How to Help Set Your Kids Up To Be Financially Responsible

As a parent, it’s your job to teach your children quite a lot in order for them to be successful adults. From driving a car to making new friends, your children look to you for guidance. One of the most important lessons you can teach is how to be financially responsible. 

While children learn math and English in school, they don’t learn how to think critically about money. That’s where you come in. By introducing your kids to savings accounts, debit cards, and interest, you help prepare them for the future.

Do you want to raise financially responsible children? Of course you do. Here are seven ways you can introduce your children to money matters: 

1. Discuss Money With Your Children

I’m not suggesting you lay all your financial stress on your children. You should, however, teach them about money. Show them how you budget, pay bills, and save for certain financial goals. 

Unfortunately, most schools don’t make children take finance classes — not even in college. If you don’t talk to your kids about finances, how will they learn? 

A good way to introduce your children is by taking them grocery shopping with you. Before you go to the store, have them help you create a budget. At the store, let your children pick out some items while making sure they stay within your spending limit.

2. Set a Good Example

If you want your children to spend responsibly, you have to spend responsibly. Set a good example for your kids by paying attention to your own finances. Don’t just throw down your card whenever you feel like treating yourself. 

Make sure you’re not spending beyond your means or making big purchases on a whim. It’s important kids learn to pay attention to where their money is going. The best way you can teach them is by leading by example. 

3. Pay Your Children an Allowance

One of the best ways to instruct your kids in financial responsibility is by giving them the opportunity to manage their own money. Paying your children an allowance is a good way to do that. And if the allowance is linked to their chores, they’ll learn the relationship between work and money. 

Many financial experts recommend parents pay their children an allowance. But at what age? And how much? A poll by CreditCards.com found that the median age to begin getting an allowance is eight years old. The median payout is four dollars a week

Of course, the timing and the amount are up to the parent. Every child is different, so you have to determine when your kid is ready. 

4. Encourage Them to Find a Summer Job

There’s nothing like real-life experience. If your child is old enough, encourage them to get a summer or part-time job. They could mow lawns, babysit the neighbor kids, or bag groceries at a nearby supermarket.

By entering the workforce, your kids will see what it’s like having to work for money. They’ll also learn about being accountable, working with different people, and even paying taxes. 

5. Give Up Control

To teach your children about money, you have to give up your control — at least a little bit. If you’re paying them an allowance, try not to dictate exactly what your kids do with the money they receive. Sure, you can advise and teach best money practices. But at the end of the day, it’s a good idea to let your kids call the shots (within reason).

For example, if your child wants to save their allowance to buy a popcorn machine, let them. Even if you think it’s silly, your kids will learn how to set aside money and budget accordingly to reach their goals. 

6. Help Them Save

According to the Programme for International Student Assessment, U.S. students who have their own bank accounts score 22 points higher on financial literacy than students who don’t. So a savings account is a great tool for promoting the savings habit and general financial savvy. Still, it’s not the only one.

Depending on their age, your child might not be ready for their own bank account quite yet. That’s OK; you still have other options — for example, a clear piggy bank. Kids love visuals! Every time your child puts money in the jar, they’ll get to watch their funds grow. Yesterday, they had one dollar. After a month, they could have $20. 

7. Be Positive 

There are going to be days when your finances take a hit. The AC will go out. Your minivan will need new shocks. There will be days when you stress about money and wish you had a better house, better car, etc. It’s important you don’t express these negative thoughts to your children. 

I’m not suggesting you lie, but kids shouldn’t grow up thinking the future will be nothing but financial stress. So even on your worst days, try to focus on the positives. Instead of telling your kids you can’t afford something, tell them how you plan to afford it in the future. Discuss your goals and how you intend to achieve financial freedom. 

As a parent, you might be a little reluctant to discuss finances with your children. Maybe you think they’re too young to be worried about money. Or perhaps you don’t know the right way to approach the topic. 

While you don’t want to stress your children out, the sooner you talk about finances, the better. By discussing money with your kids, paying them an allowance, and teaching them how to budget, you’ll give them the tools needed to succeed in life. 

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