10 Cruel Lies That Will Crush Your Kids Financial Future

(8 minute read)

“Things come apart so easily when they have been held together with lies.” ― Dorthy Allison

With each passing generation, Post WWII Americans are raising more pathetic money managers. Most Americans main goal for their child’s future seems to be, “I want my kids to have it better than I did.” The translation being, “I want my kids to have more material prosperity than I did; a bigger house, nicer car, more stuff.” This is a disturbing goal on its own. What’s more, they are being taught to get more no matter how much debt they have to amass.

Rather than equip children to be independent, we enslave them to debt for life.

In part we pass our despicable financial skills through these 10 cruel lies that will crush their financial future:

  1. You can have any career you want. This is a lie for at least three reasons. First, we all have unique physical and mental characteristics. These traits lend themselves toward some careers while eliminating others. You can want to be a fighter pilot with all your heart but if you stand 6’8” you can forget it, no matter how hard you try. For many of us our limitations, passions, and talents don’t jive in real life. We need to think more practical when it comes to career choices. Talk about ways you can fulfill your passion and use your talents outside of a career. Talk about career options, college degrees and their marketability. Second, circumstances beyond the control of any individual affect careers. Economic, social, and political factors determine the opportunities for certain careers to name a few. Discuss the consequences of different career choices. Where will they require you to locate? Is there versatility in location options? What are the expected income levels? Is there physical labor required? What number of jobs are available in this field? Is a student loan for a given degree a good financial decision?
  2. You can have it all. No you cannot have it all; sorry. Every career choice demands sacrifice. You cannot have a stellar career as an oceanographer if you are not willing to sacrifice living with your friends and family in Kansas. It is critical to show the cost of a particular career. Not only in financial terms, but with regard to family, stress levels, travel and health. Someone is always willing to sacrifice more than you to get ahead in a job. Set your priorities firm ahead of time to avoid sacrificing more than you intended.
  3. Math doesn’t matter. Statistics often show Americans lacking in math skills relative to other developed nations. I am forever skeptical about the validity of such studies. But, it would seem the area we are least apt to apply any math skills is finance. We tend to think of wants more than numbers. We look at the monthly payment and ask can we afford the payment. What we should be asking is can we pay for this outright. If you find yourself pondering monthly payments on a depreciating product rather than do I have the money to buy it, you need to change your thinking. Consider a mortgage. Sit at the kitchen table together with your kids and look over your mortgage. Calculate the percent of your monthly income your mortgage amounts to. Calculate how long it will take you to pay it off if you make only the monthly payment. Show them how much interest you will have paid by the end. Emphasize this is the true cost of the house. Now reflect on the value of the house if you were to sell it. Compare the two numbers. Show them the difference in these numbers for a 15 year vs a 30 year mortgage. Do you want to blow their minds, and make yourself cringe? Take the difference in interest paid on the 30 versus the 15 year and instead invest this money at 3% interest. Show them how much money you could have in the bank and own the house with this one simple change.

Here are a few more math concepts that matter:

compound interest

loss of opportunity costs


capital and


Make these are clear in their minds. Math matters. More than your score on a standardized test, math matters when it comes to financial management.

“Making what you want equal what you can pay for is good math, and the foundation of good financial management.” –Jamie Cearley PhD

