Promoting Good Financial Sense with Your Kids


Any parent or teacher will tell you that the best way to avoid bad habits is by establishing good ones from an early age. When it comes to finances, I believe in leading by example and demonstrating the behaviors you want children to learn. If kids are able to see the positive results, they will be more likely to replicate the habits that got you there. Fortunately for my family, my parents instilled good financial sense in their kids, and now grandkids, to ensure we were ready to become successful adults.

Establishing Good Habits

One of the first things I learned was that you can start building good financial habits at any age. When children are younger, you can explain the fundamentals of saving and take them along on errands to the bank. My parents also had me set short-term goals to save for things I wanted or turned lessons into a game to make them more fun. Now, saving money is an ingrained habit.

As we got older, my dad also wanted us to take part in financial discussions that affected our future. Since we were actively involved in these conversations, we were more invested in it. So when it was time to start thinking about college, I had already been involved in the conversation and understood the financing options that were available to me.

Since I had good savings habits, I put away a lot of my own money as well.  And, I was able to avoid student loans and start my post-graduate life debt-free. Now, I want to do the same for my nieces. My hope is to establish these same habits and create dedicated accounts where they can contribute to their own futures.

Promoting Good Financial Sense Through Consistency

In order to build lifelong habits, you have to follow through with consistent actions. Therefore, a savings jar or piggy bank is a great way to begin showing them how to save money. As they get older, your kids can make larger, regular contributions to their savings or investment accounts. In my family, this usually occurred after birthdays, holidays, and other special occasions with cash gifts.

Giving them an allowance for completing chores or working a part-time job can also help them learn how to manage their money. It provides hands-on lessons about budgeting and the value of their labor. When they earn their own money, it is also a good opportunity to show them how they can build wealth and grow their investments through consistent contributions.

These simple lessons will create a solid financial foundation that you can build on throughout their adolescent and young adult lives.

Providing a Financial Safety Net

I know better than anyone that we aren’t perfect. All humans make mistakes and experience financial setbacks. And, the chances are good that my nieces will do the same.

However, it’s also important that they learn there will be times when you need a safety net. Although your family will play a crucial role, they still have an emergency fund and a low-limit credit card when things arise.

As a parental figure, I know both girls still have a lot to learn. And, I expect to help support them in the years to come. But, I also want to teach them to become self-sufficient so they won’t depend on our assistance forever. But, I know that when my oldest niece leaves for college this fall, she will excel. Thanks to our upbringing, she has enough financial sense to become a responsible, independent adult.

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