This special series is as part of CentSai’s commitment to financial literacy at every level. We’re collaborating with financial education advocate Sam X Renick on a series of short interviews, videos, and tips. In this installment, California State Institute of Technology lecturer, author, entrepreneur, and former general manager of the Los Angeles Dodgers, Fred Claire, tells Renick some of his childhood money memories and shares advice on teaching kids about money.
Childhood Money Lessons
Sam X Renick: What is the most important money habit you learned as a child? Please share the story behind how you learned the habit and what impact it’s had on you throughout your life.
Fred Claire: The most important money habit I learned early in my life was the pure joy of having a job and earning my own money. Even as a youngster, I saw that earning money created opportunities to have a certain amount of freedom for things I wanted to do without asking for help from my parents.
I was blessed to grow up in a very small town (Jamestown, Ohio). With that came opportunities for making my own money in a safe environment. One of my first jobs was a paper route for the newspaper in nearby Xenia, Ohio. Doing the route and collecting the monthly fee put me in a position to enter customers’ homes. Some of these people were far less fortunate than my family. This interaction with people was a learning experience.
My brother and I also formed our own company — the Claire Brothers — trapping and selling muskrats. I still have a metal tag that was used on one of the traps. During the course of my life, I always felt that earning money was a way of gaining freedom to make the best decisions for me and my family.
Further Reading: Check out these business ideas for kids.
The Most Important Money Lesson to Teach Kids
Renick: If you could only teach a child one money habit, what would it be and why?
Claire: The one money habit or trait that I would teach is the understanding of using money in a responsible way. There are many families that are fortunate to have wealth. And with that comes the task of making sure the children know how this wealth came about, because it’s usually a case of hard work and dedication. If money is used in an irresponsible way, it is a waste.
The other aspect of this is to teach young people the value of sharing — the value of helping others less fortunate. The joy that comes from sharing and helping others is the foundation for a life well lived.
Renick: What was your biggest money mistake as a child or teenager?
Claire: I don’t know that I can identify a mistake because I have held jobs and worked hard all of my life. But in looking back, I wish I had acquired a better understanding of the importance of being a student of the world of business and finance.
Our opportunities are unlimited, but we need a foundation and a vision when it comes to acquiring and handling money.
I encourage youngsters to read about the lives of those who have gone on to successful careers in business. The most successful businessman of my generation is Warren Buffett, and reading his story and his thoughts provide important lessons. And the same goes for his business partner, Charlie Munger.
My background is in the world of sports, and I know of no better leader or teacher in the way to conduct your life than Coach John Wooden.
Further Reading: “The 5 Best Investing Books for New Investors”
Smart Money Decisions
Renick: What was one of the smartest money decisions you made as a child or teenager?
Claire: Through the guidance of my parents, I learned the value of both earning and saving money. The lessons proved to be life changing. I never would have been able to attend and graduate from college if I hadn’t prepared myself to work both during the summer and during the school year. As much as my parents encouraged me and wanted to help, there was a point in time when my college education depended on my ability to earn money to pay for my education.
My late mother saved almost every letter I wrote during my college days. Reading through some of them, I came across a letter in which my message was, “Mom, please don’t send me any money at this time because I know you and Dad have your own needs. I can get a job almost every weekend, and things are good.”
Bottom line, respect those who want to help, but be as independent as possible when it comes to earning money.
Further Reading: “I Don't Use My Parents as a Piggy Bank, and Neither Should You”
Teaching Kids About Money
Renick: A variety of surveys indicate that teaching kids about money is a challenge for parents. What would you say are one or two of the primary reasons parents find it difficult to talk personal finance with their children? If you have a suggestion on how they can overcome the obstacle, please share that, as well.
Claire: I have found that the greatest lessons parents teach their children are by showing their own work history and dedication to supporting a family. How many times do we read about a successful person who came from a background in which the parents had to work hard to give their children opportunities?
Parents who are fortunate enough to have money and wealth have to convey that everything isn’t as easy as it may seem.
Children need to be taught to not take wealth for granted. When we give our children encouragement to find a job and work, we're helping them build self-worth.
Personal Finance in Schools
Renick: Why do you believe there is not more personal finance being taught in schools? Do you think schools should teach it? Why or why not?
Claire: That’s a good question. There should be more personal finance taught in schools — at all levels. We can’t go through our lives in a successful fashion without education about being responsible with our income. Things as simple as the ability to write a check (or pay through technology in today’s world), the importance of record keeping, and the value of avoiding debt and paying finance fees. All of these things are critical in our financial lives.
What If Research Is Wrong?
Renick: Cambridge University research indicates that adult money habits are set by age seven. What if the research is wrong and adult money habits are formed earlier — perhaps around the age when the “give mes” set in? What would this mean for families, schools, and the financial education industry?
Claire: With all due respect, I don’t agree with a study that shows adult money habits are set by age seven. As a matter of fact, successful habits can be formed at every stage of our lives. Learning from our experiences and mistakes is one of the most valuable lessons of life. We must continue to learn and we should be open to teaching others from our experiences.
Renick: Are there any additional thoughts you would like to share?
Claire: My suggestion would be for a student to keep his own journal on matters of money and finance. Not only keeping records, but also making notes on experiences. The importance of money comes down to one basic issue: the freedom to do what we choose. Hopefully that involves being the best person possible, taking time to enjoy life, and helping others do the same.
Further Reading: Get the lowdown on Min Zhang's theory of life allocation.
Follow Fred’s lead and give back to the community. Make a family donation of time, money, or both to a charitable cause you support. One of Fred’s favorite causes is the City of Hope, which treats and does research on cancer. He even has an annual charity gold tournament that raises money for the organization.