  1. You can live here for free. Teach kids early that you don’t live anywhere for free. Instill this valuable lesson through the avenue of age appropriate chores. It can be a challenge for a child today to transition to financial independence. Yet, prior and proper preparation can go a long way to making this rocky transition smooth. There are more adult children living with their parents today in America than ever before; many of them for free. Living anywhere for free is not teaching the realities of life. The longer a person lives for free the more difficult a transition to reality becomes.
  2. Property value will always go up. Having put ourselves under our first mortgage in 1999 and our last in 2008, before the real estate bubble popped, this one rings loud and clear. No two words are crueler in the English language than always and never. While it is true a house can bring financial returns, be cautious in considering your house as an investment. Depending on the current market status your house may not be a liquid asset by any definition. Besides, with any luck you will be healthy enough to live in your house for a long time.
  3. You will make more money as time goes on. Like housing value one hopes this will be the case. But sorry, the grim reaper strikes again. Even if your income does manage to go up, watch out, there are plenty of hands out to grab your hard earned money. Sometimes reapers come in the form of health insurance. In 2006 we paid $0 out of pocket for coverage and had a $300 deductible. Now in 2017 we pay $10,000 for coverage and have a $6000 deductible. There goes that big raise we never got. Then there can be literal hands grabbing for your money. Those little cute noisy hands called babies can create quite a financial demand.

“Someone or something is always out to get your money. Don’t fall into the mindset of thinking that says, “We will have more money later.” Later never comes.” -Jamie Cearley, PhD

  1. Be spontaneous. Compulsive purchases  are almost always a poor decision. Do not make major purchases without sleeping on them first. The most foolish financial mistakes I have made were a direct result of not following this rule. Pressure sales tactics where you have to buy now are nothing short of scams. If it isn’t still for sale tomorrow forget it.
  2. If you mess up young, no worries, it is easy to recover. Get a job. Consumer debt and poverty are two of the most difficult life situations to get out of. Debt is the cancer of finance. It continues to grow and metastasize to every facet of your life. Point out to your kids where businesses like title loan, pawn shops, and check cashing services do business. Why are they always in depressed areas? Explain to your sons and daughters about women and poverty. How do they get there? Why can they not seem to get out? It is far more complex than getting a job. Raise awareness of how early decisions have long term financial consequences. If you have amassed debt, take the time to show your children how those early decisions contributed to your current situation. Show them how you can indeed dig a hole you may never get out of before you are 25.
  3. You don’t need a budget. Set a budget for yourself and your children. Rather than handing out cash, giving them a debit card to your account, or even worse a credit card, set up a personal account of their own. As I was getting ready to leave for college my mother and I sat down and made a list of all the essentials I would be needing. We then went to the store and priced each of these items and came up with a cost of $100 per month. When we arrived at the school location about 400 miles away from home we set up a checking account at a nearby bank. Each month my parents would deposit $100 into the checking account. The rest was up to me. Needless to say there was elation when once each semester my Gram would send $5 in the mail with a note saying, “Go and get yourself a hamburger.” I know parents who keep track of their child’s account balance and deposit money when the balance is low. The kid writes checks and swipes their debit card with no regard for the balance on the account. It is as if the account were a bottomless pit of gold. Little could be further from reality than this practice.
  4.  Sweat equity is not real equity. On our farm we get 500 or more bales of hay delivered each summer. Each year the arduous task of unloading the hay from the trailer and stacking it under our lean to rears its ugly head. We always joke with our hay provider about who has managed to sway some poor souls into helping each year. Every year it seems the prospects dwindle. If you ever want to lose a friend or convince someone to never speak to you again, have them haul hay for you. It is given they will be forever wiped from the screen of your life. One year I had cleared with a strapping young man to come and help on the agreement we would give him $100 for what would amount to about two to three hours work. He said yes. I was thrilled. I called him one afternoon to tell him the hay was being delivered in the evening. He said he could not come. He and two buddies had made plans to go to a movie. Being me, I thought what an excellent opportunity for me to gain extra help surefire. I said, “Great, bring your two buddies and we will give all three of you $100 each and you can go to the movies every weekend for the rest of the summer.” He said no. I was speechless. Either he was incapable of doing the math or money was coming his way far too easy.

For the next generation to have it better than the last we need to make some changes when it comes to money management. We need to develop good stewards of money and material things. Maintain a healthy focus on what matters in life. Learn how to make money an outstanding slave lest it become a terrible master. Set your kids up for financial freedom. Stop them from believing the lies.

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