Professional Freedom Tax Service - We won't file until you smile!

Recent Posts

IRS investigating Liberty Tax
6 Tax Red Flags That Can Get You Audited
Teach Your Kids About Money (They'll Thank You Later)
Police warn of IRS scams during tax season
Consultant's Corner: Irs Schedule C Audit..


Filing a late tax return
Freedom Talk
General questions
Self Employed Individuals
powered by

Tax Service Blog

Teach Your Kids About Money (They'll Thank You Later)

Money can be a tough subject. In some families it is taboo. Other times it is just too abstract. Here, Kate Ashford outlines a few fun and concrete ways to talk about finances with your children. 

As parents, we pass a lot of wisdom on to our children, but we seem to be leaving money know-how up to chance.

I recently realized that my oldest daughter, who just turned five, doesn’t know a penny from a quarter. That may not seem significant, but part of the problem with financial literacy today is that money isn’t tangible anymore. Americans are using plastic for about three-quarters of all point-of-sale purchases, according to a report by Javelin Strategy & Research. That means kids aren’t seeing money exchanged, and they aren’t handling it or seeing their parents handle it very often.

Here are a few strategies for upping your kids’ financial games:

Use cash whenever possible.

If you are primarily a credit card user—and most of us are—your children see you use a piece of plastic to magically buy things. They have no idea that you must then pay for the charges on that piece of plastic with the money you have earned. The more you can show your children that you must pay cash for the things that you buy, the more concretely they will understand how money works.

Try this: Consider a piggy bank with compartments, such as the Money Savvy Pig, which allows your child to watch change pile up for saving, spending, donating and investing

Give them hands-on practice.

You wouldn’t send your child out the door with the keys to your car without a few test drives, would you? (If you would, there are different things you should be reading right now.) The only way your children will ever learn to manage money is by doing just that—managing it. An allowance is a great learning tool, and you can start when children are very young. Many experts recommend one dollar per week per year of age (so, $5 a week for a 5-year-old) but you can play that by ear. As they get older, you can make them responsible for an increasing amount of their own expenses. If they have to shell out their own cash for those expensive shoes, they might reconsider it.

Try this: Offer younger children the ability to make extra cash by doing odd jobs around the house, such as weeding the garden, watering plants or washing the car.

Incentivize savings.
If you give your children money, they will spend it. Promote savings—and teach the power of compound interest—by matching your kids’ long-term savings with your own money. That might include saving for a car or college. Just be prepared—if you make the offer, they may save more than you anticipated.

Try this:  Steer your children toward the Compound Interest Calculator on so they can see how much money they can amass over time. Real numbers can be more persuasive than a parent nattering on about interest and savings rates.

Teach them the ways of plastic.
For the love of Mastercard, please do not send your kids to college without understanding how credit cards work. You don’t have to get them one; you can start with a debit card linked to a savings account—preferably theirs—at a local bank. Show them how to track their balance and consider letting them bounce a transaction or two so they realize that going over budget has consequences.

Try this: If you use a credit card, have your children sit next to you while you pay the bill each month. Show them the interest rate and explain what would happen if you didn’t pay the balance in full each month. The goal: That your child won’t be a college student who graduates with $3,000 in credit card debt, which was the average for the Class of 2013.

20 Comments to Teach Your Kids About Money (They'll Thank You Later):

Comments RSS
rolex for women on Saturday, January 03, 2015 9:22 AM
naturally like your website however you need to take a look at the spelling on several of your posts. A number of them are rife with spelling issues and I in finding it very bothersome to inform the reality then again I'll definitely come back again.
Reply to comment

Art Fundraiser on Wednesday, January 28, 2015 3:10 AM
I am happy with your stuff provide. I like to bookmark it and i hope in future you will keep update us.
Reply to comment

NOTE COUNTING MACHINES SUPPLIERS on Tuesday, March 03, 2015 6:09 AM
I am happy with your stuff provided on kids and money. I like to bookmark it and i hope in future you will keep update us.
Reply to comment

