Raising Financial Whiz Kids
By Jennifer Delcamp


If you are a parent, you are probably quite familiar with the all too common question, “Oooh! Mommy/Daddy can I have this?” When you look over at your fresh-faced, hopeful little darling standing there with the toy/candy/movie in hand, you have a decision to make. Do they need it? Can you afford it? Will they end up as a troubled youth, confessing their entire deprived childhood on a daytime talk show one day if you don’t buy them everything that their heart desires? While it may be tough to look into those big pleading eyes and tell them “No!” the good news is this: Telling them “No” sometimes is actually good for them!

Parents often want to give their children everything. It’s a natural tendency to want to give our kids things that we didn’t have when we were growing up. Of course, we want them to be happy. However, it’s important to realize that your real job as a parent is to prepare your kids for the real world. In the real world, we don’t get everything that we want. If we did, I’d be at my beach house in Mexico with cute guys named Rocco and Phillipe fanning me and feeding me grapes while I am writing this article. In the real world, we work for most things we get and no one hears a “yes” answer to every question. The best thing you can do for your kids is to teach them the value of a dollar by letting them earn their rewards.

Here are some tips to help you raise your kids to be excellent money managers:

•     Give an allowance: If your kids ask for something every time you go to the store, start giving them an allowance instead of giving in. Many parents say they can’t afford it, but when they add up what they spend on their kids’ impulse items, it is often much more than they would give for an allowance. It’s amazing to see how fast kids go from spender to miser when their own money is involved. Letting them use their own money will teach them valuable lessons for the future.

•     Help them think about the alternatives: If you little one is caught up in impulse buying, help them see what they could buy if they just save their money instead. say, ‘You could buy this piece of gum now or if you save your money and put it with your allowance next week, you could buy a whole pack.” Teach them the value of saving. If kids learn to save for items they want, they may be much less likely to get into credit card trouble as adults.

•     Set goals: If your kids want a higher priced item, help them understand how long it will take to save for it. If they have a savings goal, it can be a game to work towards it. Every time they put more money in savings, praise them for saving the money and show them how much closer they are to their goal. My 4 year old son has an electronic bank that allows him to set a savings goal and it counts his money as he puts more in the bank. It even gives him fun facts about money as he puts it in. Around my house, if he spots a coin in the couch cushions or on the dresser, he scoops it up and runs to the bank. 

•     Give them choices: If they beg for something on every aisle of the store, give them a choice. Make sure you are happy with either choice but let them decide. “You can have the apple juice or orange juice but not both. Which do you prefer?” If they learn to make choices early in life, they learn that they have control over their life and they learn to deal with the consequences.

•     Don’t bail them out every time: If you little one chooses to spend their allowance as soon as they get it, let them deal with how it feels when they want something and don’t have any more money to buy it. They may feel disappointed but they will get over it. If they find a toy they want but they’ve already spent their money, point out the choice they made. Say, “Remember that candy you bought last week? Well if you had saved your money, you’d have enough for this toy now. However, since you chose to spend your money, you don’t have enough.”

•     Spend your time, not your money: The most important thing you can give your kids is your time. All the expensive toys in the world add up to nothing next to you spending quality time with your kids. As a single mom, I have to get creative because I just can’t afford to buy my son every new toy that comes out. We often have “PJ and Popcorn night.” On this special night, we put on our PJ’s as soon as we get home, we eat dinner together and talk about our day, then we then snuggle up with a bowl of popcorn and watch a movie. I don’t answer the phone and don’t check my e-mail. My son lives for these days.  He stops people in the store to tell them, “Mommy and I are having PJ and Popcorn night!!” The grand total cost for these nights is the price of a packet of popcorn and I know they mean more to him than any toy he has ever received.

It may be hard to imagine but one day your kids will most likely move out and have families of their own. How they manage their money will largely depend on how they were raised and the values they were taught by you. Some kids are raised with excellent money values and still have to learn the hard way. However, I have seen too many little ol’ women in my office that needed financial help because their kids had used their credit cards with their blessing. They just could not tell their kids, “No.” One lady was so afraid that she was going to lose her home because her adult son had charged over $10,000.00 on her credit card that she let him use. I have seen families on the brink of bankruptcy because the parents would not allow the teenage kids to work but they were financially supporting their every whim with credit cards because they could not otherwise afford it.

If you raise your kids to respect the value of a dollar, work for what they get, and learn to save, you greatly increase the chances of them being good adult money managers. Then, instead of financially supporting your kids your entire life, you can enjoy your retirement and know that your kids can take care of themselves. If you’re especially lucky, your kids will be such great money managers that they’ll be able to take care of you when you get older!

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