One reader shares how to turn hard work of our parents’ generation into financial independence and prosperity
We talk about financial independence as a destination but often overlook the journey it takes to get there. The road to building long-term wealth and freedom isn’t an easy one and sometimes takes multiple generations.
That’s why it’s important for parents to not only do what they can to succeed but to teach their kids about money and good financial habits. It’s only by passing down good money lessons that families can build that generational prosperity.
Today’s scholarship essay is by Vanessa Ta, a student at UCLA. She shares how she plans on building off the hard work of her parents to create her own financial freedom.
Check out Vanessa’s story and please share on social media. The most-shared essay on how parents can teach their kids about money will win one of our two $500 personal finance scholarships, announced August 31st!
Not sure how to teach your kids money tricks or good financial habits? You’re not alone. It’s not something that’s taught in schools and few of us were ever taught by our parents.
Check out Dave Ramsey’s Total Money Makeover: A Proven Plan for Financial Fitness. A New York Times best-seller with more than four million copies sold.
Coming to America with a Dream and Little Else
My father is the hardest worker I know. Immigrating to the U.S. at twenty-six, he started life in this country with broken English, fifty dollars, and a suitcase full of clothes. Everything that came his way, every dollar, every penny, he saved. Working over-time was routine for him.
Fast forward thirty-six years, and my dad has bought a home, paid for my siblings’ college tuition, and lives the comfortable life he deserves. He is the embodiment of the American dream.
But he did not do this for himself. For my father, and for much of my immigrant community, the pursuit of financial empowerment is not driven by personal retirement planning or a desire to live a luxurious life. It is done for their children.
Parents in my community have risked everything in coming to this country, for the collective hope that the lives of their children—not themselves—will improve.
This is the land of opportunity, yet opportunities often come at a cost (college tuition, for example). Immigrant parents work hard and live frugally in hopes that they can afford these opportunities for their children. For many, money is not compounding interest in a Roth IRA or retirement plan.
They’re investing everything in their children. Their hope is that we will be the ones to reach financial independence and provide for them in the future.
Turning the American Dream into Financial Independence
The generation before us prized hard work because it was the only tool to reach financial freedom and opportunity, yet the key to financial empowerment does not lie in working hard, but in working smart.
It is my hope that my generation not only appreciates the struggles of their parents, but uses the tools available to them to avoid the stress of financial uncertainty. There has never been a better time to start then now. One of the most effective methods of saving is through a Roth IRA, and the earlier one starts investing, the more powerful the investments become.
Compound interest–over the course of many years–has the potential to exponentially increase funds. Having just acquired my first summer job, I plan to take advantage of this.
Of course, it’s difficult to spark conversations of retirement when you’re a teenager talking to other teenagers. “Really? A retirement account?” my friends would say. “Vanessa, I don’t even have a job yet. What am I even retiring from!” And while they do have a point, I, as well as many of my friends, are facing financial decisions that will impact our future for years to come.
Student loans, living alone, new credit cards, it is vital that we become financially literate in order to navigate this new world.
This itself has its own challenges. Teenagers believe themselves to be invincible (believe me, I’m a teenager). We want to live in the moment, make memories, and have fun . . . but fun has an expense. We need to be smart. We need to understand exactly what we are trading away, and to build good habits before it’s too late.
Financial education empowers youth, giving them a sense of independence and self-worth. While facing a new and intimidating future, financial planning provides teenagers with a feeling of control and stability. It is the beginning of their independence.
I know too well the consequences of financial insecurity. Talented, intelligent peers of mine have sacrificed their dreams in order to support their family due to financial difficulties, yet this could have been avoided with proper financial education and planning. Our parents struggled, but that doesn’t mean we have to. If we start, plan, and invest early, we can use our money to the its fullest potential. As the saying goes, it’s not about working for your money, but making your money work for you.
I want to thank Vanessa for sharing her story about turning her father’s lessons into financial freedom. Be sure to support Vanessa by sharing the article through social media and check in August for the winner of the personal finance scholarship.