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Passing Your Wisdom To Your Children
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As i approach retirement I realise that i havent been very smart financially and i can see with all of my four children that this hasnt helped them to be prudent with their finances so far. They are all over 30 and I think it may be too late in some ways for them to change their mindset about preparing financially for the future.
I wanted to see if i could influence this by discussing my thoughts with them and ensure that they pass on the right message to their own children before its to late for the next generation of the family too.
Any suggestions as to how i should approach this?
I wanted to see if i could influence this by discussing my thoughts with them and ensure that they pass on the right message to their own children before its to late for the next generation of the family too.
Any suggestions as to how i should approach this?
Answers
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I would approach it by casually mentioning that you were thinking about what to do when you retire. This will hopefully create a conversation where you can drop in that you can’t to as much as you’d hoped due to financial considerations. This will, again, hopefully get them thinking. You can then drop in comments like ‘I wish I’d invested more’ etc.
This might go down better than being preached to. ‘Children’ rarely follow the advice of their parents.
This might go down better than being preached to. ‘Children’ rarely follow the advice of their parents.
Hi Quoi,
I can only tell you how I prepared my children. I started them with saving accounts, I never indulged them giving in to demands for this and that. I taught them if they really wanted something they had to save for it, nothing should be given easily on a plate, they don't grow up to value independence and working towards a goal otherwise.
I can only tell you how I prepared my children. I started them with saving accounts, I never indulged them giving in to demands for this and that. I taught them if they really wanted something they had to save for it, nothing should be given easily on a plate, they don't grow up to value independence and working towards a goal otherwise.
This is a very difficult one.
By your own admission you have not been good financially so giving advice to others could be difficult, particularly your own children.
Also the children may resent it, perhaps them feeling that you are suggesting they are having (or are going to have) problems.
Sadly some people are good with money, others bad with money.
I have two children from my first marriage, and both now about 40 years of age (one a bit under 40, the other a bit over 40).
One has always been good with money, rarely going in debt, always finding the best deals on credit cards and banks, getting good mortgages etc.
The other has always been bad with money, Even when he was 18 he took out a loan to buy a car, wrote the car off fairly quickly, then spent the next few years paying for a car he no longer had.
He is always in debt and maxed out on his credit card, he gambles so wastes money that way. He married lady who was also bad with money so they are both always overdrawn at the bank and maxed out on their credit cards.
Both my sons got left a LOT of money when a relative died (a few hundred thousand).
The sensible one put it in a house and now owns a house worth about £500,000.
The other one bought a run down house, spent a fortune doing it up and sold it at a loss (because he needed the money).
He then bought a second house, spent another fortune doing that up and sold it at a loss (he says he made a profit on it but I think he is deluding himself how much he actually spent on it).
He and his wife are now living in a rented house costing him over £1000 a month.
He has started a number of business over the last few years that have all gone under.
He now runs another business where he had to spend thousands for stock and while he is now bringing in money he is having to undercut people just to get the work.
He has a few large bills to pay (VAT bill, tax bill) and I suspect this business will go under.
My other son (the sensible one) worries that his brother and his wife and two children will turn up on his doorstep with their suitcases saying they have run out of money.
So while you can pass on advice, some people are good with money, some not.
By your own admission you have not been good financially so giving advice to others could be difficult, particularly your own children.
Also the children may resent it, perhaps them feeling that you are suggesting they are having (or are going to have) problems.
Sadly some people are good with money, others bad with money.
I have two children from my first marriage, and both now about 40 years of age (one a bit under 40, the other a bit over 40).
One has always been good with money, rarely going in debt, always finding the best deals on credit cards and banks, getting good mortgages etc.
The other has always been bad with money, Even when he was 18 he took out a loan to buy a car, wrote the car off fairly quickly, then spent the next few years paying for a car he no longer had.
He is always in debt and maxed out on his credit card, he gambles so wastes money that way. He married lady who was also bad with money so they are both always overdrawn at the bank and maxed out on their credit cards.
Both my sons got left a LOT of money when a relative died (a few hundred thousand).
