Charting a Course Toward Financial Independence
The journey toward financial independence should start early. In order for children to be successful and out on their own someday, they need to be given many chances throughout adolescence and young adulthood to make decisions (and mistakes).
Equipping children to make thoughtful money decisions over time will make them better prepared for the future.
Fortunately, children can learn to build financial capabilities at any age and as a parent, you’re key to helping them chart a course! You have a unique opportunity to coach your children through the pros and cons of every decision. And the benefits of parents’ early financial mentoring are many! You’ll help your children:
Develop healthy money habits;
Set age-appropriate goals that encompass share, save and spend categories;
Cultivate a healthy work ethic;
Build resilience for enduring future hardships;
Gain confidence from making their own financial decisions; and
Enhance their overall wellbeing.
Raising a child to be financially independent is a significant accomplishment.
Throughout their young lives, your children will undoubtedly learn the pain of unwise spending and running out of money. Later, they’ll find out what happens when they don’t pay bills on time. Now is the best time for your kids to learn from experience – while the stakes are still low.
Tween to Young Adult Skill Building
Here are some age-specific ideas for tweens, teens, and young adults to help them gain valuable experience with cash and cards:
Ages 12—13: Tweens should gain experience using cash. Children can start learning how to periodically track all their income and spending over a specified timeframe -- a few weeks or months. Monitor how they manage their money, and discuss the choices they make with sharing, saving, and spending.
Ages 14-16: Young teens should master using a debit card. Help your kids build on the skills they demonstrated with cash by transferring funds to a debit card. This gives them increased financial responsibility. Create a budget of needs and wants together.
Ages 17-22: By this stage, teenagers and young adults should learn to use a credit card if they’ve earned the privilege through earlier learnings. Educate them on how to use a credit card, “good credit” versus bad, and the importance of their credit score.
There are so many financial lessons we can share with our children. Perhaps the greatest gift is to allow them to make their own mistakes and gradually learn how to manage finances. The more experience they receive now, the greater their financial competence and confidence as they go out into the world. And you, in turn, will learn to trust their decision making, too. It’s a win-win!