Courtesy Alan Wolan
It just wasn't enough money. Chris Hogan's oldest boy was 6 years old and was short $7 to buy the expensive Transformer toy he wanted.
It would have been so easy for Hogan to pay the difference. But Hogan isn't just a dad. He works in Nashville, Tenn., with financial get-out-of-debt guru Dave Ramsey, and he knows a teaching moment when he sees one.
So they left the store without the toy.
A week later, Hogan brought his son back. The boy had earned the extra $7 on his own and bought the toy. Gratification delayed. Lesson learned. "I praised him for it," Hogan says. "He still has that toy two years later."
As Father's Day approaches, children reflect upon their dads' influence. Studies show a large part of that influence deals with personal finance.
Simple experiences like Hogan had with his son are how children learn about finances. Parents teach children how to manage their finances, not just by talking to them, but by modeling appropriate behavior. A study at the University of Arizona funded by the National Endowment for Financial Education found that among freshmen entering college, "Direct teaching by parents had the most influence — more than work experience and high school financial education combined."
As the study authors put it, "Parents matter."
The National Foundation for Credit Counseling found that 33 percent of adults say they still learn about personal finance from their parents.
But it isn't always that way.
Alan Wolan, who lives in Los Angeles, says his dad never talked about money at home. "He didn't think it was appropriate to talk about money with a child," Wolan says. "I ended up going to college without knowing anything about money. It was all shrouded in mystery."
Wolan has decided to try to make sure his son, Manix, who is 14, and daughter, a toddler, will know more about finances than he did growing up. He wrote a book called "Moneyology: A Kid's Guide to Money," but the main things he did were, like Hogan with his sons, through example and looking for teaching moments.
Manix says his dad gave him a bank when he was younger that had different compartments for saving, spending and investing. Later, he says his dad encouraged him to figure out his own ways to make money. Manix decided to sell things at school.
With his dad's seed money, Manix bought some exotic Japanese candy. Each $1 package contained five candies, which he sold to friends at school for $1 each. He even had a friend sell some of his candy for a 40 percent cut. "I felt pretty proud of myself," Manix says.
Wolan was not finished there. He opened a custodial investment account in 2008 and encouraged Manix to invest his profits and other money the boy had saved into stocks.
"I told him he could do what he wanted with the money," Wolan says. "He bought Apple; he sold Apple. He bought Disney; he sold Disney. He bought Berkshire Hathaway; he sold Berkshire Hathaway to buy Bitcoins. He is buying and selling as he sees fit. I don't know where he gets the ideas to do this or that, but he does. As long as I don't think it is a mistake, I don't even give my opinion."
Manix says some of his friends now ask him for advice on investing. "I'm extremely grateful that he thought these were things he should teach me," he says. "It isn't all that common that a father would teach a son about investing and saving."
It is common, however, that kids want to know about stocks. T. Rowe Price's 2013 Parents, Kids and Money Survey found that 1 in 5 kids are interested in learning about investing and stock markets.
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