Contact Us Today!

Are You Teaching Your Kids Financial Independence?


Did you know that most people’s attitudes about money are formed before they turn 13 years old?

The money mindset that a young child establishes, often based heavily upon the way that their parents view money, stick with them through adulthood. Think about this: if you have children that are about to or have just begun kindergarten, you are already shaping the way that they will think about money for the rest of their life.

If you want your children to have a secure foundation and understand how to manage money, you have to start early. I know this might sound daunting but it’s really not as difficult as you might think. There’s a simple way for you to teach your kids how to save, spend, and give, and it will even make your life easier in the process.

It’s almost a no-brainer: Give your kids money to manage

Okay, I know that when I say it like that it sounds a little bit absurd. How is a 5 year old going to understand how to properly use $5? Do they even understand the value of $5?
Kids will rise to the expectations that you set for them and often times they’ll prove that you underestimated them. Still, when you give them money, give them boundaries along with it.

Ever since I was 5 years old, my parents have given me a weekly “allowance.” This is a method that you can use for your children as well to help them grown into financially savvy adults.

The rules were pretty simple:

1) You get your age in dollars

2) $1 goes to charity (example: church)

3) The rest is split in half: ½ is saved, and ½ is yours to spendBased on these 3 simple rules, I got $5 a week as a 5 year old. $1 went church with me every Sunday. The remaining $4 was split in half, leaving me with $2 saved and $2 to spend. My parents explained to me that the saved money was being put away for something far, far into the future – a house, for example, rather than a car. I could spend my spending money on whatever I wanted. (Which, when I was 5 years old, was usually candy or Barbie dolls. My priorities were definitely in order.)

A few major benefits that came out of this system:

1) Your children will have money in a savings account and understand delayed gratification. They will understand how to save money, whether it’s for something occurring in a few months, like that weekend beach trip, or a few dozen years, like retirement. [Speaking of retirement, my parents have already helped me set up a Roth IRA to start saving and to teach me the power of compound interest (but that’s a story for another time).]
Delayed gratification is a something that fewer and fewer young adults understand since we live in a culture where everything happens instantly. Using the weekly allowance method, it’s easy to teach your kids delayed gratification: when I was 5 and wanted to buy that new $10 Barbie doll, I knew that I would have to save my money for a few weeks rather than paying $1 for a Kit Kat every time I saw one at the grocery store.

2) Your children will understand the power of giving. Whether it’s church or the local animal shelter, your kids are learning to give to causes that they support. They are learning to understand the joy of giving and feeling that their contributions are making a positive difference in the world.

This will help your children throughout their lives. If they save/earn/inherit large amounts of money one day, they will understand how to give back to their communities and make the world a better place.

3) You will never have to argue with your children in a store again. If your child wants something, he or she can buy it. As long as he or she has the money to pay for it and is willing to do so, of course. Usually, when kids need to use their own money, they suddenly decide that they have enough Barbie dolls and don’t need to spend money on another one.

This is quite possibly one of the biggest benefits of the system for you as a parent. Seriously, just think about how many grocery store meltdowns and toy store tantrums you can now avoid. All you need is one sentence: “Do you have your own money to spend on that item?”

This allowance system has worked really well for my brother and I. My parents put it in place when we were 5, and it’s still working for us now (I’m 16 and my brother is 14). I’ve never argued with my parents about money for non-necessities, making life a whole lot easier for both of us. I have an awesome nail polish collection and my parents have their sanity.

Nobody wants to have their 30-year-old kids living in their basement. If you want to raise financially savvy adults, you have to start while they’re still young children. It’s much harder for them to learn about money for the first time when they’re on their own in their twenties without guidance from an experienced adult. Give them some money to manage while you can guide and teach them.

Discover more about Geeta and what she’s learning about how to be great as a teenager at

About the author

Leave a Reply