How I Teach My Kids About Money and Life By Using Bricks

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photo credit: dewfall

JD at Get Rich Slowly posted that small changes are the building blocks of financial success. I couldn’t agree more. The little blocks that make up every decision we make are what constructs our lives, financial, spiritual, emotional, psychological, occupational, and every other “—tional” you can think of.

Just like a building is built brick by brick, so are our lives. I frequently show a very large brick wall to my kids, telling them that every decision they make is like a brick in the wall of their lives. Good decisions put a brick in place, bad ones pull it back out. Pulling a few bricks here and there doesn’t crumble the wall, though it is noticeable. But pull out too many and the wall crumbles and you have to start all over.

It works to motivate them scholastically as well. I’ve shown them that large brick wall and asked, “What would happen if I pulled out this one right here because you didn’t study for a test?” I’ll point to a random brick. They initially said, “The wall would fall down.” When I pointed out that it wouldn’t (by using Legos, of all things), they began to understand the importance of each test and each course for constructing a well made wall. Pulling out one brick may weaken the wall, but it doesn’t crumble. It does, however, draw your eye to the area where that one brick is missing.

What bricks are missing in your financial life?

Is it your budget? A budget is a very important brick, but plenty of people don’t really use a formalized budget and their financial life clicks along just fine. A budget can be a strong aspect of your financial life, but it isn’t THE most important brick in your wall.

Maybe your missing brick is self control over spending in a certain area (I have a weakness for fine food and lattes). I can still become a success, but that brick is missing. Maybe your weakness is electronic gadgets, or vehicles. Those in and of themselves won’t keep you from enjoying a success life financially, but that missing brick is glaring!

I’ve known people whose missing brick was patience. They were always seeking another opportunity to make a quick buck. The quicker the better. Like the other bricks, this one by itself won’t cause your brick wall to crumble, but combined with other missing bricks could cause your financial tower to take a lot longer to construct.

Your missing brick could be poor habits, chasing investments, an unwillingness to learn, a need for greater education, consumer debt, or falling for scams. Maybe you’ve used bad business methods or have had a problem with carelessness or conceit or procrastination. None of these missing bricks *alone* will cause your financial house to crumble, but when many bricks are pulled from the walls, look out.

Building blocks for a sound financial life:

• Learn to recognize good opportunities as well as scams.
• Get a solid education in a field that holds your interest.
• Take advantage of conservative (boring?) investments through your employer.
• Open other investment accounts and save a consistent percentage of your income.
• Avoid “hot” stock tips, “hot” mutual fund tips, “hot” investment tips in general.
• Learn to value conservative investment vehicles that have good, long term track records.
• Learn to recognize investment trends (bubbles are bad).
• Always, always be teachable. No one person knows it all.
• Seek to generate alternative income streams.
• Replace your vices with activities that either generate income or that cost very little.
• Make decisions quickly once you have all the needed information.
• Avoid consumer debt.
• Insure the important things in your life…those that generate income, prevent loss, or that, if lost or damaged, would result in you taking an extended leave of absence from work.

You only have so much time to construct your building. Make sure you don’t weaken it through bad habits, poor planning, unnecessary vices, spending sprees, or any other “little thing” that tempts you.

If you have weakened your structure, there’s good news. You can always start over. Some of those good bricks can be used again and you CAN rebuild without the gaps in your new wall. Don’t ever think you can’t start over. The world is full of successful people whose brick wall crumbled but they made it to the top anyway.

NOTE: This post was included in The Carnival of Personal Finance 159 at Greener Pastures: Personal Finance. Thanks!

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