Updated on 05.21.11

Personal Finance and Being a Parent

Trent Hamm

Yesterday, my oldest son (who is about to start kindergarten in the fall) and I were looking at his portfolio from his two years of preschool work. His teachers collected quite a few of his art projects, photographs of his activities, and other materials and presented it to our family after his graduation from preschool.

We had a lot of fun looking through the book together, cuddled up on the couch. He told me about many of the things they did over those two years. He talked about some of the things he learned, some of his favorite art projects, and which teachers he really liked (he actually seemed to like all of them quite a bit).

When we got through the book, I looked over at him and asked him what he thought would happen next. He was quiet for a bit and then he told me that he’d ride the bus and go to school in August. He thought school would be like his preschool, except with more time spent learning and not very many recesses (I told him I thought that was probably pretty close to right).

I told him that, in thirteen years, he would graduate from high school and we’d have a big party. After that, he might do anything. He might have started his own business, for one, or he might go to college. I told him that college was like school except that you didn’t live at home any more and you have to pay a lot of money to go there.

He looked at me. “I don’t have a lot of money.”

I put my arm around him, pulled him close, and told him that he’d have more money than he thought and that we’d help him pay for it.

And I meant every word of it.

I was extremely lucky that I wound up having more opportunities in life than my parents had. They didn’t have a lot of money, but they gave me the things they had to give. For example, my mother kept my nose to the grindstone and didn’t let me waste away my time getting into trouble as a kid. My father showed me the value of human relationships and connecting with other people.

I’ve taken the things that they’ve given me and built a life on that foundation, and now I have children of my own. Can I give them a foundation even better than my parents gave me?

I want the world to be their oyster. I want them to wake up when they’re in their twenties and feel like the world offers them an abundance of opportunity.

What do I need to do to get them there? I need to make sure that they have every opportunity possible to succeed along the way. They need to never worry about having the things they need to grow, like a musical instrument or money for a field trip. I need to expose them to the world through travel and experience. I need them to not worry about money when they’re considering what college to go to: the question should be which one puts them where they want to be in four or five years?

Those things all require money. They each require you to have some degree of financial stability, most likely in the form of both a steady income and a significant amount of savings. The only way to get there is through good financial behavior.

Which brings me back to that interaction with my son as we’re both kicked back looking at his portfolio. When he asks me about his future with a bit of worry in his heart, I can look at him and, with complete honesty, I can tell him that I’m doing everything I can to make sure that his future is everything he hopes it will be.

Good personal finance tactics simply underline my ability to be a good parent. I can give my child the honesty and the emotional reinforcement he deserves, simply because I’ve learned to keep my spending in check and I’m prudent with the money I have.

That’s a big win in a dimension that I never really expected when I first sat down five years ago to address that pile of debts in front of me.

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  1. mary m says:

    Sounds like a very sweet time together. Very nice.

  2. Kate says:

    Great post, Trent. The one thing that you can give him more that will probably count more than anything else is talking and encouraging him to talk. Encourage him to share his thoughts, encourage him to bank good memories. Encourage him to think out loud. From this post it sounds like you already do that, though.

  3. Mary Kay says:

    Your financial stabily will help in providing a home life that is low in stress. I think that is an amazing gift, of much greater value than a life filled with the latest toys, gadgets, and “experiences”.

    Your kids are blessed to have you for a father.

  4. Teresa says:

    Your articles inspire me to be a better parent & talk about money more with my kids. Thanks!

  5. con says:

    From Trent’s post the other day on the day of his son’s graduation from pre-school:

    “This morning, I wanted to ask him about the things he’s learned so far in his life. He’s a fairly bright five year old, so I expected some interesting answers.

    I asked him if he knew what Mom and Dad did all day when he was at preschool, and he told me that Dad writes stuff and Mom teaches.

    I asked him why we did those things, and he told me that we like doing most of it and we make money doing some of the stuff we don’t like to do. That’s pretty much spot-on.

    I asked him what we did with our money, and he said that we use it to pay for our house and to buy food and to buy books and to give him and his sister allowance.

    I asked him what he wanted to do when he grew up. He thought for a long time – fifteen seconds or so – and he said he wanted to be a painter.”


