Financial Responsibility: Eight Tips for Raising Cash-Wise Kids

It is obvious by looking around that most adults have no notion of financial responsibility.  According to Experian's 2019 Consumer Debt Study, the US's total consumer debt is $14.1 trillion, with Americans having an average personal debt of $90,460. According to a survey conducted by Ramsey Research in 2016, two-thirds of high school students who had taken a personal finance course were already earning an average of $3,000 a year. Given this information, we must raise financially responsible children. Here are eight ideas on how to do it.

Discuss Money Openly

We don't want to push adult money anxiety onto kids, they have their own worries, but an open discussion about how money works is healthy. Information about how you prioritize money, the basics of how a bank work, and why we save money are all good starters to longer informative discussions.

Use a Clear Jar for Savings

Keep a clear jar in the living room. Every day, drop your loose change in that jar and let children see how that money slowly accumulates. After it reaches a certain amount, use the money for something fun, so the kids associate savings with positive feelings.


Pay children for doing chores around the house. Treat the chores as their job and getting their allowance contingent upon successful completion. As kids get older, spread out the time intervals, so kids get an idea of what it's like to manage money.

Budget at the Grocery Store

Set a budget at the grocery store and allow kids to go shopping with you. Use their input, within reason, to show how choosing to buy one item may mean not buying another.

Weigh Opportunity Costs

As kids mature, give them a practical lesson about opportunity costs. Let them decide if they're going to get a video game or the new shoes they want. Fix in their minds that sometimes purchasing one thing means missing out on another.

Extra Money

Let kids earn extra allowance money by picking up jobs that need doing but are outside their normal chores. Whether it's organizing the basement or vacuuming, let them choose, or not, to take on extra responsibilities for more financial compensation.

Lemonade Stand

The lemonade stand is the first small business for most of us. Let the kids make as many decisions as possible, including how much product to make given the weather outside, what ingredients to buy, what to charge for the product, and how to advertise. The more decisions the kids get to make, the better they'll understand how the money is affected by those decisions.

Contentment and Advertising

Your children are constantly bombarded with advertising. Talk to them about how advertising attempts to manipulate our purchases. Have your children think through if they really want or need whatever they are purchasing or if they have their minds changed by a successful marketing campaign.

Not only do we want our children to be financially successful, but it's good for society as well. Financial responsibility is a fixture of everyday life. The earlier children are introduced to it, the more successful they will be.

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