The sensible one put it in a house and now owns a house worth about £500,000.
The other one bought a run down house, spent a fortune doing it up and sold it at a loss (because he needed the money).
He then bought a second house, spent another fortune doing that up and sold it at a loss (he says he made a profit on it but I think he is deluding himself how much he actually spent on it).
He and his wife are now living in a rented house costing him over £1000 a month.
He has started a number of business over the last few years that have all gone under.
He now runs another business where he had to spend thousands for stock and while he is now bringing in money he is having to undercut people just to get the work.
He has a few large bills to pay (VAT bill, tax bill) and I suspect this business will go under.
My other son (the sensible one) worries that his brother and his wife and two children will turn up on his doorstep with their suitcases saying they have run out of money.
So while you can pass on advice, some people are good with money, some not.
I started my children from birth. Any money they got or earned they had to put away half not to touch and spend half on whatever they liked. Sometimes they spent the half on absolute rubbish but i learnt to bute my tongue and not often and if they really wanted something they learnt to save for it. They were given the money at 18 which was a tidy sum by then and they were very grateful.
As soon as my OH got a job at 16 his mother arranged his pension.
My parents weren't so savvy but Mum was always careful with money. There just wasn't much left over to save. We were brought up to be very aware of the cost of things. I hope that's something I've passed on to my kids. They have no debts....so that's a start
My parents weren't so savvy but Mum was always careful with money. There just wasn't much left over to save. We were brought up to be very aware of the cost of things. I hope that's something I've passed on to my kids. They have no debts....so that's a start
As they were growing up ummmm we had a nice house and the money was there and I didnt really talk to them as much as I could have done - my mistake.
When times were good I didnt think too much about the future - even though I took out a pension when I was 26 - I stopped paying into it when I went self employed a few years later - always thinking I will pay in a lump sum but having 4 kids stops that and time flies as they say.
Now I can see all the places where i SHOULD have done something & just didnt want them or their children to be in the same position.
They all currently have work pension of some sort but only one has his own house with a huge mortgage.
The others dont really look like saving a deposit for a house even though they all could.
When times were good I didnt think too much about the future - even though I took out a pension when I was 26 - I stopped paying into it when I went self employed a few years later - always thinking I will pay in a lump sum but having 4 kids stops that and time flies as they say.
Now I can see all the places where i SHOULD have done something & just didnt want them or their children to be in the same position.
They all currently have work pension of some sort but only one has his own house with a huge mortgage.
The others dont really look like saving a deposit for a house even though they all could.
I think the important things to point out to them are:
1) If you don't buy a house you will be paying rent for the rest of your life. I paid off my mortgage when I was 53 (I am now 68) so I have paid no rent or mortgage for the last 15 years. In fact with my pension I have more money now than when was working.
2) When they reach retirement age the state pension will be very small. I get about £500 a month state pension, luckily my company pension is over £2000 a month on top of that.
Also the age you get the state pension is going UP. It will go up to 68 for some people and could well rise higher in the future. Unless they are prepared to work until they are 68 then they will need some sort of personal pension to tide them over between when they cant or wont get a job and they get state pension.
3) All loans (apart for a house / flat) are bad. The rule is borrow money for things that go UP in value (like a house), don't borrow money for things that go down in value (like a car).
4) Don't use you credit card to live on, only use it for things you can afford to pay off in a month or so (I always pay my credit card off each month).
The interest on credit cards is VERY high, and if you don't pay it off you then get more interest added the next month so in the end you are paying interest on the interest on the interest etc. a terrible way to borrow money.
5) While the interest rates are not high, do check what interest rates you get on things like ISAs etc. After a year or so the ISA interest rate will often plunge to almost nothing.
Check the interest rate and if it is very low then move it to a new ISA (even at the same bank). This is usually VERY easy to do.
6) Consider a bank that gives you money back on your current account. I have a Santander 123 account and as long as I keep £20,000 in it and pay my direct debits through it I get about £40 a month from Santander, far more than if I had it in an ISA.
These are just a few basic suggestions.
