Teaching Kids Financial Responsibility

Do you remember family stories about your great grandparents’ arrival in the US at age 18 with little money, few skills, and only hope and ambition carrying them to the “land of opportunity?” Over time, they gained responsibility, supported a family and made a life for themselves. It is this confidence and sense of responsibility that we want to impart to our own children. When a child reaches adulthood, every parent hopes he or she will be ready to “face the world” just as their ancestors did a century or more ago.

In my blog Fun Family Conversations about Money, I introduced you to author Beth Kobliner and her book Make Your Kid A Money Genius in which she gives advice on teaching kids financial responsibility and confidence. She suggests that it is important to empower your children to make age-appropriate decisions.

I wholeheartedly agree and embraced this concept when raising our children. Every year on their birthdays, we let our children choose a new responsibility. These included cleaning their room, selecting their clothing within a mutually agreed budget, making a meal once a week for the family and scheduling their own appointments.

One of our children started with creating and adhering to a budget for shoes. By taking charge, she not only changed her attitude and values toward the shoes she “had to have,” but she did not even spend the budgeted amount. She felt empowered and gained more satisfaction. Our heated discussions in shoe stores thankfully ended. A year later, the same daughter assumed the responsibility for buying her clothing. That is when some real surprises happened. Not only did she spend within her budget, she read labels and took good care of the items she had carefully selected. Everyone was much happier- I was relieved of making decisions and she gained confidence in her decision-making and satisfaction in her selections. By giving some freedom, we taught our daughter how to evaluate trade-offs and live with limited resources—two factors she would most certainly encounter later in life. Many win-win moments come from having mutual respect and sharing responsibilities within some agreed-upon guidelines.

Modern parents are seemingly reluctant to share family responsibilities with their children, thereby depriving their kids of valuable skills. Letting children choose responsibilities and discussing their decisions without judgement will build their confidence and help them succeed as independent, self-sufficient adults. Today’s children need these opportunities to learn and grow so that when they venture out into the world, they will be better prepared and have a greater appreciation for the experiences they will encounter.

Jeanne Gnuse

Jeanne is a co-founder of HTG Investment Advisors Inc. She oversees the firm’s client communications, marketing, and community relations functions. Jeanne is the mother of three children and grandmother to seven. She loves helping others learn money value lessons.

Jeanne received her BS from the University of Dayton and pursued graduate studies at Ohio State University.
The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.
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