RAISING
y v
v a
S y
e n
o M
KIDS K
ids may not always listen
to the life lessons we try to
impart, but when it comes
to money, they are an amazingly
attentive audience. T. Rowe
Price, a global investment
management firm, found
in a survey that 65 percent
of kids approach their
parents about money
matters. Provide guidance about
managing money
now and you’ll set
your children on the
course for a lifetime of
financial responsibility
and long-term
security. Mike English,
economic educator
and facilitator
of the parent-
teacher program
“Talking to
Your Kids
About Personal
Finances,” encourages
16 December 2018 washingtonFAMILY.com
parents to teach kids about money as
soon as they can count.

Shape savvy spenders. For Megan
Lynch, whose daughters are 5, 3 and
10 weeks, understanding money is
an important life skill.

“It took me a really long time
to learn to budget and get my
credit on track,” says Lynch. “I
want my girls to know that being
responsible with their finances will
reap better rewards than the instant
gratification of just blowing it all.”
First, distinguish between wants
and needs. Your child will become a
more prudent spender, who fulfills
needs first and saves for wish-list
items to purchase later.

Lynch’s girls use a piggy bank to
watch their money grow. “We are
trying to teach them that saving up
for something special takes time and
patience, and in the end, they are
always proud of how much money
they were able to save,” says Lynch.

Basic budgeting. For novice money
managers, offer budgeting and
planning tips. Trish Batten provides
ISTOCK / GETTY IMAGES PLUS/PAULAPHOTO
BY CHRISTA MELNYK HINES



Money Smart Books
some guidance for her daughter
Kendall, but overall, she gives her the
freedom to make her own decisions
about how she spends money.

to teach kids the value of a dollar
“Recently she had a goal to save up for
a pet, then got invited by a friend to the
American Girl Doll Store,” Batten says.

“She chose to dip into her money for
American Doll items. Her savings for
a pet dwindled significantly for what a
9-year-old is able to save up, and she is
just now realizing it.”
“The Opposite of Spoiled: Raising Kids Who are
Grounded, Generous and Smart About Money”
by Ron Lieber
This book offers a detailed blueprint for the best
ways to handle the basics: allowance, chores, cars,
savings, birthdays, holidays, the tooth fairy, checking
accounts, etc. It aims at helping parents raise kids
who are more generous and less materialistic.

Allowance is another tool for teaching
kids as young as 4 basic budgeting
skills. Make the connection between
work and earnings by assigning chores
that benefit the entire family, like
feeding pets or washing the dishes.

“Smart Money Smart Kids”
by Dave Ramsey and Rachel Cruze
Wondering how much to pay? “Err
on the side of frugality,” says English.

“Keep it low enough so the child learns
some discipline and learns to save.”
Provide enough allowance each week
to cover one of your child’s needs, such
as lunch money and a little extra to go
towards a want. “Whatever is left they
can spend on discretionary items.”
Financial expert Dave Ramsey and his daughter
Rachel Cruze equip parents with helpful methods
for teaching their kids about money. The book
discusses the basics like working, spending,
saving and giving, to more challenging issues like
avoiding debt for life and paying cash for college.

“The Everything Kids Money Book”
by Brette McWhorter Sember
Avoid bail-outs. If your child spends
all of his allowance without considering
his weekly expenses, natural
consequences like brown-bagging lunch
for the rest of the week will quickly
teach him the value of planning and
budgeting his money. If your child
wants to earn more money, offer extra
chores for additional allowance.

Talk family finances. Early on, lead by
example. “Kendall sees when we give
to charity, save money, pay bills, use
coupons and such,” says Batten. “We
talk about what we are doing and why
we are doing it.”
Once your children enter middle
school or high school, involve
them in family budget discussions
to help them understand weekly
expenditures. Divide the week’s
expenses into envelopes. Even if you
wish your finances looked different, “be
This beginner book teaches kids about money and
how to save or spend it wisely. Kids will learn how
coins and bills are made, what money can buy—
from school supplies to games, how credit cards
work, how to save money and much more.

transparent with kids about your family
budget,” English says.

The lesson? When a child sees that
money isn’t in the budget for the
designer jeans she wants, she can save
some of her own earnings to purchase
the jeans herself.

Open a savings account. By the time
your kids are age seven or eight,
encourage them to put birthday
money, holiday money or allowance
left over at the end of the week into a
savings account in their name. With a
savings account, children learn about
interest and how their money can
grow. To get your children started,
consider matching their already
accumulated savings.

Christa Melnyk Hines and her husband
are the parents of two middle school boys.

Her latest book is “Happy, Healthy &
Hyperconnected: Raise a Thoughtful
Communicator in a Digital World.”
washingtonFAMILY.com December 2018 17