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Nicole Chan Loeb is a 38-year-old photographer, videographer and mother of two.
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She and her husband prioritize experiences over gifts, so they invest for their children instead of toys.
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They want to teach their children financial literacy and prepare them for a secure financial future.
This as told essay is based on a conversation with Nicole Chan Loeb, a Boston-based photographer and videographer. It has been edited for length and clarity.
My children are 1.5 and 4 years old and I have never physically purchased them gifts for birthdays and holidays.
For birthdays I make a cake, and instead of buying toys and clothes, I do that invest money for them to prepare them for a more secure financial future. Plastic toys and trinkets are temporarily fun, but create mess and waste in landfills.
My mother taught me about stocks when I was growing up
Growing up, my mother would tell me about the stocks or funds she invested in for me. Every week we would take the numbers in the newspaper, plot them on graph paper and tape them to the refrigerator. Us usually invested in investment funds. That was fun, and I especially enjoyed the special time my mother and I spent together. In the same way, I want to teach my children financial responsibility and literacy.
My husband and I met in college in 2004. We both worked in finance and accounting – I was in management adviceand he was involved in internal audits – before deciding it wasn’t for us. I quit in 2010, and he quit soon after, and we both became entrepreneurs. I am one photographer and videographerand he owns one escape room company.
It was a significant risk and I was absolutely terrified. But since my parents taught me financial literacy, I’ve learned how to save so I can feel comfortable no matter what. Plus, the flexibility and fulfillment this lifestyle offers is well worth it.
We give our children investments rather than physical gifts
My husband and I generally do not exchange gifts. When we want something, we just buy it for ourselves – after all, our money adds up – so I find gift giving a challenge. Instead, we share and enjoy dinners, experiences, shows, and vacations. We give each other cards – it’s more about the sentiment.
This year my husband and I got the most out of our children’ Custody Roth IRAs and each deposited $7,000. My children have modeled for children’s clothing lines, toy companies and catering campaigns in my work as a commercial and advertising photographer, so the money is considered their earned income.
We decided to start investing for the kids last year because we realized from conversations with friends that we all wanted topics like taxes, saving for retirement, and smart investing to be taught in high school or earlier. We decided not to wait and agreed to start teaching these concepts as soon as our children could understand the basics.
Furthermore, both my husband and I were fortunate enough to be able to leave school without attending school huge amount of debt because of our parents. These investments will allow our children to graduate without insurmountable debt.
We’re focusing on Roth IRAs for now, but we plan to open investment accounts for them in the following year. If they have not earned any income in the coming years, we will open a custodial account and invest for them that way. Because we both own our businesses, our salaries and incomes fluctuate, so we look at our finances every year and decide how much we want to invest.
Our children love spending time together
My children are young, so the concept of expecting gifts is still being solidified. And they don’t really need anything. We are fortunate to live in a great neighborhood where parents pass on toys when their children outgrow them. I rarely buy large toys or gifts, but I don’t shy away from ad hoc purchasing crayons, markers, kids’ card games, and board games.
Our children are happiest when we spend time together and do things like lunch dates, play board gamesand baking. Happiness comes from experiences and relationships, and less material things promote creativity.
They spend a lot of time outside making up their own games, and we often play with things like sticks, rocks, water, acorns, and pine cones. We want happy, well-balanced children who are not overwhelmed by things and toys and chasing the next new shiny object.
My husband and I find great interest and enjoyment in investing, and we hope our children will too. My four-year-old is very smart, and in a year or so he will understand that you can do it too putting money into specific vehicles to growlearning the concept of delayed gratification.
I’m hopeful that our kids will start earning their own extra income in high school and learn to invest for themselves as teenagers, just like I did growing up.
If you have a unique way to teach financial literacy to your children and would like to share your story, email Jane Zhang at [email protected].
Read the original article Business insider