Kids
Raising Money Savvy Kids
No matter how old or young your kids are, it is not too late to start giving them the tools to make smart decisions about money. Whether you are a parent, grandparent, teacher, aunt, or mentor these are important concepts.
Why It's Important
Talking to kids about money can be an intimidating task, but it is a very important one. Kids will learn things from many different sources, friends, schoolmates, TV. To ensure your child learns important concepts and values regarding money they need to hear it straight from you. Your role as a Financial Caregiver includes teaching children the value of money, modeling a strong work ethic, and acting as an intermediary between your child and the world and the increasing advertising and dangers directed at kids.
Giving children a strong understanding about money puts them on a path to financial independence and you on a path to financial freedom. Your children's future financial independence can foster their success and happiness in life.
Allowance and Earning Money
Decide on your family strategy--whether you are going to give an allowance or not, it’s a good idea to keep it consistent between children of the same family.
When your children want to earn their own money consider:
- Keep it age appropriate
- Encourage entrepreneurial thinking
- Identify children’s talents and skills
- Use activities kids enjoy
- Team up with other kids
- Neighborhood jobs
Saving and Budgeting
You can start teaching the concept of saving something “for later”, before introducing saving money. You might also consider illustrating how a percentage of gifts and earnings saved can grow to show the power of compounding and how money can make money on its own.
Start small to demonstrate how planning and budgeting can be the secret to building wealth and independence. Life lessons can teach your children to budget, not only money, but time and resources. Planning helps kids become smart consumers and understand the value of their money.
Raising a Smart Consumer
Young children are increasingly the target of advertising and marketing because of the amount of money they spend themselves, the influence they have on their parents spending (the nag factor), and because of the money they will spend when they grow up.
Helping kids see through the marketing aimed at them and providing access to cash with guardrails helps kids develop good spending habits. Teaching children what credit is, how it works, and what the risks and rewards are will set them up for future financial success.
If you have teenagers preparing for college involve them in the borrowing decisions and financial aid planning so they fully understand the cost of student loans.
Investing
When your child is ready to branch out from a simple savings account, introduce the concept of being an investor and present the rewards and risks that go along with it. We are here to help.
Starting small, taking your time, and long-term thinking are all aspects of investing that kids can benefit from.
Using a compound interest example, let’s suppose your child sets aside $7.50 a month starting at age 10, earning an average of 7% a year. By the time they are 65, they would have $51,800. If they didn’t begin until age 35, they would have only $8,250.
The moral: Starting early and thinking long-term pays off.
Pitfalls To Avoid
- Attempting to “buy love”. Giving kids your time is more important than anything you can buy.
- Regularly putting “play” first and not demonstrating a good work ethic.
- Putting an overemphasis on money and material things. People are to be loved and things are to be used. The other way around doesn’t work.
- Double standards between children and parents.
- Harmful family attitudes towards money such as arrogance, snobbery, or jealousy.
- Micromanaging and not letting kids make age appropriate decisions.

Accounts Children Can Fund
- Piggy Bank
- Basic Savings Account
- Savings Bonds
- IRAs/Coverdell Educational Savings Accounts (ESA)
- 529 Plans
- Introductory Stocks
- Kid-Friendly Mutual Funds

Accounts You Can Set Up for Your Children
- Custodial Accounts
- UGMAs
- UTMAs
- Trusts
- Joint Accounts

Insurance Needs When Raising Your Family
Growing your family can increase your insurance needs. This guide can help you review your insurance to make sure you're protecting your family.

The Half Million Dollar Baby
