Mellody Hobson, a distinguished co-CEO of Ariel Investments and author of the bestselling children's book "Priceless Facts About Money," has dedicated her career to teaching the value of money. Growing up in a single-parent, low-income household, Hobson witnessed firsthand the perils of financial mismanagement. Her childhood experiences with her mother's excessive spending habits instilled a deep sense of confusion and hopelessness, which later motivated her to pursue a career in finance. Through her work, Hobson aims to address what she considers toxic financial habits that parents often pass down to their children.
Hobson's upbringing was fraught with financial instability, leading to traumatic experiences. Reflecting on her childhood, she shared,
"There was just a shortage at all times. We would get evicted, our phone would get disconnected. … There was one time we were living in an abandoned building," – Mellody Hobson
Such experiences shaped her belief that mismanaging family money and failing to demonstrate its value to children can have lasting negative effects. She recalled how her mother prioritized purchasing Easter dresses over paying essential bills, saying,
"My mom would buy Easter dresses instead of paying the light bill." – Mellody Hobson
Determined to break this cycle, Hobson emphasizes the importance of teaching children about money through practical experiences. She advises parents to use cash as a tangible tool for illustrating the finite nature of money. In her words,
"Use cash so they can see that it's finite… and you don't have an endless amount of it." – Mellody Hobson
Hobson believes that showing children how to manage cash can help them understand the real value of a dollar. She once took her children to a dollar store with just $3 each in cash, allowing them to make purchasing decisions. This exercise gave them valuable perspective when they later visited The Lego Store and saw a playset priced at $189.
In addition to her role at Ariel Investments, Hobson is a Harvard University-trained investor and managing partner of the venture fund Inspired Capital. Her expertise extends beyond traditional finance, as she is featured in CNBC's new online course "How to Start a Side Hustle" as a top side hustle expert.
Hobson warns against instilling poor financial habits in children, such as paying only the minimum on debts. She cautioned,
"If you pay the minimum payment, your child's going to do that," – Mellody Hobson
"If you overspend, your child will overspend." – Mellody Hobson