I recently finished reading Sam Walton’s autobiography, Made in America.* I admit, I’m not a huge Walmart fan, but I was pleasantly surprised by how much I enjoyed the book. It was very interesting learning about how hard Sam Walton worked to grow Walmart and how (like us) he involved his family in the business. I read many parts of the book out loud to Jim, but this one part I read out loud at the dinner table.
“As kids, we all worked for the company in one way or another. I got to work behind the candy counter or run the popcorn stand when I was five years old. The business was part of life, and it was always included in the dinner conversation. We heard a lot about the debt it took to open new stores, and I worried about it. I remember confiding to my girlfriend one time – crying – and saying, ‘I don’t know what we’re going to do. My daddy owes so much money, and he won’t quit opening stores.'” – Alice Walton (daughter)
My children all laughed at that because it was something they could immediately relate to.
Not only have my children been involved in Goat Milk Stuff from the very beginning, but they have been involved in all of the finances and the decision-making as well. Of course, when they were younger, they didn’t really understand the implications of everything we discussed. But they knew that they were involved.
Not everyone has a family business (although I would love it if more families started one). But every family has finances. We’ve chosen to include our children in our financial discussions for the following reasons.
1. To teach them how to live on a budget. Budgeting seems to be a lost art for most people. They just spend what they want without regards to whether or not they have the funds to cover their purchase. Because credit is so easily accessible via credit cards, many people live beyond their means because they spend their money on purchases that are not necessities and do not build their wealth.
2. To teach them why delayed gratification is important. One of the greatest lessons that I hope my children fully incorporate into their lives is that it is extremely important to make short-term sacrifices for the sake of their long-term lifestyles. Discussing the finances with them is a very straight forward way to show them how not spending money on certain items now means we will be in a better financial situation later.
3. To teach them the importance of saving. Someone once told me, “Save like you’ll live forever” and I’ve found that having a healthy savings account is the best thing I’ve ever done to reduce the stress in my life and my family’s lives. But not everyone lives that way. According to a 2011 study, “A majority, or 64%, of Americans don’t have enough cash on hand to handle a $1,000 emergency expense, according to a survey by the National Foundation for Credit Counseling, or NFCC, released on Wednesday.” (http://money.cnn.com/2011/08/10/pf/emergency_fund/) I want my children to understand how important it is to have savings to cover the unexpected costs that always arise in life.
4. To teach them the difference between appreciating assets and depreciating assets. We spend a lot of money on Goat Milk Stuff. And despite the fact that I don’t like debt, we have borrowed to build things. But we always stress to the children the difference between borrowing for an appreciating asset vs a depreciating asset. With the exception of the Beast (our leased GMS advertising vehicle), we drive two old vehicles – a 1994 pickup truck and a 2002 Sprinter. When these finally die, we have savings earmarked toward replacement vehicles. We will get the best used vehicle we can with the cash we have available. We don’t borrow to purchase vehicles.
5. To help them understand the significance of opportunity cost. Every dollar that we spend is a dollar that we couldn’t spend on something else. To continue with the car example, right now the air conditioning in the 2002 Sprinter is broken. And it is HOT outside. But we’ve made the decision not to put anymore money into that vehicle because it needs to be replaced. The children understand this decision and everyone has agreed to be sweaty instead of putting the money into it. Because they understand that if we spend the money fixing the air conditioning, than we don’t have that money to put toward the replacement vehicle. It’s an important concept for them to grasp.
6. To teach them how to communicate about finances. Money issues is often cited as one of the leading causes of divorce. I want my children to learn how to communicate about money now, so that they will understand how to communicate with their future spouses about money. With a family of ten, we don’t always agree on how our money should be spent. But we talk it out til we’ve reached a consensus that everyone can live with. That’s a really valuable skill to have going into a marriage.
7. To teach them to be a good steward and ultimately trust God with their finances. This is the biggest reason that we keep the children involved so intimately in the business finances. I’ve always said that God built Goat Milk Stuff. There have been so many times when he just supplied us with exactly what we needed at exactly the right time. One common reason I hear from parents who DON’T discuss the family finances with the children is because they don’t want to worry the children or stress them out. I believe that if you’re pointing the children (and yourself) toward the fact that God has promised to supply all of our needs (needs, not wants), then that is how you teach them not to stress out about money trouble in their future. When the business is struggling financially, we present it to the children in a way that causes them to rely more heavily on prayer and God than to be overly burdened. Hiding the finances never really works out well because if Mom and Dad are completely stressed out about money, don’t you think the children are aware there is a problem anyway?
So those are the major reasons we keep the children involved in the finances. How do you talk to your children about finances? If you don’t, I’d love to know why not.
