Teaching Financial Responsibility to Your Children

Brenda S. McDaniel, Program Analyst, Personal Financial Readiness Program
(Military Community and Family Policy)

Your kids learn all about reading, writing, and arithmetic in school, but when it comes to saving and spending, it’s your turn to be the teacher! Kids of almost any age can learn the basics of smart money management, so start early and provide ongoing lessons and guidance as they grow to get your kids on the path to lifelong financial security.

You can help very young children learn the value of a dollar by explaining the concept of work in exchange for pay and assigning simple tasks they can do to earn money. Whenever children receive money, whether as pay for chores or as a gift for a special occasion, teach them to save some of it while allowing them to spend some for fun on a trip to the supermarket, bookstore, or toy store.

When you’re out and your kids seem to want to buy everything they see, help them to learn impulse control and to shop smart by pointing out a toy or other item they once really, really wanted but lost interest in soon after they got it. You’ll find a wealth of additional information and fun ways to teach young children about money at Sesame Street’s For Me, For You, For Later website.

For older kids with more money and more expensive “toys” (video games, cell phones, computers) to buy, smart money management is even more important. Work with preteens to figure out a savings plan and learn the basics of banking. Older kids are also better able to learn about delayed gratification and how to save up over time to buy a special item later instead of spending their money as soon as they get it. Shopping trips are great opportunities to teach older kids about sales, comparison shopping, and smart buying decisions.

Team up with your child to make a commitment to “saving money, reducing debt and building wealth over time” by taking The Saver Pledge at the Military Saves website and encouraging your child to take the Military Youth Saves Pledge. Check out the Military Youth on the Move and Military Youth Saves websites for more guidance on teaching your “tweens” about money.

With high schoolers, cars and college often enter the picture. If your high-school age kids work part-time jobs and earn a significant amount of money, make sure they know how to handle it responsibly. Help them to open savings and/or checking accounts so that they can establish a relationship with a bank and keep their money in a safe place where it can also earn interest.

Talk to them about their savings goals and potential “big ticket” purchases like a computer, car, or college, and help them to understand and establish credit. Explain what credit and credit scores are and how important it is to pay bills on time and keep debt under control so that they’ll someday be able to rent an apartment or secure a loan for a car or house on their own. You might want to make your kids responsible for their cell phone bill, car insurance, or car payment to help them learn to budget their money to pay bills and prepare them for life as a financially independent adult.

The lessons you teach your kids about smart money management are ones they’ll apply for the rest of their lives. We would like to know how you are teaching your kids about saving and spending wisely.  Please join our discussion and let us know what you have learned. By laying the groundwork now, you can give your child a head start on a long and healthy financial future!

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