1) If you don't buy a house you will be paying rent for the rest of your life. I paid off my mortgage when I was 53 (I am now 68) so I have paid no rent or mortgage for the last 15 years. In fact with my pension I have more money now than when was working.
2) When they reach retirement age the state pension will be very small. I get about £500 a month state pension, luckily my company pension is over £2000 a month on top of that.
Also the age you get the state pension is going UP. It will go up to 68 for some people and could well rise higher in the future. Unless they are prepared to work until they are 68 then they will need some sort of personal pension to tide them over between when they cant or wont get a job and they get state pension.
3) All loans (apart for a house / flat) are bad. The rule is borrow money for things that go UP in value (like a house), don't borrow money for things that go down in value (like a car).
4) Don't use you credit card to live on, only use it for things you can afford to pay off in a month or so (I always pay my credit card off each month).
The interest on credit cards is VERY high, and if you don't pay it off you then get more interest added the next month so in the end you are paying interest on the interest on the interest etc. a terrible way to borrow money.
5) While the interest rates are not high, do check what interest rates you get on things like ISAs etc. After a year or so the ISA interest rate will often plunge to almost nothing.
Check the interest rate and if it is very low then move it to a new ISA (even at the same bank). This is usually VERY easy to do.
6) Consider a bank that gives you money back on your current account. I have a Santander 123 account and as long as I keep £20,000 in it and pay my direct debits through it I get about £40 a month from Santander, far more than if I had it in an ISA.
These are just a few basic suggestions.
Thanks Guillbert - thats great.
All those things everyone SHOULD know but dont live by - not just my kids would benefit from applying those rules.
Its true about the state pension - it is not an amount to rely on at all.
Thats made me feel better about when I contracted out from it - that looks like a mistake of mine too.
All those things everyone SHOULD know but dont live by - not just my kids would benefit from applying those rules.
Its true about the state pension - it is not an amount to rely on at all.
Thats made me feel better about when I contracted out from it - that looks like a mistake of mine too.
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My two have very differing attitudes to investing and the future. Eldest who is married with two children at University, thinks about the future and she and her husband will (I think) be quite well off in retirement. Her younger brother has a "live for today" attitude. Never seems to be able save even though he and his wife both work. However, they and their two children have a wonderful life. Tomorrow will take care of itself seems to be their motto.
jesus some good advice from the usual suspects
I think I might print out Guilbert's
umm's mother is remarkable - opening a pension at 16.
I have always been generous with advice
and been rewarded with AB style crushing put downs like
' So YOU say' and 'whatteveeeeer' - and even a
'pension ? what dat den!'
one acqaintance spent a house deposit on nights out
I had one relation say - we didnt open a pension for X we thought it would be better to take X for days out wiv da money
so good luck
anyway isnt being good wiv money time sensitive ? what you wish you had done may not work in the future ?
I think I might print out Guilbert's
umm's mother is remarkable - opening a pension at 16.
I have always been generous with advice
and been rewarded with AB style crushing put downs like
' So YOU say' and 'whatteveeeeer' - and even a
'pension ? what dat den!'
one acqaintance spent a house deposit on nights out
I had one relation say - we didnt open a pension for X we thought it would be better to take X for days out wiv da money
so good luck
anyway isnt being good wiv money time sensitive ? what you wish you had done may not work in the future ?
ooh did guildbert say - maximise your work place pension ?
Todays good news is that the "race to the bottom" in pensions has been stopped ( yes er what dat den?)
Work place pensions NEST was as low as 2% wivva n emplooyer cont of 2% and since that gives peanuts as a pension - it is being increased to 3% from April
Employer cont being 3%
My pension cont was 14% - you can probably guess which industry oh yeah and the pension isnt bad.
Todays good news is that the "race to the bottom" in pensions has been stopped ( yes er what dat den?)
Work place pensions NEST was as low as 2% wivva n emplooyer cont of 2% and since that gives peanuts as a pension - it is being increased to 3% from April
Employer cont being 3%
My pension cont was 14% - you can probably guess which industry oh yeah and the pension isnt bad.
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