Parenting Pathway #103: Money Talks, Children Listen

It’s never too soon to educate our children about money. If we wait until they are teenagers, their spending habits are already set. According to Teenage Research Associates, older teenagers spend an average of $153 each week, 7% have a credit card in their own name, and 18% have access to a parent’s credit card. As adults, we understand all too well the lack of magic behind a checking account and credit card. But to young children, we may still appear to be like a Genie who can make money appear out of thin air. Here are some ideas for creating a more realistic, healthy view of money:

1. Credit cards are not magic. Children will have a difficult time understanding credit limits if reality for them has been a closet full of new clothes or an expensive video game system. As parents, we need to be more aware of how many credit card purchases we make in front of impressionable children. One way to take the magic out of credit cards is to pay cash for as many purchases as possible, at least in front of the children. Save credit cards for large purchases and private shopping trips. If that is impractical, be sure to explain that you have to pay people back for everything that you buy. Show your child a billing statement and point out how much you will have to pay each month for the clothes you bought.

2. Piggy banks are a child’s first introduction to the financial world, so use them as examples of other banking practices. Check out They have created The Money Savvy Pig•, a piggy bank with four chambers, one for each of the financial choices that children have when they earn or receive money: Save, Spend, Donate or Invest. With this method, you give them control over the money in their lives. In a respectful way, it asks children what they think is the best choice and allows them to make it, thus allowing them to transact in an adult world, your world, without feeling controlled.

3. Be at choice with money. The transparent pig allows both parents and children to see the results of the choices made over time. This gives parents the opportunity to discuss financial choices and their implications. Our relationship with money is also made clear in the words we choose to use. When telling a child that you are not going to be buying that toy he or she “just has to have,” consider an explanation that is about choosing or not choosing to purchase, rather than one that gives the perception that we are victims of money.

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May you be filled with goodness, peace, and joy.

Erika Jackson (
LifeTrek Coaching International
Columbus, OH  •   U.S.A.

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