3 Smart Tactics for Raising Financially Fit Kids (and How They Worked on Me)

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Girl hanging one million dollar bill on clothes-line
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Yesterday, I got an email from my father. The body of the message contained a link to a Forbes article titled "7 Ways You're Hurting Your Daughter's Future." Always a succinct man, he simply wrote, "Hopefully we didn't mess up too bad."

They didn't.

My parents could've written that article 24 years ago. My little sister and I were raised with both Barbies and Nerf guns, our appearances weren't the focus of compliments, and we were never called princesses. However, the point shouldn't just be that raising your daughter to believe she's a princess could manifest in some unsettling entitlement behaviors later in life. Both genders have issues when it comes to handling money, and we need to create ways to teach all kids how to find their finances empowering rather than intimidating.

For me, the lessons started at home. Here are three ways my parents conveyed them.

1. Using Holidays to Teach About Finance

At the tender age of 3, I experienced the injustice of taxation without representation. After a hard October night of hustling the suburban streets dressed as a pint-size Peter Pan,
I'd brought home quite the haul of Halloween candy. I dumped the candy on the floor and tried to defend my loot against our two large dogs, who easily had a combined 20 pounds on me. In warding off their attack, I turned my head to see my father eyeing my stash. Before I could throw myself on top of the candy, he'd plucked a few mini Snickers and a some Skittles from my pile.

I glared up at him with my baby blues and demanded he put my candy back.

"I took you trick-or-treating," he said. "So I get a cut of your candy. It's called candy tax."

Over the years, candy tax kept happening and eventually led to a conversation about paying taxes to the government.

Our family Easter egg hunt would pit daughter against daughter to find the one golden egg filled not with jelly beans but cold, hard cash. There was an equal distribution of candy in our baskets, but one of us would always earn more than the other each year.

Christmas taught us the value of giving some of the money we'd earned back to those in need.

2. Encouraging Entrepreneurship -- and Not Footing the Bill

From ages 7 to 18, I dabbled in small entrepreneurial endeavors.

They started with selling Krispy Kreme doughnuts during my mother's yard sale. After counting up my earnings, my father insisted I pay my sister for her work and then pay him back his outlay for my inventory: the doughnuts. He patiently explained the remainder was something called net profit.

Over the years, I moved on to operating a small friendship-bracelet empire, then to co-owning a pet-sitting business, and eventually watching small humans in exchange for money. Regardless of which business we were engaged in, my parents were there with love and emotional support, but insisted that my sister and I take responsibility for not just the cost of materials for our ventures, but the follow-through. If we had to wake up at 7:30 a.m. to walk a dog during summer vacation, slacking off and having Mom or Dad pick up a shift wasn't an option -- unless perhaps we paid them.

We learned at a young age that hard work could lead to riches, because making several hundred bucks in a summer walking dogs and changing kitty litter is no chump change to a 10-year-old.

3. Making Sure We Had 'Skin in the Game' When It Came to Purchases

These ventures into small business were important because it taught me to value both my time and my money.
If something I wanted to buy cost $20, I learned at a young age to think how many hours of work that would cost me.

It also afforded me a small amount of purchasing power. If I saw a stuffed animal in a store or wanted the latest Christina Aguilera album (because she was in when I was 8), my parents would ask if I'd stake 50 percent. This tactic trained me to evaluate my purchases and drastically curbed my impulse spending before I even hit puberty. This also forced me to develop the fine art of negotiating.

In later years, they started to wean me off the 50 percent plan; I paid for more of my teenage adventures in full. Thankfully, those early lessons in evaluating purchases prevented me from slipping into consumer debt when I got access to my first credit card.

Tough Love Works

Some people might criticize my parents' strategies as too harsh. Perhaps you'd have trouble taking the startup cost for a doughnut stand out of your child's hand. Maybe asking a kid to pay $5 for a $10 toy seems unreasonable to you. All I know is under my parents' tutelage, money became a source of empowerment instead of anxiety.

Erin Lowry writes for DailyFinance on issues relating to millennials, money and personal finance. She's also the blogger behind Broke Millennial, where her sarcastic sense of humor entertains and educates her peers.


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Lisa Mo' Chin

Check out KidCash.com. It's a FREE online tool that gives your child first hand experience with the concepts of saving, planning, value, delayed gratification, patience, communication, decision making and generosity through healthy limits and positive reinforcement. KidCash provides children with a smaller version of the real world, complete with currencies, tickets and bonuses that their parents define and control.

It’s about giving your child first hand experience with the concepts of saving, planning, value, delayed gratification, patience, communication, decision making and generosity through healthy limits and positive reinforcement.

You can go there and print the whole thing for free right now.

February 12 2014 at 4:37 PM Report abuse rate up rate down Reply
k4jlp

Instead of getting on here and flat out LYING (just like the Repukes), do your homework, read back on the History of the last 20 years and who did what (or who did NOTHING but obstruct. Look at the voting history of ALL REPUKES both House and Senate. History cannot lie. Repukes (and Fox News) believe that if you repeat a LIE enough, it becomes the truth. We are not stupid.

January 31 2014 at 7:08 AM Report abuse +4 rate up rate down Reply
toosmart4u

The young people today will be very sorry if they are voting republican when they are ready to retire. Social security, medicare, good jobs, medical insurance, unemployment, retirement benefits are will be gone. Better save your money you will need it when you retire. Now if you are on social security and medicare thank a democrat, if you want to end these two fine programs vote republican.

January 30 2014 at 11:52 AM Report abuse +4 rate up rate down Reply
1 reply to toosmart4u's comment
progressivehoax

Evan, get yourself educated.

January 30 2014 at 2:45 PM Report abuse -3 rate up rate down Reply
hhifun

Nothing new here, only truth..including the guaranteed critic, whose kids are broke!

January 30 2014 at 11:40 AM Report abuse +1 rate up rate down Reply
progressivehoax

Rule 1 should be never let them see the Democrats in the House and Senate or Obammy.

January 30 2014 at 10:15 AM Report abuse -5 rate up rate down Reply
1 reply to progressivehoax's comment
rostra

Do some research, you might look less foolish. The GOP has spent more while in office, than Democrats, this goes for every administration throughout our history. It's there for the reading. That said, both parties need to look into entitlement "Welfare, Medicaid" rules and cuts, and cuts to the mi.itary and Defense contractors.

January 30 2014 at 10:42 AM Report abuse +4 rate up rate down Reply
1 reply to rostra's comment
progressivehoax

Dickens, not according to the drivel that flows from the DNC.

January 30 2014 at 1:07 PM Report abuse -1 rate up rate down
Richard

Those factors are - - - - NO DEBT, NO DEBT, and above all NO DEBT.

January 30 2014 at 9:10 AM Report abuse rate up rate down Reply
1 reply to Richard's comment
vlady1000

There is a way to teach them how to use debt to make $$, not to buy wants. I loaned my 2 kids $200 each to start a business when they were 11 and 13 years old. They had me paid back in weeks and built it up thru Jr. and senior high school. Today (now young adults), they have never borrowed a dime for a car, never a CC balance (use them for the perks), etc but do owe $$ on rental houses (that makes them $$), part owner in a Surgical Center (that make big $$), etc . Teaching them "debt" is always a "4 letter word" can limit their creativity and entrepreneurship. Teach them well, and trust them to make wise decisions...and they may surprise you.

January 30 2014 at 9:29 PM Report abuse rate up rate down Reply