3 Money Lessons from a Three-Year-Old

My daughter turned three this fall. And, as the daughter of a wealth manager at BDF, she naturally hears a lot about the principles of saving, spending and planning. Lucky girl, eh?

Some of you reading this will say, my kids were three once. They didn’t know a dollar from a donut. In fact, most people equate a three-year old’s expertise with that of negotiating treats or skipping out on a much needed nap.

But the shenanigans aside, there is something to be learned about money and how we view it from a three-nager.

  1. Know your limits – On certain weekend mornings, I’ll ask my daughter to take me out for coffee. Invariably her response is “but I don’t have any money”. While this isn’t entirely true—her great aunts keep her chock full of singles and fives—she makes a great point. If you don’t have the money, don’t spend it.
  • Lesson learned – Far too often we feel like we need to spend money on something because someone asks us to or it allows us to do something we “need” to do. The empty pockets routine won’t likely work well for an adult, but just because you have it doesn’t mean you need to spend it.
  1. New isn’t better – I’m pretty sure my daughter’s feet aren’t growing. She’s worn the same pair of pink Converse for nearly 25% of her life. The shoes definitely have seen better days, but they do what she needs them to do and they’re nothing fancy.
  • Lesson Learned – When it comes to investing your money and thinking of the long-term, is new really that much better? The financial markets will always come out with something flashy or sexy to invest in—but do you really need it if all you want to do is continue moving forward?
  1. Change is hard – The start of this school year was my daughter’s very first school experience. She went from her easy going days at home to the rigor of memory games and watercolors. But honestly, it was hard for her and perhaps one of her biggest transitions in her life to this point. We gave her plenty of time, talked about how school would be good for her and encouraged her to make friends. Now we can’t keep her from bolting out the door each morning and there is a never-ending stream of names of new kids from school she’s met.
  • Lesson Learned – Give yourself the chance to transition in life. Whether you’re tightening your household belt to save even more for college or you’re transitioning into retirement, you’ll need time to adjust. And it won’t happen overnight. Just consider the idea of going from accumulating retirement funds to consuming them—that’s harder than making new friends in my book.

    Nick Cosky, CFP® is a Wealth Manager and Owner at BDF and is responsible for educating and introducing prospective clients that are considering hiring BDF for their wealth management needs. In previous roles, Nick has served as the head of BDF’s Financial Planning Committee and has participated on the Business Owner Team and Women’s Service Team. Nick is passionate about the planning that BDF does for its clients and enjoys every aspect of the client-advisor relationship. Nick graduated from Lawrence University in Appleton, Wisconsin, with a Bachelor of Arts degree in History and English. He is a CFP® professional and is a member of the Auxiliary Board at the Art Institute of Chicago.