Like any responsible parent, I try to teach my kids the value of a dollar. I want them to understand the importance of hard work and the fact that things cost money. I want them to understand that sometimes when you want something today, it might affect what you can buy or afford in the future.
To that end, my wife and I have always employed what we call the "bucket metaphor." From the day our kids were born, we put money into a (metaphorical) bucket for them. Over the course of their lives, we've been very diligent in "filling" this bucket.
My oldest son is now a 17-year-old high-school junior. He's looking at colleges, has a car and has gone to summer camp for 11 years. He's been very fortunate to be able to do everything he's wanted to do up to this point. However, we recently sat down and I explained to him that the rate that money is coming out of his bucket is now higher than the rate that it's going in.
Now, we've done a good job over the years of investing the money, and it's grown steadily to this point. But it's time for some hard choices, because once my son's bucket is empty, it'll be turned over and he'll be on his own. My 17-year-old wants to possibly go out of state for college. That tuition is almost double in-state. I've told him that you can borrow for education, but not for retirement.
My 14-year-old daughter also has been fortunate. She's gone to camp as well and has gotten to do pretty much whatever she wants to this point. She seems to be aware of the value of money and often asks me if I think something is expensive or not.
She's heard the bucket metaphor many times, but still asks for Lululemon clothes quite often. Sometimes if she wants something, she'll ask if I can pay for it or if the item has to come from her bucket. She wants to go to an in-state college, so out-of-state tuition isn't a concern.
Lastly, there's our 10-year-old boy. So far, he doesn't seem to have expensive tastes. He's a typical boy in that he loves playing sports and is happy to wear sports jerseys to school every day. He's not a camper, but he does like his shoes. That can turn into an expensive habit, so he's also started to learn about the bucket metaphor as well.
My wife appreciates the effort we put into educating our kids about the value of money. However, she's sometimes said to me: "They don't care about the bucket or choices today," or "They're teenagers," or "They want their clothes, shoes or trips."
Maybe I need to rebalance my effort to teach them about money and metaphors. I'm not sure. But I grew up in a home where my dad taught me early and often about the importance of saving money and not overspending. In fact, that's one of the reasons that I gravitated to the financial-advisory business.
I also want my kids to understand the importance of money -- and how the way that they handle it can greatly affect their futures.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Mark Bordelove's securities and advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC. Mark Bordelove and LPL Financial are not affiliated with Jim Cramer or TheStreet.com.