By Jamie Bosse

Kids know what money is at a very young age, but don’t necessarily understand what it means, or what it can do.  Throughout the year, your child may receive money for various reasons.  They may get cash for birthdays, holidays, baptisms, and graduations (seems like the average kid goes through at least six graduations by the time they are 18).  Perhaps you have a little entrepreneur on your hands who has created a lawn mowing business, is a dog walking extraordinaire, or takes care of the neighborhood children on Friday nights.  What should they do with it?  Here are a few tips when dealing with children and money:

  1. Let them make the final decision:

Everyone likes to get new things and do the activities that they enjoy.  Help your child make a wish list of all of the items they would like to purchase or events that they would like to attend that cost money.  Talk them through the details of what each item or event actually costs and how the child would like to prioritize the items.  Help them weigh the options, and offer advice, but let them make the final decision.  This will help them learn from their mistakes or conversely give them a sense of accomplishment if they feel they made a wise choice.  If they blow all of their hard-earned funds on a toy that they no longer play with a week later or a pair of shoes that have since “gone out of style,” they will (hopefully) have learned a valuable lesson.  Even if you think they are spending foolishly, bite your tongue and let them figure it out.

2. Take Advantage of the Learning Opportunity:

Use money as a teaching tool.  Help your child create a budget by identifying how much money (or income) they have and how much of it they want to spend on their list of desired items.  Kids rarely look at price tags if they know that someone else is paying the bill, but when it is their money, they realize that there is only a finite amount and it should be spent wisely.  Learning to manage their money at an early age will help them understand the consequences their actions, promote goal-setting,  and help them understand the concept of self-control.  You could also use this opportunity to educate your child about the stock market.  Help them research a company that they are familiar with (McDonalds, Apple, Disney, etc.) and have them decide what company they would like to invest in and why.  Buy a share or two of stock and actively watch it together to help them understand market moves and develop a realistic view about investment returns.

3. Teach them Values:

If being charitable is important to you, use their income to help instill that value in your child.  If you believe that you should give 10% of your income to charity, explain that to your child, help them calculate the percentage, and let them choose where the funds will be donated.  They will experience the joy of giving and feel very “grown up” doing it.  Many people do not understand the “Pay yourself first” saying.  Help them determine a longer-term financial goal (i.e. saving up for a bike, a laptop for college, a car, or building an emergency fund) and have them allocate a certain percentage of their income to fund those goals before they can make any purchases with the money.

Many young adults today feel like they are financially ignorant because they never learned the basics about money management.  Give your kids the tools they need to be financially aware, make wise decisions, and be good financial stewards.

For help with family financial planning, schedule a meeting by clicking below, contact Jamie Bosse –, or call (913) 345-1881.