Being a parent is one of the most rewarding vocations of your life, and probably the most challenging. You want to raise your children well; teach them to be strong in their faith, values, and convictions; and be prepared for their future. We spend time showing them how to throw a ball, do cartwheels, and hold the door open for people, but do we spend as much time teaching them about money and how to use it wisely?
When kids are little, they can start to understand that money is how you pay for things you need and want, as well as a way to help others. They can hand cash to the store clerk to pay for groceries and receive the change back. They can put money into their piggy bank from birthday gifts, allowances, or small extra jobs around the house. They can also understand giving by putting change in the offering basket at church or the jar on the store counter raising money for someone in need.
Kids are never too young to learn how to save, spend, and share. When your kids are about 8-10 years old, have them start the habit of writing down things they want to save for. They can break it down into short-, mid-, and long-term goals. Short-term might be small items like treats at the convenience store or small toys. Mid-term might be things like new archery equipment or a camera they want and need to save for a little bit to be able to buy, and long-term might be a car, college, house, etc. When they receive money for gifts, babysitting, or other small jobs, they can put some cash in their wallets for the short-term wants and sharing, some into their piggy banks for the mid-term things they are saving for, and some into their savings accounts for the long-term goals.
Keep the list of goals in a common place to help you all remember what thegoals are and to encourage each other toward the goals, and keep in mind thatgoals can be changed! You can have conversations about how much goes into whichpot because each family will have different circumstances, but it’s a good ideato have a consistent approach so the kids know where their money is going aheadof time.
As your child gets older, you may decide they need to be responsible for some of their own expenses, like clothes, cellphones, car insurance, etc. A good time to start this is when the get their first job and have some income of their own. Continue encouraging them to save, spend, and share. Start a checking account and possibly a credit card that they pay off each month to start building credit. The habits they learn now will be incredibly helpful as they prepare to live on their own and be responsible for themselves.
Whether your kids are 3, 13, or 23, it’s a good idea not only to have conversations about money, but to show them how to use it well. Remember, most things are learned by watching what you do, not what you say, so you may be doing some soul-searching of your own attitude and habits when it comes to money as you teach your children. Reach out to your advisor for help with these conversations, as well as tools and resources to get your child on the path to financial confidence!
Jessica Foss
CFP®, BFA™, CKA®, APMA®
Jessica Foss is a Financial Advisor with TruStone Wealth Management, a private wealth advisory practice of Ameriprise Financial Services, LLC, in Roseau, MN. She specializes in fee-based financial planning and asset management strategies, and has been in practice for 13 years.Together, we can work to keep you on-track towards your financial goals.
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