It’s Never Too Early to Teach Financial Responsibility

One of the many jobs we have as parents is to raise financially responsible and literate children. But it isn’t always easy. Thankfully, there are several small steps you can take to help your children better understand personal economics, even when math isn’t your strong suit.

Below, today’s Eagle and Bear Economist guest post by Patrick Young presents tips for parents on how to raise fiscally responsible children.

Open a bank account

If your son or daughter is at least 13 years old, they may qualify for a joint checking account, complete with a debit card. While this is a great way to teach them how to spend responsibly, consider opening a savings account as well to show them how to segment their money into two categories: spending and saving. Make sure to put at least one other trusted legal guardian on their account with them so they can access their money in a pinch if you’re not available.

Teach them about big expenses early

Your teen or tween may be a decade or more away from homeownership, but it’s never too early to explain the concept of using credit responsibly and saving for the big expenses in life, such as purchasing a house. Talk to them about what a loan is and how interest rates work. If you’re not quite sure yourself, spend some time researching mortgage interest rates today and brushing up on the difference between VA, FHA, and conventional loans. Talk to your children about affordability and discuss reasons that they should not live outside of their means (for example, if their home is too expensive and their income declines, they may lose their investment). Teach them about the real estate market and how major assets can help them build their personal wealth.

Show them how to make their own money

Kids like money, and they especially like your money. But, mom and dad can’t always have a revolving wallet. As your children get older, talk about how to earn their own money. They might, for example, start their own small business mowing yards in the neighborhood or making jewelry to sell to family and friends. If they are dead broke and need capital, teach them about the different types of investments, from angel investors to crowdfunding. You might also create a loan or microloan application for them to fill out. This is also a great opportunity to let them see how interest works on a small scale. PTMoney mentions several other great income opportunities for teens.

Use fun charts and graphs

Many children are visual learners and may not fully grasp the concept of saving in an abstract environment, such as a bank account they can’t see and feel. For these kids, consider using their favorite candies and mason jars to help them see how close they are to their savings goals. (You can buy giant bags of Skittles online!)

Let them set goals

Let children set financial goals for themselves. This could be something as simple as earning enough money to buy a pack of Pokémon cards each week or buying their own PlayStation or a new bicycle. Another idea here is to have them save for the difference between “standard” items and luxury items or name-brand clothing.

Your children will mimic everything you do, and you are their best teacher. Although money isn’t everything, it’s necessary throughout their lifetime, especially as they enter adulthood and go to start a business or buy a home. Teach concepts that will help them ease into these processes early, and your children may not struggle or stress their finances nearly as much as they will be prepared and armed with knowledge.

By Patrick Young from


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