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  • Children

    5 Great Ways to Teach Your Kids About Money

    One of the most important lessons you will ever teach your child is how to handle money–and that’s a lesson that begins in early childhood. By working with your child now, you can cement the financial lessons you want them to learn early in life. Ultimately, this will help them manage their finances much more successfully as adults.


    1. Start as you intend to go forward.

    As adults, we’re encouraged to put 10% of our income into savings each paycheck. Starting your child off this way is a great opportunity to cement the concept of savings in their heads while they’re still young. When your child receives money, whether as part of their allowance or as a gift, encourage them to put a percentage of it in their savings account for later use. This can be a long-term savings account to help them pay for expenses in college or a short-term account that will allow them to save up for big purchases that they really want. Over time, that account will really start to add up!


    2. Let them save for big purchases that they really want.

    Avoid the temptation to buy your child everything they want the moment it releases. Instead, give them the opportunity to save the money they’ve earned and been given–an allowance, birthday money, even tooth fairy money–toward those big purchases. While it’s perfectly fine to give your child gifts, the satisfaction of working for something they really want is a gift of its own.


    3. Try a unique take on chores and allowance.

    Instead of offering your child a blanket amount of money for the chores they’re assigned to complete each week, allow your child to decide how much they’re going to earn. Assign a specific payment to each chore: a quarter for making their bed every day, for example, or a dollar for cleaning out the cat’s litter box. In many professions, your child will find that they are able to earn based on what effort they put forth, so learning early how to plan ahead when they want to make a purchase will benefit them in the long run.


    4. Talk to your child about your spending habits.

    Many young children, in particular, start to think that their parents are made of money–especially since “money” comes in the form of a plastic card that is scanned at checkout, rather than actual cash that has to be handed over. Instead of creating the illusion that Mom and Dad always have plenty of money, let your child see your thought processes. Explain that you can’t stop for dinner out on a particular evening because you need to be able to pay for their latest activity fees. Discuss why you coupon or shop sales at the grocery store. This will help your child develop a more mature perspective of money and may actually help increase their own financial responsibility.


    5. Discuss responsible purchasing.

    For some kids, especially those who only receive money for gifts rather than having a regular source of income, money in their hand is money that they should spend as soon as possible. They rush out and buy the latest knickknack or the first interesting toy that they lay eyes on–and promptly lose interest in it within a matter of days. Instead, discuss responsible purchasing with your child. Encourage them to hold on to their money until there’s something that they really want to buy, rather than spending indiscriminately simply because they can. Talk through purchases before they make it: is this something they really want, or something that just caught their eye? If possible, encourage your child to wait a day before making a big purchase so that they have time to really think it through.

    Teaching your child financial responsibility is a process that lasts throughout their childhood and into their teen years. The younger you start, the deeper you can embed that sense of responsibility. The more you talk about money with your child, the greater the likelihood that they will develop the skills they ultimately need to manage money successfully.




  • Children

    Raising Financial Literacy in Your Teens

    It’s no secret that financial education is not taught in school.  May of us found ourselves in poor financial health at some point in our adult hood, not for lack of trying, but simply for not knowing any better.  This is why it’s important to teach our children about money from a young age.  Start them young, especially during the critical teen years, and you can improve their financial responsibility and increase their ability to handle their money successfully well into their adult years.

    1. Give your teen more responsibility.

    During the teenage years, it may seem as though your child constantly has their hand out waiting for you to hand over more cash or write another check. There are mounting school expenses, the price of gas, and sporting equipment or fees for clubs. You may prefer that your child focus on their other responsibilities, rather than holding a job of their own, but that doesn’t mean that you have to constantly have extra cash on hand! Instead, set out a specific amount of money for your teen to use each week. For example, you might give them their lunch money a week at a time or hand them lunch money and gas money at the same time. This gives them the opportunity to learn how to budget and manage their spending.

    2. Don’t always bail your teen out.

    As a parent, you don’t want to see your child suffer–and in many cases, their suffering is an inconvenience for you, too. They ran out of gas money before the end of the week, so either you have to drive them around everywhere, or you have to give them the money.  Sometimes, however, your teenager needs to experience the natural consequences of their financial failures. Not being able to drive for a few days, or at least being restricted to only the driving you want them to do instead of having the freedom to come and go more freely, is a great reminder that next time, they should save that extra money for gas.

    3. Let your teen have opportunities to earn.

    If you don’t want your older teen to have an after-school job, have them explore doing odd jobs around the neighborhood in their spare time. They might babysit for a neighbor, shovel in the winter or cut grass in the summer. Your teen needs to have a source of income that will allow them to manage some of their money on their own–and increase the number of things that they’re able to pay for on their own, rather than relying on you to foot the bill. Not only is it building work ethic but they are more likely to want to save and better manage money they worked for than money simply given to them.

    4. Match their savings.

    A child who was eager to put money into their piggy bank each week may transform into a teenager who can’t seem to hold on to a single penny by the end of the month. In order to add a little extra incentive, offer to match your child’s contributions to their savings account.


    Financial management skills are skills that will last your teen for a lifetime. By setting down a firm foundation now, you prepare your child to live on their own.  Offering more financial freedom and responsibility throughout the teenage years will help shape your child into a more financially responsible adult–and that means you’ll be able to enjoy the confidence that your child will be able to take care of their finances throughout their adult years.