    “I told him that, in thirteen years, he would graduate from high school and we’d have a big party. After that, he might do anything. He might have started his own business, for one, or he might go to college. I told him that college was like school except that you didn’t live at home any more and you have to pay a lot of money to go there.”

    This from me: For crying out loud, the kid is only like 4 or 5 years old! Why are you grilling him on all this stuff right now? I know you want him to be financially responsible, but don’t you think you might like him to be a child for a few years and not lay that heavy stuff on him? Like wait until he’s 9 or 10 or so? I just don’t get it.

  6. Tatiana says:

    “I told him that college was like school except that you didn’t live at home any more and you have to pay a lot of money to go there.”

    You’ll be paying a lot of money for him to go to public school for the next thirteen years, through your property taxes.

  7. marta says:

    I have to agree somewhat with con @#5. I understand you don’t want your kids to repeat your mistakes, but seriously, it sounds as if you are making money to be such a huge issue by addressing it ALL the time, and your kids are still very young.

    Your FIVE year old was worried about not having a lot of money to go to college. Please!

  8. kristine says:

    Brace yourself for those HS extra-curriculars. With the school plays, model congress trips, track shoes, swim suits, music tutor, regional orchestras, camera for photo club, laptops, SAT course (raised it 300 pts.), and summer programs that got our daughter huge scholarships, expect to pay about 3-4K for grades 9-12, per year, per child, adjusted for inflation in 10-15 years. And that was without any outside academic tutors, which run 100-150 an hour where I live. Less elsewhere I am sure.

    My tip: Focus the funds on extra-curriculars that will help get into college, or garner scholarships. They should be in the child’s primary area of interest, or they should be president/officer of the group. Guide them toward a musical instrument that is in demand: bassoon, tuba…ask your program director. If they are not going to get a sports scholarship, then treat the sport as a fitness routine, not a mission.

    It is so competitive these days- you have to prioritize the activities in terms of time, and money, and be frank about with your kids when they ask why.

  9. kjc says:


    I think it’s fine that you want to instill sensible attitudes about money and good financial skills in your kids, but as mentioned by a few of the other commenters, I fear your kids may at some point rebel. As a parent of a couple of young men who’ve turned into well adjusted, happy, successful adults (28 & 30), I’d encourage you to tread lightly. If you’re heavy handed and relentless about your message, at some point it might just backfire on you.

    That said, my apologies, but on to a usage mistake you continually make: you have two sons, right? Joe is your OLDER son, and your OLDEST child, but he is not your “oldest son.” Sorry! It just bugs me every time you make clumsy, amateurish errors like this.

  10. Gretchen says:

    Ditto number seven. He’s FIVE.

  11. Nancy says:

    In reply to #8.
    When my oldest went to college in ’05, money fell from the sky. The more talented middle child in ’10 didn’t get as much. The youngest picked up a part time job this school year as the class of ’12 will be a very large class in the United States and we can tell that money will be tight.

    My children have all worked 50-60 hours a week during the summer as lifeguards/swim instructors. (Because of their busy schedules, I don’t require them to do much at home.) I made sure they were involved with swimming at an early age with the idea of future employment, safety, and all around fun. The oldest is now debt free upon college graduation and the other two are on the same track.

    The oldest has reported that many of her peers are anxious about the huge college loan debts they have taken on. As a family, we planned for college decades before the event.

    It isn’t wrong to plan ahead when children are pre-teens & teenagers and let them in on the truth of family finances.

  12. valleycat1 says:

    I don’t recall my child asking me about her future (worried or not) at age 5 (or 10, or even 15); Trent prompted this discussion with his son.

    As a single parent, I was straightforward with my daugher & set clear limits on what we could or couldn’t afford, and she knew I was not in a position to personally guarantee “the world would be her oyster”. Even so, she ended up a great person, self sufficient, with a BA and MA, happily married, and productively employed in the field of her choice. It’s great that Trent is proud of where he is financially, but what’s going to keep the worries at bay for his kids is at least as much their stable home life & loving parents they are so fortunate to have.

  13. Johanna says:

    #8: Ugh. I am so glad my parents did not take that approach when I was in high school.

    In my brief experience reading scholarship applications, there was very little that I found more unimpressive than students who were clearly just going through the motions in their jam-packed schedules that had clearly been designed by overbearing parents (or teachers, tutors, private-school counselors, etc.) for the purpose of creating a “winning resume” that would get them lots of scholarship money. These kids are easy to identify by their almost total lack of any opinions of their own, so devoted are their lives to pleasing other people.

