Mickle & Associates, P.A. - Tips For Raising Financially Responsible Kids (2022)

The above funny video clip, with the famous Michael J Fox, is a parody of going to extremes to teach kids about financial matters. Although this clip was performed in jest, since then studies demonstrate that if you help kids understand money when they’re young, they are more likely to develop sound financial habits when they are adults. Of course, unlike Alex Keaton you’ll want to tailor the information to the kid's age. So I put together some tips for you:

TODDLERHOOD & PRESCHOOL
Talk about how people work to earn money so they can buy things like food, transportation and toys. When you go on shopping trips with toddlers discuss how much various items cost. Point out that buying a more expensive item means less money for other things.

EARLY ELEMENTARY SCHOOL
Explain the difference between needs and wants. Let them push the toddler cart at the food store and provide them with some monopoly money so they can shop with you. Teach them budgeting concepts. Give them a small “piggy bank.” It might help if it’s a clear container so kids can see their cash grow. Consider offering a small reward when the stash reaches a specific level. Don't go Alex Keaton on them just yet but just short casual conversations on these things goes a long way.

LATER ELEMENTARY SCHOOL
Decide how you’ll handle allowances. Some parents choose to remit an allowance only if certain chores are completed. Others provide it no matter what and discipline the child in other ways. Whatever your approach, teach your child to budget and have him or her set aside part of the allowance to introduce the concept of savings (especially college/trade school savings).

MIDDLE SCHOOL
If you can, gradually increase your child’s allowance, use this opportunity to discuss financial concepts like interest, inflation and pay raises tied to performance. If your household budget is tight, suggest earning extra money through grass cutting, art, babysitting or other jobs to pay for class trips, athletic gear, summer/sport camps, school dance, or etc.

HIGH SCHOOL
If possible, encourage kids to read books and write you a simple 2 - 3 page book report in exchange for money. You pick the books and for every book report they write you pay them an agreed amount. Just remember it is not so much about the quality of the book report, but will they accept a project and follow it through. However, don't accept sloppy work either or you'll be counter productive in behavior building. Other options include suggesting your child get a part-time job. Continue to reinforce the importance of savings — whether for further education or some other goal, like transportation. Discuss how to use credit wisely and how interest compounds over time.

Maintaining an open dialogue about finances and modeling sound money management can help you raise financially responsible kids. I’d be happy to provide additional ideas that I've garnered over the years, just drop me an email.

You can find more articles like this on my blog section here: https://www.mickleinc.com

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