Raising a financially responsible child is something that doesn’t happen overnight.
It takes years and years of teaching, learning, and applying those skills to their daily life.
However, there are certain things you can start to do today to ensure you are raising a financially responsible child in ten years.
6 Things to Do Now for a Financially Responsible Child Down the Road
1. Allowance
One of the easiest and most common ways to teach financial responsibility to your child is to give them an allowance.
You can set the rules on the allowance you give your children. For example, do you give them an allowance regardless of whether they do their chores, or is their allowance tied to chores that they complete?
You also can decide how much you give your child. If they are young, a few dollars is probably enough, but you may have to increase this as they get older.
One of the best ways to teach financial responsibility with an allowance is to have a three piggy bank system that your children learn early.
For example, let’s say you give your child $12 a week. They have to put $4 into a saving piggy bank, $4 into a spending piggy bank, and $4 into a giving piggy bank.
This will teach your child the importance of saving money as soon as you get it. This will hopefully translate into their adulthood, and they will start allocating their money into savings, spending, and giving.
2. Talk about money
It’s easy to avoid talking about money with your children, but it is important to talk to them about it.
Talking about money will break down the stereotype around it.
When you go to the grocery store, talk to your child about how you budget for a certain amount and that you use coupons.
Your child may want to help out with cutting coupons or looking for sales on cereal when they go shopping with you. Talk about your money habits and how money works, because they will learn the most from actually seeing this in use.
3. Games
Games are another great way to raise a financially responsible child.
You can play classic games like Monopoly or Life that teach children valuable lessons with money. For example, do you choose to spend all of your money, or do you choose to save it and buy larger properties?
In addition, any games that have money, coins, or resources to trade (like Catan) are good ways for your child to start learning different ways they can use money.
You can also teach your child financial responsibility through video games.
Many video games reward you for completing certain tasks that you can use for new tools or outfits. Some games also have options where you can buy these upgrades, but teach your child patience to buy these upgrades with the points they have earned, instead of just buying them.
4. Books
Reading is a great way to learn, and reading about finances is a great way to teach financial responsibility.
You can go to your local library to find parents’ books about finances and age-appropriate books about finances. For example, if you have a young child, find a fiction picture book that talks about money, like “The Giving Tree” or “The Little Red Hen”.
If you have an older child, you can find a chapter book that talks about finances, like “Johnny Tremain”. Then, once they are in high school, they can begin to read financial literacy books like “Freakonomics” or “Learn to Earn”.
Read these books with your child so you can discuss it with them. This will help you and your child understand the book’s importance and how a character handled their money.
5. Online resources
Find a way to make learning about finances fun by utilizing online resources like an interactive website that helps teach your child about money skills.
These websites have games, activities, and quizzes to make learning more interactive. Also, make sure to find organizations that specialize in finance and education, like the Next Gen Personal Finance nonprofit organization.
They provide free online games to help your child learn about investing and budgeting. The National Endowment for Financial Education also has free online materials through Smart About Money.
Along with websites, there are online resources that you can download for your child.
For example, the Council for Economic Education has its own Family-At-Home Financial Fun Pack. You can choose the appropriate pack for your child and download games, activities, and worksheets that you can complete with your child.
6. Make it part of their everyday life
The best way to raise a financially responsible child is to make money part of their everyday life, from the games they play to the books they read.
Then, if you start teaching them to be responsible with their own allowance, they will take those skills into their adult life and already know that money should be allocated in certain areas.
Updated from Oct 21, 2023
The First line:
Raising a financially responsible child is something that does happen overnight.
…it DOES happen overnight…
good catch, Lauren! That has been corrected, it definitely DOESN’T happen overnight.