Equity market expert trading tips on Thursday, March 05, 2015 6:26 AM
Very interesting post….really informative on teaching kida about money…..of all the blogs I have read on the same topic, this one is actually enlightening….
Reply to comment

Stock Market Calls on Thursday, June 18, 2015 3:13 AM
Sure such as good articles post in this glod and fabulous i am very good site post Thanks for this nice article,
Reply to comment

Indian Share Market Tips on Monday, June 29, 2015 8:10 AM
I found this article informative and interesting. I have known very important things over here. I admire the valuable advice you make available in your expertly written content. I want to thank you for this informative read
Reply to comment

mcx tips on Friday, September 18, 2015 1:01 AM
After looking at a handful of the articles on your web site, I seriously like your way of blogging. I book-marked it to my bookmark website list and will be checking back soon. Take a look at my web site too and let me know what you think.
Reply to comment

Stock Trading Tips on Saturday, June 18, 2016 5:55 AM
I'm very impressed through the detail of a blog posts on Regular Massage nicely Being. this are going to be very helpful. Thanks regarding sharing your thoughts.
Reply to comment

Stock Advisory Company on Monday, October 24, 2016 3:59 AM
The shared post is really appreciable, great inforamtion it contains. Thanks for sharing such a informative and great content.
Reply to comment

olymptrade on Tuesday, May 22, 2018 4:53 PM
Now I am ready to do my breakfast, when having my breakfast coming again to read further news.
Reply to comment

loemrntdherid1 on Wednesday, May 23, 2018 1:41 AM
I will continue visiting this blog regularly.
Reply to comment

samwilliam on Thursday, June 14, 2018 3:18 AM
The post you share about the teach your kids about money is very impressive. I really appreciate your effort on it. It become very useful and informative post for the parents. The discussion you share in this is very well. Thanks for sharing this all. Keep sharing. long lasting rubber flooring are available on this website
Reply to comment

samwilliam on Tuesday, July 03, 2018 5:30 AM
Very well post you share in this. The topic you share about to teach the children about the money is very impressive and useful. Its very useful for the parents. The information you share in this is very well. Keep sharing. top quality gymnastic mats available
Reply to comment

nightrush on Monday, July 09, 2018 11:07 AM
that favorable position regularly can be estimated in short order.
Reply to comment

instagram on Thursday, July 12, 2018 12:10 AM
I am impressed with the way of writing. It kept connected me all the time. Keep up the good work
Reply to comment

the voice winner 2018 on Saturday, November 17, 2018 7:00 AM
Looking great work dear, I really appreciated to you on this quality work. Nice post!! these tips may help me for future.
Reply to comment

Joshua vs Miller Live on Thursday, February 28, 2019 7:21 AM
After their explosive face-to-face meeting in New York last week, Anthony Joshua and Jarrell Miller meet again this afternoon in their London press conference. ufc 238 ppv.. ufc 238 prelims live.. ufc 238 Chicago.. UFC 238 free streaming
Reply to comment

leagltierlis on Tuesday, March 05, 2019 2:38 AM
Every one of these levels speaks to a dimension of focused power that may tip the equalization of the amusement to support you. Simply realizing which champs are "suitable" isn't sufficient League of legends tier list
Reply to comment

denversecvidmon on Saturday, March 09, 2019 4:03 AM
The Snowden spills demonstrate that the NSA has been exploiting this equivocalness in the law by gathering metadata on "somewhere around many millions" of "accidental" focuses from around Denver security video surveillance
Reply to comment

Aladdin on Monday, March 18, 2019 11:58 PM
Thanks for picking out the time to discuss this, I feel great about it and love studying more on this topic. It is extremely helpful for me. Thanks for such a valuable help again. Aladdin
Reply to comment

Add a Comment

Your Name:
Email Address: (Required)
Make your text bigger, bold, italic and more with HTML tags. We'll show you how.
Post Comment
Website Builder provided by  Vistaprint