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March 1, 2021

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Teaching financial responsibility

Some ideas for your children

By Faith Investment Services intern, James Garrett
Being financially responsible is a very important aspect of life. By doing the right things with your money, you can live a fruitful time on earth from beginning to end. But do you remember when you learned about how to manage money?

Learning about financial responsibility is important for everyone to understand, even children. But how do you teach them?

Children and young adults may find it difficult to grasp the concept of money. But by starting to educate at a young age, it can make understanding the subject a little easier.

Where do you start? Here are some ideas to begin putting in your child’s head:

Help them see and understand the importance of saving. Give them a piggy bank or a jar and watch the money increase. Show excitement when they put money in their bank. This will give reassurance that saving is important and fun to do!

Make them work for their money. By giving children a lot of freebies, it will make it harder to understand that money is scarce and valuable. Giving allowances for doing chores and other beneficial things helps to reassure that money is something to be earned. 

Physically show them that things cost money. If they want to buy a toy or candy, take money out of their piggy bank and have them hand the money to the cashier. This shows them that their money can be used for things they want, but with the consequence of lowering the amount they have stored up.

What about teenagers? They’re getting close to joining the real world. Having more in depth conversations and practices with teens can help solidify financial responsibility.

Open up a bank account for them. This gives a sense of responsibility farther than what a simple piggy bank can. This also gives them a taste of the real world and can help them prepare to manage a larger account in the future.

Have them play around with budgeting. There are several apps you can download on your smart devices that help make the process simple and easy. And if you’re comfortable, you can even show them the ropes of your own family budget. Being comfortable with budgeting at a young age will make it that much easier for them when they are an adult with their own responsibilities.

Encourage them to save part of their paycheck. If your teenager is working while living at home, they probably don’t need to spend all their income on essentials like rent or food. Instead of them blowing all of their money on activities and friends, have them save a percentage each time they get paid. This money can help to pay for college or buy a new car. No matter what it goes towards, this will teach the importance of saving and will help them with expenses in the future. 

Talking about money with your children can be difficult, but it is not impossible. By starting at an early age, you can help to create an informed child that will eventually grow into a financially responsible adult.

Advisory Services are offered through Creative Financial Designs, Inc., a Registered Investment Adviser, and Securities are offered through cfd Investments, Inc., a Registered Broker/Dealer, Member FINRA & SIPC, 2704 S. Goyer Rd., Kokomo, IN 46902. 765-453-9600. Faith Investment Services is independently owned and not controlled by the CFD Companies.