Women’s Series: Teaching your kids about money
Teaching our kids about money is challenging. Figuring out what examples and methods work the best is difficult as well and different strategies will work with different families and kids. Teaching tactics will need to vary for different personalities so each represents a starting point only: try, improvise and get creative are the rules.
My daughter is four years old and she is already very interested in money. We have started talking to her about what it’s like to earn money. Below are some ideas for different age groups and some that we are applying now.
- Buy a piggy bank and allow them to put money in the piggy bank to “save for later”.
- Allow them to “buy” something themselves with their saved money.
- Talk about how money is used and how it’s exchanged for items we want or need to purchase.
Kindergarten and/or school-age children:
- You could start working on chores associated with an allowance.
- Chores that link to an allowance can consist of normal household duties or only those duties that are above and beyond the household duties. That is for every family to decide.
- The chores are a way to teach your child that they need to do something of value to someone else to earn money.
- Once the money is earned you could try the “three jars” approach; one jar for saving, one jar for donating and one jar for spending.
- You can either have a set amount of what’s supposed to go to each jar or you can have your child choose. I have not started an allowance with Gabby yet, but when I do I will be telling her how much to put in each jar because I want to teach her the normal percentage of income she should be saving and donating versus what she should be spending. Plus, she’s young still and will need guidance.
- It’s also not a bad idea to start talking to your kids about bank accounts and introducing them to the bank. I had a client tell me her kids love going to the bank and are more willing to save their birthday or Christmas money if they get to go the bank and make an official deposit.
- Everyone has their own opinion of working while in high school, but I’m going to defer to what my parents did with me because I do think it was beneficial for me as a teenager.
- I think that teenagers should have a job with a boss other their parents with a specific schedule to follow.
- I think it’s important at this age to start being responsible for budgeting their own earned income, having to answer to another adult and having other responsibilities other than housework.
- A pre-teen can also start doing minor work for neighbors such as mowing lawns or babysitting to help transition to the bigger job when they start driving.
- Some of you may be surprised (or not if you know my mother); she had me start working at age 15 outside of the home and she made me ride the Hall County Transit or otherwise known as the “Red Rabbit.” It was probably one of my most embarrassing teenage moments, but she made sure I had a job and a way to get there! No excuses for me!
- Once your child is working a real job you may want to give them the responsibility of buying their own clothes, buying their own school supplies or buying their lunch at school. This will give them a glimpse of having to budget for things they want versus things they need.
- At this time they should definitely have an official savings account and checking account at the bank in their own name with their own money that they have earned.
- Some families have even included their teenagers in the household monthly budget. My parents did not do that with me, but I can see a benefit. You need to do what works best for you and your teenager.
- In my opinion kids at this age are now “adults” and should be budgeting all on their own and feeling the consequences of great budgeting or not-so-great budgeting.
- This is my personal opinion and I know some women don’t agree, but I do think college students should be working. There could be a circumstance with college athletes, but working over the summer could work.
- College years are the years kids have the opportunity to live in the real world and start making adult financial decisions.
I’m definitely not an expert on the ways to teach children about money so I did use a Wells Fargo Advisors piece to help me write this piece. The majority of the Teenage Years and College Students were my thoughts.
If you have any questions or have any ideas on a newsletter please let me know.
The next newsletter will be about: What to do when you have a baby?
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Any opinions expressed are those of Christina Jones and Wells Fargo Advisors and not necessarily those of Raymond James.