The Holtz Group

How To Raise Financially Responsible Children

We all want what’s best for our kids and will do everything we can to ensure we set them up for successful adulthood. Just like sending your kid to school, enrolling them in swimming lessons, or proofreading their first resume, teaching them how to be financially responsible early can help set the course for a happy, secure, and independent life. Keep reading for some quick tips on how to raise your children to be financially responsible.

Provide an Allowance

The easiest way for a child to understand the responsibility of money is to provide them with some of their own. Giving your children an allowance as they grow up can help teach them to work hard for their money, learn how to save, and prioritize spending. Start by rewarding younger children with a small weekly or monthly sum for good behavior, and assign them more age-appropriate chores and errands as they grow. For example, elementary school children can be monetarily rewarded for keeping their room tidy and displaying proper manners. At the same time, tweens and teens can be tasked with heavier chores like mowing the lawn, running errands, or doing the laundry.

Involve your Child in Money Discussions

Managing your finances can be a stressful experience, no matter your age. Though you may be hesitant to include your child in conversations about money, it’s important to involve them (when appropriate) to teach them the ups and downs of managing finances. It doesn’t have to be complicated. For example, while they’re young, take your child shopping for groceries and point out price tags, deals, and sale items. Then, let them use your cash to pay for items at the check-out to introduce the transaction of using money to pay for household items and goods. As they mature, you can involve your kids in family meetings regarding upcoming payments and budget assessments; you can even discuss the method you’ll be paying for their college if they choose to attend. Involving your children in money matters will provide them with an insight into day-to-day personal finance and can present an opportunity for you to reflect on your financial habits as an adult.

Teach your Children About Credit

Using and managing credit is an essential aspect of personal finance; thus, teaching our children how credit cards work is important, so they don’t mistake them for free money as they age. In addition, introducing the concept of credit cards can help them understand the benefits of a good credit score and the consequences of not using them correctly. An excellent way to introduce this financial concept is to show your kids your credit card. Explain how it has a set limit, and the money on the card is money you are borrowing from them, with the understanding the funds will be paid back each month (ideally, of course).

Need Financial Advice?

Check out our previous blog post on Essential Tips for Beginner Investors. In addition, if you need personalized financial advice, our team is always here to help—contact us today to book an appointment!