    If a kid really deserves the scholarship, that generally comes across whether or not her parents are able to buy her 300 extra points on the SAT, or “guide” her toward a musical instrument that’s “in demand,” or treat her stint on the track team as a “fitness routine” or a “mission” (what’s wrong with treating it as a pleasurable activity that she enjoys?) In fact, it’s going to come across a lot better if she’s given some room to explore her true interests and be herself.

  14. Marinda says:

    Kiddo number two just graduated with an engineering degree and about $13,000 dollars left in the college account. Good high school grades and great after school sports and band participation got his funding for four years, his final year he covered with internships and his mutual fund we started when he was three.

    He may need those funds to transition himself into the workforce, but I am still feeling the glow from yesterday’s ceremony.

  15. kristine says:


    The only thing I had to do for my daughter was stay out of her way, and to scale her back. She is a crazy brilliant overachiever, loves school more than anything, and I nixed additional activities she wanted to be in. Fitness routine is the scaled back version of what she wanted- to be the best. Track was ruining her legs, so I convinced her to “settle” for fitness routine. It was her idea to switch to bassoon, and she told me that she approached her program director to find out which would be best to get a music scholarship. It was a smart thing to do, and worth passing on. Turn out she loves the bassoon, though she can play 5 instruments at a regional level- she has a gift, and loves music.

    My point was this- if your kid is going to do a ton of stuff-as most want to do- help them think through what makes sense for their goals. I would be perfectly content if my daughter wanted to be a garbage collector- as long as she was happy, full of integrity, and self- sufficient. But her goal was always to go to MIT for bio-engineering- which she is next fall- with a full tuition scholarship. I know my PPV is no the norm-my kids are gifted, and my daughter in particular is a success at anything she touches. Choosing from her options will always be her biggest puzzle.

    She wants to cure cancer-saw a cousin die from it. She is a determined young lady. We leveled with her pretty early on we had 8K for her entire college ed, so she had to get scholarships. Given that-good choices were imperative, starting in 9th grade. With a full AP load, sports and clubs can take a huge toll on a kid. I was never for doing so much, but she loved all her clubs, so we got her thinking about gearing it towards future goals, and to cross some off the list.

    Frankly- I think it should be illegal to let kids take so many AP courses, and criminal to let a child forgo lunch (it would be illegal for any adult worker). Our area is very competitive, and schools judge against those in the same localities. With a top school as the goal, you have to keep pace. MIT rarely takes more than 1 child from a single high school.

    My son is in all the school plays, at the expense of his academics, but it makes him incredibly happy. His dream is to be an architect. For sure it was good parenting to have a discussion with him to make sure he was considering his long term goals when it comes to his time usage, and activities. Perhaps an architecture mentorship in the summer, when not in plays, would be a good idea! And maybe skip one of the 5 plays, to keep the grades up. These are the choices you help them make.

    For many families- scholarships are the only way their kids can go to college. My husband is a college prof, and vets applicants all the time. It is pretty easy to tell when a kid is into their activities, or was pushed into them. I am against pushing. But I am all for frank discussions, guidance, and strategic choices. If a kid is going to play an instrument, and you are poor- why NOT try out one that is in demand? Why NOT scale back sports if is purely recreational, and not spend 15-20 hours a week training and going to meets? 10 hours is just fine- it will keep them healthy! Why NOT spend the money on an SAT course, if it makes sense for the school you want to attend.

    And if you think these kids have no opinions-well-you would be shocked at our dinner table. My kids have opinions for miles. And once in a while we even agree.

  16. Johanna says:

    kristine: Well, that’s a very different situation than you seemed to be describing earlier.

    It’s hard for me to believe that MIT rarely takes more than one student from a school (per year, I guess), and it’s even harder for me to believe that this is anything like the norm among top schools. When I was at Duke, I knew a lot of people who had gone to the same high schools. And these were not extraordinary students, or extraordinary schools. But this was 15 years ago, so maybe things have changed since then.

    And of all the scholarship applicants I evaluated, I can’t think of a single one where what instrument the person played made a bit of difference to how the application turned out. I suppose if I’d come across someone who played something really unusual, like the hurdy gurdy, that would have caught my eye, because I’d be curious to know the story behind that. But bassoons and tubas? Who cares? I’d think any medium-sized university is going to have all the bassoon and tuba players it needs without having to seek them out.

