Money Minded Families

7Principles of Money Management: Save

As discussed earlier, I grew up with a father who was a banker and a mother who did not work outside our home. We never, ever spoke about finances. Because we never talked about it, I didn't think about money: how to spend it, save it, or value it. That all changed when I graduated from college burdened with both student loan and credit card debt. It took me years to undo these bad habits and get out of debt. As a result, I had no money to save. I started late and, fortunately, was able to move up in my career, and as I earned more money, I saved more money.

To this day, parents and even schools are woefully underprepared to teach our children about money management. Parents often lack the time and resources. Schools rarely make it part of their curriculum. This must change. In order to help our children develop invaluable financial skills as adults, we must embrace our role as teachers of money management by teaching them some basic concepts while they are young. My goal is to arm you with some basic tools to start this important dialogue. The foundation of managing money is saving. Knowing how to invest well and spend well is nothing if you can't save well. Think of it not as saving but as purchasing freedom.

The Richest Man in Babylon, by George S. Clason (Penguin, 1926), is one of the seminal books for teaching young men and women about personal finance. In the book, a man named Arkad, known as the richest man in Babylon, shares his ...