Avoiding Common Mistakes People Tend To Make in Life

Larry M. Jacobson (attachment # 1)Hey Larry,
















The Best Ways to Teach Your Kids to Respect and Value Money

Hello Larry,

As a parent, I have great concerns about my child’s ability to act responsibly with money.  It seems like the youth these days have a reckless attitude and carefree approach.  Any advice you can offer on how to best teach my son how to treat money with respect?  I am sure there are many other parents that read your blogs that could benefit from your advice.  Thank you. ~ Cory, Little Rock AK

Great question! Cory, I applaud you for wanting to educate your child to act responsibly with money. Like you, I find it amazing that despite all the value Americans seem to place on education in this country, the one subject that constantly seems to be neglected within most middle school and high school curricula is money management (e.g., personal finance). Because there is no standard education offered regarding money, the only real way most people tend to learn about it is by observing how their parents, teachers or friends value it. For example, if your parents are conservative, you most likely will be conservative with your money. If you disliked how your parents either saved or spent their money, you may decide to have the exact opposite view, which may explain why so many young adults appear to have such reckless and carefree attitudes about money.

As I reflect back on my own childhood, I am both amazed and miffed as to how or why nobody ever thought to discuss these important topics with me including my parents and teachers. Basically, I was educated by my favorite Saturday morning cartoon characters and fellow TV kids about how much better off my life would be if I only ate or drank certain types of foods, wore certain types of clothes, or drove certain types of cars. Like most kids today, I was taught how to spend money, rarely how to save, earn, invest or grow it.

To teach your son to treat money with respect, you will not only need to address the fundamentals of money (its value) with him, but also the importance of managing his own emotional relationship with it. One’s emotional relationship with money is really the catalyst for why most Americans suffer from what I call financial obesity, one’s obsessive and self-sabotaging need to constantly overspend and remain financially unhealthy. Like over-eaters, the financially obese allow fear to prevent them from achieving their personal and financial success they desire. Again, most young adults tend to learn about money by observing how their parents and teachers also emotionally manage their money (confidently or fear-based).

Children should be taught from a young age how to manage their money so it does not become all-encompassing or manipulative. Do not enable or guilt your child with money. They need to learn on their own how to become responsible with it so they understand why it is so important to save it and not be pressured to “keep up with the Joneses” by overspending to fill emotional and self-esteem voids.

To help your child understand the value of and emotions surrounding money, you might want to share the following analogy with your son that I share with many students:  Money is like an accelerator (gas pedal) in a car; the amount you save and manage is similar to the amount of pressure you can apply to your own financial accelerator. Good money management affects the speed as to how quickly you are able to reach your goals. The more you save and manage, the faster you will get what you want in life. To do this more effectively, one also has to be aware of reckless spending. Like reckless speeding, it could result in serious financial and emotional setbacks. Conversely, like experienced safe drivers, being financially aware of your surroundings (savings and spending habits) and driving within your own life’s speed limit (living within your means) will give you the freedom and opportunity to really enjoy your life’s beautiful scenery (family, friends, career, travel, etc.) without any undue pressure.

To help you get started with educating your son to respect and value money, I would like to offer you the following suggestions I share in my upcoming book, Growing Success: A Young Adult’s Guide to Achieving Personal and Financial Success:

1. To help teach young adults good savings and spending habits, I instruct them to create a monthly budget of income and expenses. The income could represent their allowance for chores performed around the house, etc., or money they earn from a part-time job after school. Their expenses should include: food, entertainment, gas (if they drive), cell phone, and any other items they tend to spend money on, consciously or unconsciously, on a monthly basis.

2. Take the time to explain to your son the importance of tracking and writing down each expense he may incur on a daily basis. When I was younger, I used to carry around a small notebook. I would write down the date, vendor, amount and expense category (food, etc.) of each expense so I could keep track of my spending. Your son will be amazed by just how quickly his money is being spent if he starts to track his spending. More importantly, it helps him learn to prioritize what he is spending his money on and identify his unnecessary emotional spending early on.

3. On big expense items, encourage your son to create a purchase plan so he can efficiently fund his purchase. When I was 17, I bought a new drum set. I did my research and decided that I wanted a beautiful walnut Gretsch drum set. At that time, the drum set cost $600. I can remember sitting down and figuring out how many weeks it would take me to buy the drum set based upon the number of hours I would have to work at my part-time job as well as what areas of my spending I would have to cut back on to help me purchase the drums. This allowed me to purchase the drum set while remaining within my means. This also helped me to learn how to manage my checking account more efficiently as well.

