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I immigrated to the United States when I was six years old. For the first three years of my American life, my parents and I lived on my dad’s tiny PhD student stipend. I subsisted on secondhand clothes and free lunch coupons at school.
I watched my mom, who graduated from a top university in China, clean the house of one of my classmates because my mom’s degree didn’t translate into the US system. Even after my dad got a full-time job, we lived a budget-conscious life with coupon-clipping, homecooked meals, and clothes from Ross Dress for Less and Marshall’s.
The funny thing is, I never thought of life at the time as deprived or unfortunate. Sure, I wanted multiple Barbies (I had two) and Oscar Meyer Lunchables (I made my own sandwiches at home), but I don’t remember feeling upset.
Probably because I was a lonely child with few friends who preferred her books to socialize. Besides, I spent many summers in China with family, where the USD went much farther at the time (there was a $ 1 USD to 8 RMB exchange rate). So, I arbitraged the exchange rate by doing most of my clothes and book shopping in China.
As a result, I never really felt deprived; I was just happy that I got what I wanted at a lower price. Today, I reminisce about my own financial education and how my husband and I want to approach our children’s financial education.
How My Parents Instilled Monetary Values
My mom was always on the lookout for deals, and I became responsible for coupon-clipping for groceries every week. I thought it was fun to “game the system” in my mind, by buying something for a lower price than advertised.
I developed the habit of only buying clothes on sale or at discount stores because that’s the only thing I knew from my parents. My parents also always paid their credit cards on time, so I was shocked when I met people in college who had credit card debt from shopping expeditions. Surely, nothing was so desirable that it was worth getting into credit card debt for.
I also knew my parents’ salaries, the price of the house we had purchased, the down payment amount, and the monthly mortgage payments. My parents didn’t make a point to tell me these details, but they would talk about these topics in front of me, so I was exposed to them. I never got an allowance, because my parents thought that any cleaning, laundry, cooking, and help with household chores was implicit in my role as a member of the household. At the same time, they did buy me what I needed within reason, and I don’t think I ever asked for anything lavish.
They certainly did not pay me for getting straight A’s (which I got anyway). When I wanted to participate in a local beauty pageant, they told me to earn the registration fee by asking local businesses for sponsorship. It’s good practice to work for what you want, they said.
To this day, my parents are not big spenders despite having significantly improved financial circumstances.
They don’t see the money they have as money they can spend at will, but rather a resource to be preserved and grown responsibly over time for the family. Most importantly, my parents do not let money control their lives – they treat money as what it is, a tool.
What I Realized After Going To College
When I left the proverbial nest for college, I was a financially responsible person. I didn’t get into credit card debt, always stayed within my budget, and thought $50 in 2003 was a lot to spend on shoes.
But I was incredibly naïve about finances other than staying within budget and paying off credit cards.
I didn’t know anything about Roth IRAs, investments, or compound interest. I stayed out of financial trouble, but I didn’t learn about finances. It didn’t help that my liberal arts university, which starts with an H, didn’t have any courses on finance — students wanting to learn accounting had to register down the street at MIT.
And while I didn’t learn how to grow or earn money more effectively, my eyes were opened to the possibilities of spending more money as I socialized with classmates whose parents had unfathomable [to me] wealth.
I developed a taste for $4 chocolate truffles and $100 shoes. Yes, I still stayed within my budget, but I started to feel a bit resentful at my limited means. Over time, the jobs that I pursued out of interest rewarded me with relatively little income. I didn’t start a 401 (k) and Roth IRA until I was 27 years old, at my first “big girl” job that offered these benefits.
Learning My Money Lessons As An Adult
While working that first “big girl” job as a professional fundraiser for nonprofits, I had the good fortune to encounter two people who changed my thinking about money and its role in my life.
Coincidentally, both were older Jewish men in finance. The first was a gentleman who opened a family office next door to my company’s office – he had made his millions as a money manager and started to manage other families’ fortunes.
At a happy hour during which all my young colleagues ignored the septuagenarian and socialized with their same-age peers, I learned his life story and got my first lesson in compound interest.
Before I reached my 30s, I was frequently drawn to talking to older people because I felt like an old soul for my age — even if you’re not an old soul, I strongly recommend gravitating towards older people for their wisdom and insight (our society overvalues the young but callow these days).
Thereafter, I visited his family office regularly and learned about his investment strategy (picking under-valued SME stocks by doing proprietary research rather than purchasing them from an investment bank). I grew to deeply appreciate him for his humility, acuity, and insight. I felt that despite our differences, we shared similar values around family and money.
While I didn’t love my job, I loved the people I met while working on different projects. My then boss advocated for me to take on the firm’s biggest client up to that point: Stephen A. Schwarzman, co-founder of The Blackstone Group, committed $100 million to founding the Schwarzman Scholars at Tsinghua University, a graduate college and program at the MIT of China.
My colleagues and I were tasked with helping Steve raise an additional $100 million in six months (yes, we accomplished our goal). Being around Steve was eye-opening in many ways, but it was meeting Byron Wien, then vice chairman of private wealth solutions at Blackstone, that really changed my perspective.
I worked at a desk next to Byron’s assistant, and he would say hello to this little peon every time he walked by. One day, he suggested scheduling lunch together, and I was thrilled. Thank goodness at the time, I didn’t know how revered he was among banking and finance titans, otherwise, my legs would have turned to jelly. I learned that Byron was a poor Jewish kid from Chicago who lost his parents early and really enjoyed learning.
