Use real-life experience as a guide
Sharing and celebrating real-life experiences provides an opportunity to teach important financial lessons and help your kids take big steps toward financial independence. From managing an allowance to helping plan for college, these real-life events are a way to bring basic financial concepts to life. They also give your kids an opportunity to take pride in their accomplishments.
This section focuses on a handful of universal milestones, including:
To get started, here are some tips to keep in mind as you help your kids successfully handle whatever financial challenges life brings them:
Want more ideas? Read answers to real questions about kids and money.
- Give your kids an allowance and encourage them to use it as they see fit. It's one thing for your daughter to ask you to buy her designer jeans, but it's quite another for her to pay for them with her own money. Letting your kids choose how to use their allowance helps them place value on money. As your children get older, their allowance presents a great opportunity to learn about budgeting and making choices.
- Talk with your kids about financial tradeoffs. Explain that you're forgoing an expensive vacation in order to put some money away for the future, for example.
- Give them an incentive to save. An effective way to do this is to match your kids' savings. For example, you could contribute 25 or 50 cents for every dollar they put in their savings account. You can also teach them that once they're grown and out on their own, it's likely their employer will make matching contributions like this to their savings in a company-sponsored retirement plan.
- Involve your kids in household financial management. At the grocery store, for example, ask your kids to comparison-shop for cereal. Older kids can help you with administrative tasks like bill paying, so they can get an idea of what it takes to run a household.