4. Emotional purchases and “keeping up with the Joneses” – It is important that you help your son create good spending habits early on. Chris Gardner, in his book, The Pursuit of Happyness, had a great quote from his mother, “The cavalry isn’t coming.” Parents who enable or encourage their children to compete materialistically with others are doing a terrible disservice to their children. As I said earlier, children learn their money habits by watching their parents. Prior to the 1960s/1970s, most Americans practiced good money management and spending through the tenet of WORK, SAVE, and then BUY. Yet today, we have been led to believe (as a consumer society) that we MUST HAVE IT, CHARGE IT on credit, and eventually PAY FOR IT LATER. What society and today’s consumerism mantras don’t teach you is that you really, really PAY for it later. Teach your son to live within his means and to keep his emotional spending in check. Train him to ask himself the following questions before making any purchases:

1. Why am I really buying this product or service?

2. How long do I plan to use this product or service before it becomes useless?

3. What would happen if I chose to wait another two to six months until I could truly afford to make this purchase?

5.  Encourage your son to save 10% of his monthly allowance or part-time work income in his own savings account. Set a good example. Accompany him to the bank so you can both make deposits.  If he starts this habit from an early age, he will continue this habit throughout his adult life. He will also see how his money compounds over time. An excellent book I would like to recommend is The Richest Man in Babylon by George S. Clason. It is a great resource for teaching young adults the lessons surrounding a respect for money and the value of saving.

On the flip side, allow him to spend or blow 10% of his money on anything he wants each month. You want his savings and spending to be habitual and sustainable, and not feel like a short-term diet.

6. My final advice for you would be to sit down with your son on a weekly basis and take the time to review his monthly budget and savings plans together. Take an active role in your son’s financial learning. If you feel so inclined, reward him with a small financial incentive by increasing his allowance, or helping him with a purchase by contributing to his savings for it if he actively manages his budgets and stays within his means. Positive feedback and support is the best advice for helping your son become a successful wealth creator.

Best of luck and keep me posted as you grow your son’s future success,


I’m Graduating & I’m Nervous about My Future


I am graduating from college in two weeks and I am nervous about my future. What advice can you give me to avoid the most common mistakes that most grads make after graduating? ~ Ashley, Minneapolis, MI

Hey Ashley,

First off, congratulations on your upcoming milestone!

I can understand why you and so many of your 2013 classmates are probably feeling a little scared and uncertain right now. One cannot open a newspaper or turn on a television today without reading or listening to the growing concerns about the future of the U.S. economy.  In addition, there has been so much negativity and speculation projected upon your generation, but the truth is, these are incredibly exciting times for you.

Like the college graduates of the late 1960s who also faced an uncertain and changing America, your generation is filled with the pioneers of this new technological and global era. Sadly, many young adults today feel paralyzed and ill-prepared to become financially independent because the majority of their parents and teachers lacked the needed knowledge to impart such crucial information.  This might be what compelled you to write to me with your question. As a result, you are being forced to challenge and question the previous generational misinformation you have been provided, if any, in order to find new and improved ways to succeed and thrive on your own terms.

 ‘Emerging adults’ like you must now take the needed steps to educate yourselves so you can avoid the very financial pitfalls that are currently plaguing so many older adults between the ages of 40-60. I’m sure you see them in the world you live in every day, and I’m sure you don’t want to grow up to experience the same financial hardships.

George Bernard Shaw once said, “Life isn’t about finding yourself, it’s about creating yourself.”

If I were your university’s commencement speaker, I would offer you and your graduating class the following advice:

Don’t be afraid to dream and pursue the life YOU love. My philosophy for success is simple: “Do what you love every day of your life while surrounding yourself with those positive people that love and support you.”

The main reason why so many people seem to fail and never achieve success is because they either lack the necessary information and tools to succeed, or they simply succumb to their fears and never make any real efforts to ever get out of their negative comfort zones.

As I said earlier, don’t be afraid to question your “learned” negative fears and emotions. It’s okay to make mistakes and to ask why when someone gives you a suggestion or guidance. That is how one ultimately breaks free of their ‘status quo’ existence.

Unless you learn how to manage these challenges from an early age, they will become harder and harder to fix and correct as you get older.  

So how does one go about creating oneself for life-long success?   

1. Understand that there is a difference between a goal and a dream. A lot of people often confuse their dreams for goals. Unlike a dream, a goal will require some sort of action to be taken within a predetermined period of time in order to be achieved. Dreams are for bedtime; goals and desires are for success!

2. Do not focus on the negative! Nothing kills a goal or desire faster than negativity! You should never be swayed from trying to achieve your goals or desires because someone tells you “you can’t do something.”  You want to always keep your eyes open and see the reality you want and not the reality or shortcomings of others you are willing to settle for.

3. Create a specific action plan for achieving your goals and success NOW! You need to start by being very clear about WHAT YOU WANT to achieve and what specific actions you are willing to take to achieve those goals. You must take the time to create a vision and identify a purpose for your success and goals (e.g. action steps) in order to achieve the positive outcomes you are running after.

For example, to become financially independent, you must create a realistic spending budget that allows you to track all income you make and the expenses you have on a daily/weekly/monthly and annual basis. This will enable you to create good money habits from the start so that you do not overspend. This will also help you learn to live within your means. I also strongly recommend that you start to put aside at least 10% of your monthly income toward future savings.

Clearly defined goals will dramatically enhance your odds for success. It’s imperative that you start taking responsibility for your own actions and decisions immediately. This is the best way for you to grow your success so you can achieve your financial goals and avoid the very financial pitfalls that have derailed some many older adults.

Positively Growing Your Success,