Five Illuminating Takeaways From Your Family Money Letters

Be mindful about earning, saving, spending and investing.

Operate your spending, around cash, this builds mindfulness around money.

In terms of spending, a penny saved is indeed a penny earned. However being mindful about spending - learn what experiences/spendings give you pleasure. Enjoy it.

Diversity in investments is prudent, index funds, real estate, hard assets, a business. Diversity in investments, moderates the risk, reduces the fear element.

Indulging children and grandchildren - there's a place for that if done mindfully, prudently. You don't want to build dependency, or take away the power or resilience of younger generations. Sometimes people need a little help, and that's ok.

"... she asked for a couple of thousand dollars in gift cards...."
Excuse me?

My 13 year old daughter took courses in economics and personal finance in her 8th grade last year. She has been fortunate to attend a highly ranked charter school in Arizona (Basis). Why don't other schools teach such subjects? I had economics in high school, but for personal finance, I was on my own.

I was a single mom without support from exhusband..so my son learned that we would pace our spending. Two things... I wrote him a little book of advice, in case I died before he was full grown. Short subjects, a few sentences.
The best...Character will get you through times of no cash, better than cash will get you through no character....

Also, when he entered high school, I let him choose how to spend the $15 dollars a week we had after the bills. A movie and a cheap meal? A nicer meal, and a free bike ride? Expensive home cooked meal. He got to make the decisions and see where the money went. The value of a dollar is more valuable when it buys experiences. You can never lose and experience....

We have tried to be good financial examples to our kids: only buying clothes on sale, used furniture, used car, family vacations staying at relatives' houses, modest allowances, etc.

A key moment in our lives was when I received a big promotion while the kids were in middle/high school. Instead of splurging with a new house, second house or boat, we downsized. We bought a charming 1300 square foot Cape Cod house in the center of our small town, but within walking distance of coffee shops, restaurants and the library. A first there was a lot of grumbling, but within two months everyone concluded it was the best thing that could have happened. Their friends were over to our house constantly and were able to move about town without the need of a car.

The most significant impact however was the increased cash flow we had between less taxes, utilities, etc., and the higher salary. We saved even more (20% of gross salary), but we also spent more on family experiences. We started to take twice yearly vacations to Europe, Asia and Central America, while still aggressively searching out airline and hotel deals.

As a result our kids a big savers, extremely budget conscience and world travelers. The best thing though is that, even though they have graduated from college (public) and out on their own, they enjoy spending time with us! And, we have more time to spend with them because we both retired a few years ago at 55.

Love the letters. Thanks for including them. So tender.

This article was interesting but it lost me almost right away when Mr. Oliver described young people as having the attention span of a gnat.

Invest $100 every week, and in fifty years you will have $250k plus growth. Accumulated Inflation in fifty years reduces the present value of your estimated yield.

Our economizing has resulted in a 16 year old car that still runs and only 8 pairs of shoes in my closet. We have a small house in a working class neighborhood with friendly neighbors. The kitchen needs a facelift but is very functional. We are not bothering with a new one. No one would guess we have over 2 million dollars in retirement accounts. Tell your kids to avoid the Joneses in the first sentence of your letter. Then tell them to set up a six month emergency fund. After they do that send another letter about index funds. Tell them to enroll in a 401K if they are luck enough to work for a corporation that offers to match their contributions.

Great Article ....

And get a good lawyer if you find success, inherit money, or any other so-called stroke of luck! Along with that, an accountant is a must. I inherited money into middle age, after making my way through divorce, single motherhood, and climbing a ladder. After this came division of assets from the results of a family who had not had benefit of properly learning the above facts from a smart, well-educated,hard-working and frugal father! Mother encourage us to buy things as she had been able to successfully do so, but economized in her own way. Confusing messages lead to confusion in personal awareness, budgeting, and all the rest. I took a course for managers and learned that the first-generation maker of wealth is often wasted on the second. This column is important advice for families.

I often look around my neighborhood and wonder how people can afford all the things they have. I can easily afford more but consciously don't spend it.

