Saturday, April 20, 2024

How to Jumpstart Your Child’s Fiscal Education

Money. For many, it’s considered a taboo topic. But for your family, it should be a subject that is tackled early and often. I distinctly remember my father taking me to a Boca bank at the ripe old age of 11 and helping me open up my first Roth IRA. It was smart parenting. Now, even my 3 year-old has a retirement account…along with her traditional piggy bank, of course. Educating your kids early about financial responsibility is your responsibility as a parent. And the good news is, you can start now.

“Financial responsibility is not age-specific,” says Tracy L. Cooper, Certified Financial Planner, Director and Southeast Division Sales Performance Manager for Merrill Edge. “Even if your kids are very young, you can speak with them about establishing a budget, the importance of saving and working to earn a little extra money.”

Don’t know how or where get started? Here are the questions I personally had for Merrill Edge as a parent wanting to jumpstart her child’s fiscal education:

How do I teach my child that saving money is important?

While it may be natural for young children to “burn a hole in their pockets” with money, it’s important for them to discover the benefits of delayed gratification. For example, if there’s a toy or a game they have their eyes on, suggest they forgo spending their allowance on ice cream or another immediate pleasure and instead save for a few weeks to make the bigger purchase.

What are some tips parents can use to teach their kids how to save money?

As a parent, it’s likely you expect your kids to clean their room, help with the dishes and other daily chores. But, consider offering them the chance to make extra money by helping you organize the garage, wash the windows or take on another job that goes beyond the usual routine. Getting paid for extra work may help instill good habits and give children more control over saving and spending.

Should parents teach children how to manage a budget? How do I get started?

Absolutely! One way parents can teach their kids how to budget is by showing them how to manage an allowance. Gradually spreading out the timing will help your child understand the need to manage their spending.

Consider giving money every week to the youngest children, at two week intervals for preteens and monthly for teenagers. At that point, you can work with your teenage child on making a monthly budget and plan for spending an allowance or earnings from a part-time job. Once they’re 13 or 14, consider opening a bank account for them, so they can begin to visualize their saving and spending. As they get even older, they may be thinking about buying a car or making another big purchase in the next few years. That takes a lot of effort and planning, so show them how to balance a checkbook or keep track of their account using online banking.

What should I do if my child spends their savings?

If your child spends their entire allowance right away, resist giving in to requests for more money before their next allowance is due. Parents should also use this as a learning opportunity to talk with their kids about how to do better next time, so they can start making smarter choices.

As children grow older, what should parents do to help them be financially responsible in the next stages of their life?

As your kids grow older, you should encourage them to work toward setting aside at least 10% of their income for long-term financial goals. With careful planning and budgeting, they’ll build a solid financial base and good habits for a lifetime.

Michelle Olson-Rogers
Michelle Olson-Rogers
Michelle Olson-Rogers, a native to Boca, is the founder of, a lifestyle website for the stylish & modern South Florida Mommy. Modern Boca Mom features family events, activities, classes, fitness, dining, travel, home improvement and shopping options—as well as a weekly MOMpreneur spotlight! She and her husband Andrew have one daughter, Avery.

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