“My mother used to cut coupons every week.”

Growing up in a single parent home, I was always taught to have a simple mindset. My mom clipped her coupons every week and her money worries often became mine.

I thought that going to college and getting a good job would solve all my financial problems. But even as my wife and I pursued our careers, most of our income went toward basic living expenses and paying off student loans.

But last year, at the age of 37, he achieved a net worth of $1 million. We took care of our finances by saving more, starting side businesses, and investing in real estate.

We also wanted to be a role model in being financially responsible for our two young children. In 2020, my wife and I launched the Parent Portfolio to help families build wealth across generations and learn how to raise financially literate children.

Here are the 5 money rules I teach my kids.

1. Always rethink one-time purchases.

We live within our means.Therefore, even if income increases It doesn’t increase our spending. I’m not saying you don’t enjoy the fruits of your labor.

For example, if my child wants to buy a toy, I ask these three questions:

“Is this really what you need?”
“Do you plan to use it often in the future?”
“Are there cheaper options that serve the same purpose?”

We also discuss our unique decision-making process and point out the value of items that we buy and use frequently.

2. Budgeting gives you more freedom.

Many people think of budgets as a restriction, but I actually see it as a tool to create more financial freedom. You can save money by avoiding overspending.

When our son wanted money for the school book fair, we gave him a budget of $40. For him, it became a game of how many worthwhile books he could get for under $40.

Another important lesson: Budgeting is not a “set it and forget it” practice. We review our budget monthly to make changes based on the current situation.

3. Don’t let social media affect your spending.

We often forget that social media is just a highlight reel. When people post pictures of their fancy vacations or fancy new cars, it’s only part of the story.

We address this kind of peer pressure by limiting our children’s use of technology. Tablets can only be used on weekends and are limited to 2 hours per day.

We also strive to set a good example. He limits his daily activities to one hour a day, never taking out his phone when eating together, and using apps that disable social media.

4. Know where your money is coming in and where it’s going out.

Teach children about more complex money topics using age-appropriate words, tools, and examples.

For example, we take them to project sites to give them a concrete understanding of what we do in the real estate business and where the money we make is coming from. , will introduce you to the contractors we work with.

I also use a lot of visuals. To illustrate how transactions are conducted between banks, borrowers, tenants, and landlords, I made a simple sketch with an arrow pointing to each group.

5. Start saving early and don’t expect to get rich overnight.

One of my favorite stories to tell my children is about the turtle and the rabbit. The lesson is that it is wiser to do things slowly and steadily.

Building wealth is very similar in that it doesn’t happen overnight. When children receive monetary gifts, we deposit them into their bank accounts.

“For now, your mother and I are responsible for meeting your needs and wants,” I tell them. And when I’m old enough, I can use that money for my goals.”

In a world of instant gratification, teaching children the value of patience and an early start is even more important.