I want a new car, I want a nicer home or second home, I want a bigger boat, I want to join a private golf club, I want a pool, I want what my neighbors have. I can easily keep up with them but I don't. I have to stay disciplined and stay the course.

I need to save more, I need to pay for my children's college education, I need to retire when I am still healthy, I need to be home more, I need to spend less, I need to have more friends, I need to tell my wife I love her.

I leave the house for work and come home days later. I need my children to realize how hard I'm working while on the road. Do they realize how hard I work or how hard I worked to get where I am?

Spend less than you make, save more than you want, private college is for the very rich, spend half as much on a house than what the bank offers to give you, keep your car for a long time, eat in, read Rich Dad Poor Dad, read The Millionaire Next Door.

I love money. Always have and always will. I hate parting with it.

This article assumes that every parent would write a wise letter that would help their child avoid financial mistakes. What about the majority of people who have no savings, massive debt, and still spend freely? Who just have to own the latest luxury item? What kind of letter would they write their kids? We need real financial education in schools in this country.

A couple of thousand dollars in gift cards from her Uncle as a high school graduation present? Does The Times even have a sense of how out-of-touch this is with ordinary human beings?

“Investing... is basically a form of gambling." Greg Berman

Investing is when the probability of a gain is higher than that of a loss.

Gambling means the probability of a loss is higher than a gain, because that is how the "House" gets paid.

Not a good idea to confuse the two, especially in talking to the next generation. They need to know the difference between a lottery ticket and a mutual fund as a vehicle for retirement savings.

While this might seem obvious, many people do view gambling as a way to get ahead, while seeing the equities market as a way to lose money, in spite of 130 years of evidence to the contrary.

I won't disagree with the "one spouse" rule, but owning two properties can be financially very sound. As with anything, no one should buy what they can't afford! But owning a getaway spot can be good for mental health while also obviating high hotel fees.

I don't keep track of every dollar in or out, but I did so for 6-12 months not long after I started working full-time. That instilled in me the ability to observe my own behavior objectively and measure it in dollar terms.

A great way to maximize buying power is to shop for bargains. The warehouse clubs can be well worth the membership fee. If one family spends $9400 on the same goods that cost the neighbors $10,000, it's the same as earning $600 on a $9400 investment.

Maintenance pays off. Dental hygiene, good nutrition habits, and moderate exercise are low-cost; paying doctors to fix our teeth or our bodies is not. Tuning up your vehicle every X miles similarly pays off. Avoid addictions, and don't skimp on toothbrushes or air filters.

In investing or in spending, patience is a virtue. The computer you love today will be even more lovable if you can get it 6 months from now for 25% off.

Mutual funds can be low-cost, with good returns. I use various types, but I prefer the funds (VFORX, e.g.) that change investment mix over time rather than funds (VINIX, e.g.) that track a market index.

Invest in what you know. Get rid of possessions rather than paying for storage space. And, neither a borrower nor a lender be.

I grew up poor, one of 6 kids. Dad worked as a laborer; Mom stayed home. My Mom's favorite thing to say about money was, "Money doesn't grow on trees". By a fairly early age, we knew not to ask for Mom to buy us the "stuff" we longed-for. We weren't going to get it. Period. Amazing that my parents fed, clothed and raised 6 kids on my father's tiny salary. But that feeling that money doesn't grow on trees (and is therefore highly limited) has stayed with me longer than I care to think about.

Money was never a taboo subject in our home and three of the most common sayings were "You can't take it with you" and "Think how much of your life you want to spend cleaning,dusting, and maintaining what you own" and "Life is short."

All three have helped me stay grounded and financially secure ( well, that and a close eye on my spending and investments) My wardrobe consists of some basics, including a few dressier outfits mixed among mostly casual pieces - because I want to limit time doing laundry, Material possessions are limited to books,( but most of what I read comes from the library), some select items of nostalgia , some art etc.

Why? Because life is too short to clean and dust knick knacks

Whenever I take a walk, socialize with friends, I come away feeling richer than I would looking at rooms full of possessions. I love gardening so I trim my possessions to allow time for that.. I love spending time selecting fresh fruits and vegetables and other items so I can cook good meals

It is all a matter of priorities. There is no judgment here. If someone takes pleasure in collecting stamps or sculpture or enjoys having a large wardrobe of clothes then they are spending their time in a way thst suits them. As should we all.

