I could have ever imagined. None of this would have been possible without the love, support and inspiration from my boys Bernie and Jacob. Bernie for giving me the space and encouragement to follow my passions and Jacob for being my guinea pig, my heart and my inspiration.
I'm eternally grateful to all of amazing colleagues I have the pleasure of calling my friends over my career who have led, empowered and showed me that anything is possible. I learned so much about business, leadership and grace from each of you.
To my girls, my chosen family, whose unwavering support, compassion and honesty I cherish. To my Mom, brother Michael and sister Karen, who helped to guide and shape my experiences and my person as I grew, these memories and experiences led me here.
To everyone at Wiley for taking a chance on me and my book. Thank you for turning my scribbles into something more.
Finally, a huge THANK YOU! to all the others who encouraged me along this journey and have been a part of making this dream come true.
Introduction
In addition to being chefs, therapists, nurses, chauffeurs, and more, parents are inevitably teachers, despite most of us not having a degree in education (or for that matter, in any of these professions). For so many facets of parenthood, there is no guidebook or instruction manual. As parents, we tend to focus most of our energies on the emotional and physical wellbeing of our children. I propose we must also focus on their financial wellbeing.
Children are extraordinary learners from a very young age. They master concepts, language, walking, negotiating, and more in just their first few years. Yet we typically don't engage our children in learning about financial matters until much later in life, if ever. This is a mistake. In fact, perhaps because of this mistake, many parents never truly become knowledgeable about basic finances, let alone master their own.
According to the Consumer Financial Protection Bureau, “financial wellbeing” is defined as “a state of being wherein you have control over day-to-day, month-to-month finances; have the capacity to absorb a financial shock; are on track to meet your financial goals; and have the financial freedom to make the choices that allow you to enjoy life.” My definition of financial wellbeing is much simpler. Financial wellbeing is a state of clarity, purpose, and direction; it is not separate from your personal wellbeing, in fact, financial wellbeing is inextricably intertwined with your overall health. We must begin to incorporate all aspects of wellbeing into our daily lives: emotional, physical, and financial, in order to optimize our personal health. And it must begin at a very young age.
As someone with a career in finance, I want to help you have important conversations and experiences about money with your children. Recognizing and making the most of “teachable moments” as they present themselves can help shape your children's future attitudes and behavior around their finances and give them a sense of financial wellbeing. After all, parenting is, if nothing else, teaching our children to make smart choices that allow them to enjoy life.
I have a son of my own, Jacob. My husband, Bernie, and I have worked hard to lay the groundwork to help him create smart and healthy financial habits. Starting when he played with a toy cash register as a toddler, I tried to teach him how credit cards work. He was too young to fully grasp the lesson then, but our conversations about money evolve as he grows up. I wish I had the same open communication with my own parents when I was a kid. Instead, I grew up like many children of my generation where money was a taboo topic in our house. When I asked my parents about their salaries, I was told I was being crass and inappropriate. It made me feel that money was bad, something never to discuss. It took me years to correct this negative association. Never forgetting how that made me feel, I want to make sure that Jacob knows only