Raising an ER-smart kid


Short post today, but it’s building the foundation of raising a financially smart kid.

An earlier post talked about the challenges of retiring early when you’re still raising your kids.  That raises another question: How do you raise kids to value the early-retirement lifestyle? What kind of example does that make on their impressionable young minds? What will they do when they’re old enough to start working?

First, let’s back away from these questions for a few paragraphs. You’re reading this blog because you’re interested in financial independence, and perhaps you’re trying to decide whether to stick around for a military retirement. Yet very few of us spent our high-school days dreaming of financial independence, let alone retirement.  Back then we were excited about all the things we could do when we grew up. What changed?

Well, for starters, we did. We found out that growing up didn’t necessarily channel our unlimited potential straight to unlimited achievements and freedom. Maybe we enjoyed the military at first, but perhaps lately the fun balloon is starting to leak out a little air. Or maybe the military has been great but the prospect of a civilian career hasn’t been so compelling.

Perhaps we’ve learned that we enjoy our occupation when it’s autonomous, complex, and fulfilling. (See Malcolm Gladwell’s book “Outliers”.) For many military veterans, the most important aspect of those criteria may be having control over our own time. When you’re truly financially independent, you only have to work when you want to– on whatever you want to. You can retire on your own terms, or you can choose to keep working for those unlimited achievements you dreamed of when you were younger.

Now put yourself in your kid’s shoes: why should they value early retirement? They know darn little about work, and they certainly don’t know how it feels to be burned out by work yet trapped in the cycle of responsibilities or debts. Maybe they see that you’re tired of work, but they don’t know how to solve your problems. Early retirement has absolutely no context for them yet, and it probably won’t really hit them between their hard-working eyeballs until they’re at least in their 20s. When did you start thinking about early retirement? I doubt it was earlier than your 20s.

But what about financial independence? Every kid knows that money gives them choices. When they have money they may not be allowed to eat pizza for breakfast (yet), but they can get just about whatever they can afford at the toy store. They’re keenly aware of how they feel when they have to “choose” between doing their homework and cleaning their rooms. You don’t want to raise kids to a lifetime of money-grubbing penury, but you can certainly teach them that saving their money will someday give them lots of choices.

That’s what you tell your kids: When you were younger, you found work that you loved. You saved your money so that you’d have choices. When you got older, you decided that you wanted to do something else with the rest of your life– and because you’ve saved your money, you have choices. Maybe someday your kids will be fortunate enough to grow up to find their own work that they love doing for the rest of their lives. Until they do, their financial independence gives them choices.

In 10 or 20 years, they’ll look back on your lifestyle choices and understand how to figure out their own.

Once you finish with the important discussion of lifestyle philosophies, then you can relax and just spend more time having fun with your kids. That’s all they ever wanted in the first place!

The next post will suggest a few ways to make your kids smart about money choices. 

Related articles:
Retiring early– with kids?
Retirement: relax, reconnect and re-engage
I’m going to retire. Now what? (part 1 of 2)

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About Doug Nordman

Author of "The Military Guide to Financial Independence and Retirement" and co-author of "Raising Your Money-Savvy Family For Next Generation Financial Independence."
This entry was posted in Military Life & Family, Money Management & Personal Finance. Bookmark the permalink.

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