  17. carolyn says:

    Your son is 5 yrs old. He has the next 80 yrs to worry about adult issues about money, status, etc. This is not something that should be focused on now.

    But I do believe you are wise enough to know that already, which makes me think there is another reason you are blogging as such.

    In any event, I am glad I know better.

  18. kristine says:

    Nowadays… (jeez I sound old!) students are told, by the college recruiters, to send along a CD and play history if they play an “in demand” instrument, even if they are going for something unrelated. If they have several students of equal footing, a “yes” recommend from the music dept. can sway it. Apps are electronic, and circulate through departments. Anything to narrow it down. We heard this from both the Brown and the UPenn reps. Similar to being on crew at some schools- it helps. Art portfolios and prose can be a factor too, regardless of relevance.

    The number of college apps has grown exponentially in the last 10 years due to common online apps. Most kids around here apply to 10-15 schools. So the colleges tell you that anything at all you can do to add value to the school, or show both depth and breadth, is a factor- seek it out and include it.

    My ex is a current first round interviewer for an Ivy League school and there is indeed an invisible “quota” to not take too many kids from one area- usually 1 per HS, and 2 if they are exceptional. The guidance counselors at the HS can give you the acceptance patterns for your area- if they are good.

    I think this may apply more in my locale- an Ivy League feeder area of NY, where 5-6 AP courses a year is the norm. They judge the kids on the local competition and availability of courses in that area. This is to prevent a kid in Montana, where they only offer 1 AP course, from being knocked out by all the kids in the Northeast who take so many.

  19. David says:

    It may of course be that schools would like you to state on your application whether or not you play the accordion, so that they can reject you if you do.

  20. getagrip says:

    My kids asked all kinds of questions when they were young, on all types of subjects. I’m not surprised at the “I don’t have a lot of money” response because it falls into the “I don’t…” category I remember my kids asking about, e.g. “I don’t know how to play piano” or “I don’t know how to drive a truck”. I doubt Trent’s son was as hung up on the money part as the worry there might be something lacking and looking for a bit of parental reassurance.

    Also, don’t think this reassurance ends when they are little. Pay attention, the times your teenagers really want to talk are often the times when the game is on and its the fourth quarter, or you really wanted to take that relaxing bath, or you just got home from work and need to get dinner started. Stop, sit, talk with them and you’ll likely find they have a very different view of what is going on around them than you thought. Just the other night my oldest was home from college and started chatting and I just wanted to get to bed, but instead stayed up and talked. Among other issues we discussed, I learned she has a different view of how she would spend her money on cars and doesn’t see why we wouldn’t buy a new one and keep it 10-15 years versus buying a used one and keeping it 5 or 6. I also learned she was worried about what we were going to do with the car she is currently driving. It was a good conversation in discussing priorities and timing with respect to life and finances and with respect to the car she’s driving, expectations.

  21. Earth MaMa Jo says:

    I did everything I could to keep the concept of the world being the oyster of my children’s lives (ages 20 and 16), but it has promptly died due to a number of reasons. I sincerely hope you can keep it alive and your son will actually experience it. I’m seeing that for my children – their young adult lives are much harder than mine ever was. And, it doesn’t seem to matter that they did all the “right” things, or that we did all the “right” things – the world just doesn’t operate on the same rules anymore.

  22. erb says:

    I think it is great you are talking to your kids about the future, and it is wonderful that they are starting to understand that it costs money to do the things we want to do in life. I would have suggested a different response to your son. Instead of just telling him that he would have more money than he thought he would have, maybe you should have said “if you need money to go to college you can always get a job and work your way through school.” That way if there is a financial problem in the future that prevents you from helping him with college expenses, he already knows that he should work for the money if he needs it, instead of borrowing or asking mom and dad. Life is going to be financially tough for future generations of young people. You are wise to teach financial responsibility now. It is also very wise to plant those thoughts now, while he is young. If you wait until he is a teenager, it would have been too late. If they are old enough to ask for money for a candy bar, they are old enough to have financial realities explained to them.

  23. SLCCOM says:

    # 19 David: or bagpipes! That should call for lifetime ban from any school…

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