He got into Harvard on scholarship at a time when there was significant racism against Jews in higher education and did his MBA at Harvard Business School. What I found fascinating about Byron was his relatively simple outlook on career – “do what you’re interested in.” He admitted that he kind of just fell into his finance career and didn’t expect it to turn out “this way”.
“This way” was the premier financial soothsayer of his generation, and wealthy to boot. He wore his wealth and success easily, and I never felt that he looked down on me, a random young woman who happened to be working in his office.
He taught me that success, both professional and financial, didn’t necessarily make someone haughty or dismissive or have a chip on their shoulder. Byron had a healthy relationship with his success and money and wore it lightly and easily.
If you weren’t in finance, you wouldn’t recognize Byron on the street, and plenty of people who were less rich lived a flashier life, and who were richer than he was dumber and not as successful.
I learned from Byron that wealth isn’t just the end goal, it’s the beginning and indeed just a tool in a person’s journey in life.
By the way, that first Jewish gentleman whose office was next door to mine? Our family has a large chunk of our wealth invested in his family office, which is now run by his successor and son.
He and his father have provided critical investment and wealth management insight as our fiduciaries, and every piece of advice they have provided has proven to be correct in hindsight (even if we didn’t take their advice in the first place).
After learning about investment and personal finance in my late 20s from my mentors, I realized that my parents, as fiscally responsible as they were, had failed to teach me some critical financial literacy.
I knew how to not spend money, but I didn’t know how to grow it. Friends were opening their Roth IRA during college, and I didn’t start one until nearly a decade later. The lost compound interest still bugs me. I didn’t know anything about index funds or how to evaluate private investments until my early 30s.
I know it’s not my parents’ fault, since they didn’t have backgrounds in finance. And as immigrants to the United States, had a lot of other things to worry about, but I think it’s important to draw the line between saving money and growing money.
They are not the same thing, and often, children of immigrants and doctors are very good at saving money but don’t know how to grow their funds.
How I Plan To Approach Money With My Kids
As I near 40, I marvel at the sheer rapidity and intensity with which my family finances have changed (due to exceptional circumstances). I have been unceremoniously shoved into a role of managing my family’s assets in a way that I would never have imagined.
I’ve had to learn on the job, and I still lack self-esteem because I do not have a finance background. As the mother of two young children, I have started to think about the relationship I want them to have with money.
They started out life with every comfort and luxury we never had. They will never know what it’s like to be on free lunch, to only eat pizza when they got enough Pizza Hut points from reading books at school.
My husband and I are still discussing how we plan to approach money and finances with them, but I know the following to be true:
Firstly, I want them to learn about personal finance and the financial sector early on. What is a stock? What is a checking vs. savings account? What are a 401k and Roth IRA? How do you balance a budget? What is a hedge fund, private equity, or venture capital?
I want to be transparent about our financial situation and not make a big deal about it. I do not want to guilt trip them “because when I was little, I didn’t have all that,” but they must also realize that they are incredibly privileged and, in turn, have a responsibility to society.
Financial boundaries for the kids will be informed by my and my husband’s personal values. I do not personally believe in an allowance. You fold your own clothes, help with household tasks, and walk the dog because we are a family, and you are a responsible member of it.
You don’t get paid to do what is expected of everyone in the family. I will not reward their good grades with money because if they get good grades, it’s because they worked hard themselves and not because I bribed them to work hard.
Wealth is not simply the accumulation of money. Generational wealth is the accumulation of financial, cultural, and spiritual wisdom and knowledge that serves the family’s ability to do good in this world. You can be wealthy in cash but poor in spirit, and I would consider myself a failed parent if that were the kind of person my children become.
I want my kids to treat our family wealth not as their own but rather as a tool and resource to safeguard for future generations and for our society. How can we grow our assets in a responsible, steady way and use the gains to not merely fund our lifestyle but also important causes that our family members believe in?
I am working towards their active involvement in the management of our family wealth rather than as passive recipients.
I want to teach my kids to be humble about their own knowledge and about the shallowness of youth. I want them to learn from those who are older, wiser, and more experienced, and make genuine connections that can serve them in the way that my own connections have helped me.
Like myself, I want to make sure that they find partners in life who share similar values and attitudes about money and fiscal responsibility because a wrong choice in that regard can really break or make a person’s life.
I feel fortunate to have had a solid grounding in fiscal responsibility from my parents, and a set of values that allows me to treat money as a tool, rather than let it control me. I also feel fortunate to have encountered wise men in my professional life who have guided a blind person (me) into the light.
I leave you with this word of advice: at the heart of financial success is not money. It is the ability of the individual to know how to use money, rather than let money use them.
2 thoughts on “Save, Grow, Value: Lessons for Children’s Financial Literacy”
I appreciate you sharing your experience–I am the mom to a 2 year old and at this point we emphasize that we (me, my husband, my son) are a ‘team’ in all that we do–I know allowance decisions will be down the road at this point, but I also appreciate that it will be okay if we don’t go that route and continue to emphasize that the duties that all of us do contribute to our team’s success. We have a lot to be grateful for and I, too, wish to pass that sentiment down to him.
Thank you for the comment! I do like to think of our kids as a team with us – I understand why some parents may not want their kids to know how much money the family has (or how little), but kids are perceptive and long term consequences are always felt when there is secretiveness involved. Every family has their own approach – I was never raised with an allowance and so I’ve continued to adopt that mindset. But people who were raised with allowances and feel like it’s appropriate for them will make a different decision!