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  • Writer's pictureZachP

#26. The Best Gift To Give Your Children


Try to picture both of these scenarios from the child's perspective.


Scenario 1: You grow up getting a lot of material things. You always have at least ten presents to unwrap on Christmas and an inflatable castle on your birthdays. Your parents buy you your first car at 17. Life as you see it is amazing.


Fast forward thirty years. You are now 47 years old. You are married, have a stable job, and have built up a sizeable nest egg to use in retirement. You plan to retire on your 55th birthday.


However, when you are 49 years old, the unthinkable happens and your mother passes away. You start to help your dad with getting his estate in order and figuring out his finances, and you realize he has no money saved up for retirement. Your mother had been working and this extra income kept them afloat.


Your dad ends up moving in with you and you are eventually forced to dig into your nest egg fund to pay for his needed long-term care costs out of pocket because you want him to get the best care for his health while aging.


Because of this, you have to push your retirement back to 65 years old.


Scenario 2: You grow up understanding the value of money and what it is and what it isn't. You are taught that money is just a tool to allow you to do more of what you want. You are taught delayed gratification and value every dollar because you know what they can grow into.


You still enjoy Christmases and birthdays, although you may only have a present or two to unwrap. When buying your first car, your parents only pay for half and force you to come up with the other half. You start investing into a Roth IRA as soon as you get your first job.


Again, fast forward thirty years, and you are 47 years old. Like above, you are married, have a stable job, and have built up a sizeable nest egg to use in retirement. You also plan to retire on your 55th birthday.


At 50 years old, your mother passes away. You start to help your father get his affairs in order and figure out what bills your mother were paying monthly. You find out that your father has a sizeable nest egg as well that will pay for him to have a comfortable lifestyle until death.


When your father passes away, he had spent his investments and there is minimal dollars to inherit. However, you never had to spend a dollar taking care of your father (other than any birthday and Christmas presents), and you are still able to retire as planned on your 55th birthday.


The Issue


It is difficult to do what is best for your children at times, and a lot of it has to do with wanting to see their huge smiles when you buy them their first car or buy that $500 toy they really wanted for Christmas. Doing what is best for your children is often met with frowns or the occasional, "I hate you!"


I only have a toddler at home, so I have not had to deal with the teenage years yet. I am sure I will cave some on spending money on my children that I should be investing, but knowing that they will not have to take care of their parents financially later in life should hopefully limit this spending.


At a young age, you may have to explain to your child why Santa brings little Johnny down the street many more presents than you. Taking the easy way out and just trying to match what Santa is bringing little Johnny is not best for their future. It will be better for you and your children to have these difficult talks.


The Best Gift To Give Your Children


Hopefully from what you can see from the above scenarios, the best gift to give your children is not money, an inheritance, or material things.


The best gift to give your children is them not being forced to take care of you financially later in life. They may never realize the value of this gift, but the joy they will have just being able to spend time with you because they want to is worth it. If you couple this gift with love and proper financial literacy, you have done all you can to set your children up for success.


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