The old adage, "Money is the root of all evil," really should be replaced with (certainly in the context of this article), with, "Fear is the root of all evil." Think about it for a moment. Fearful of no money? Fearful of sex? What's the difference?! Fear drives everything we do. The human brain is uniquely adapted to deal with fear in a rational way, if it's cultivated.

Good, practical advice is essential, but maybe what we should be teaching the next generation is how to manage and live with fear. Whether that's teaching them a spiritual practice (my recommendation) or something else, the bottom line is you HAVE to deal with your fear. Better to deal with it in a positive way as early as possible in life than to struggle with it your whole life. That's the best gift one can possibly give to a son or daughter, or a grandson or granddaughter.

I Money was a taboo subject in our house growing up. I knew we were strapped. Both parents worked. My brother kept badgering my mom for a new bike until she broke down crying and said there was no money for that.
My parents scrimped and saved and worried (worst part) and did accumulate enough that that my Dad had 9 years of disability retirement before he died at 59. My mom recently died after a short illness and left $200k to her 4 kids. After her father died she gave each of her kids $2k from his estate. I went to South America for 3 months with that and she said she would never give me money again. I credit my brother with my Mom having anything to give her kids (not that I expected anything), since he cared for her when she would have had to be in assisted living at least.
I have had a to-the-dollar daily budget tracking spreadsheet for 25 years. It is the knowing what and how my money is spent that is useful. And like any resource you have to know how much you have, and how it flows in and out. I know of no one else that does this. It actually worked against me when I tracked my 401k like that and got out at the bottom. Took that out of my spreadsheet. I can be a worrier like my parents. But there are 2 kinds dof worry, about things you know or you don't know. There are actions you can take about the 1st kind, nothing you can do about the 2nd.
The best advice I could give would be is for you to marry someone who agrees with you (mostly) about finances

Should be a prerequisite for every American who has children since this country has so much consumer and educational debt.

For the past 15 years or so, I’ve made it a practice to write January letters to my wife and kids revealing the essentials of our finances to them like where the gold doubloons are buried on our estate. The safe behind the picture of Dorian Gray over our fireplace is crammed with these letters.

My wife and I purchased cemetery plots for the two of us about ten years ago. This past summer we purchased one for this very good dog. A few months ago I visited a local funeral home and left them a fat envelope with instructions for what’s to be done when my time comes.

No riderless horse for me with the boots placed backwards in the saddle . No bagpipes. No 21 gun salute. I’m leaving it optional with my wife whether she will engage Madonna or Beyonce to render a rousing version of “Don’t Cry For Me Argentina.”

Not content with that, I’ve even gone so far as write my obituary, in which I am compared favorably to Cary Grant, Willie Mays, Noam Chomsky and President Obama. I hope to read it many years from now on the front page of the Times, copies of which I have been reliably informed by my religious adviser are delivered every day to the Pearly Gates.

As for “Don’t Cry For Me Argentina,” I’m not unalterably opposed to it

I would not put down owning a portfolio of individual stocks. If you want to take the time to learn how to evaluate companies and understand industries, you can do very well - if you have the ability and put are willing to make the effort.

I started with 100 shares of 3 different stocks in 1990, and today I have 67 different stocks in 7 accounts I am responsible for. Patience, time, and humility is the key.

I will be helping my nieces with their inherited stock portfolios. One is promising as an investor, the other is not very interested in this sort of thing. If you fall into the latter category, then you could do worse than an S&P index fund, although I would recommend a fund allocated by equal weight and not by market cap.

Wonderful set of articles, and it has inspired me to begin the conversation with my 2 children. Ron, are all (or a larger selection) of the letters NYT received available to read?

If you can't understand it, don't invest in it.

Save when you can. Spend when you have to. Have some fun along the way--just don't overdo it. And be happy with and thankful for what you have because it can all be gone in an instant. And always apply the real SAT test to your decisions: Stop And Think.