Author of the New York Times and Wall Street Journal bestsellers You're Broke Because You Want to Be and It's Called Work for a Reason, Larry Winget has just released his latest book, Your Kids Are Your Own Fault: A Guide for Raising Responsible, Productive Adults. Combining a tough-love attitude with the author's own parenting experiences, the book rejects common ideas with a new brand of behavioral discipline, covering everything from dinner table manners to fostering a professional attitude. In one chapter, Winget focuses on financial responsibility, a quality which he feels is lacking not only in today's children, but in today's business world as well. Addressing this topic, Winget provided MGB with a sneak peek into the chapter, and with practical advice that can benefit not only concerned parents, but the fiscally challenged as well.
Why were you inspired to tackle the issue of raising responsible, disciplined children? What are some common mistakes that parents are making today?
After being on stage speaking to businesses around the world for twenty years, I've realized that to really change things in our world, we have to tackle the problem at its most basic level: kids. When we raise a generation of people who take responsibility for their actions, know how to handle their money, know how to give their word and keep it, do the right thing in every situation, live healthy, active lives, and build their lives on honesty and integrity, then we can fix business, the economy and nearly all of the other problems we face in society.
The most common mistakes parents make are in the areas of communications, consistency, and consequences. First, we don't really communicate with our kids about what we expect from them or what the consequences are for meeting or not meeting our expectations. Parents also are not consistent in their behavior. Most people have situational ethics and situational discipline. They will decide when and if they are going to discipline their child based on how busy they are at the moment, whether they are tired or if they are watching their favorite television show. Good parenting happens regardless of the situation or how you feel; it must be done every moment of every day regardless of your personal situation. And the biggest mistake is consequences. Every action has a consequence. Those consequences should be communicated to the child and then followed through.
In chapter 8 you address the issue of instilling financial responsibility at an early age, and due to the current economic crisis, it seems the adults in our society could use a similar lesson. What are a few of the helpful guidelines you discuss in the chapter?
Fiscal responsibility is not very complicated. Begin by making sure that your lifestyle doesn't exceed your income. Then you have to understand that your obligations are just that: obligations. You are obligated to pay the people who have extended credit or services to you regardless of your situation. You gave your word and you have to keep your word whether it is convenient or not. Then understand that money always goes to what is really important to you. If looking cute is the most important thing to you, all of your money will be spent at the mall. If being financially secure is the most important thing to you, then you will make sure you save, invest, and pay your bills on time.
In the "Money" section, you also reveal your theories towards bailing kids out when they make a financial mistake. What is your attitude towards this and does it reflect on your outlook on the recent bail out?
I've never met anyone that didn't get themselves in a mess at some point. When your kid gets in a financial mess, I believe it is okay to bail them out . . . once. But make sure that when you bail them out that they know it is a one-time thing and that they learn the lesson of their mistake. Consistently bailing out your child is not forcing them to take responsibility for their mistake or to feel the pain and consequences for their behavior. When you cheat someone out of feeling the pain and consequences of their mistakes, then you doom them to repeat the mistake. You also give them a sense of entitlement that they are allowed to make mistakes and someone will be there every time to help them. That's where we are in society right now: there is a sense of entitlement based on the government bailouts that it is okay to mismanage your business or your mortgage and someone will be there to bail you out. I get hundreds on letters every month from people wanting to know where their bail out is. Why should anyone be bailed out because of his mistakes? They shouldn't. Make a mistake, feel the pain, learn the lesson, and don't repeat the mistake. It's a simple self-correcting process.
How did you come up with the 10-10-10 Rule? Do you use this rule in your own life?
It's not an original concept with me though I wish it were. The concept is very simple. Save 10 percent of your income, invest 10 percent of your income, be charitable with 10 percent of your income and live on the remaining 70 percent. This basic philosophy can keep you financially secure throughout your life. I use it in my own life, though I try to invest more and save more when times are especially good, which is also a valuable lesson for people to learn. Most people adjust their lifestyle when things are good and then when the cycle adjusts and things aren't so good, their income can't keep up and they don't have any savings. That's what most people are faced with right now. If they had saved more they would have been able to sustain much longer.
If a parent has bad financial habits, is it still possible for them to pass good habits on to their children? What advice would you give parents in this position?
A parent can only teach the habits they exhibit. That old saying "Do as I say, not as I do" doesn't really hold much credibility. Kids are always going to do as you do and not as you say, especially when your actions are in contradiction to your words. Your own behavior in every area is the example that will be followed. Overweight parents typically have overweight kids because the kids have witnessed poor eating habits. Parents who read books normally have kids who read books. Parents who enjoy outdoor activities typically have kids who enjoy those things. And the same applies with money. Parents who exhibit poor money habits teach those habits to their kids.
That's why my book isn't a "fix your kid" book; it's a "fix the way you parent" book. That means that you have to look at your own life and what you are teaching your child so you can teach them to be responsible, productive adults. Every parent should hold a mirror up to their own life and actions to make sure that they are setting the right kind of example for their child to learn from and if they aren't, change their life and actions. Lastly, this is also not a "how to raise your kid" book but more of a "what to teach your kid" book, and you can only teach what you know and practice.
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