Watermelon. Corn-on-the-cob. Fireworks at night. With all the excitement, it’s easy to forget that the Fourth of July is more than just another summer barbecue: it’s a reminder that independence is something worth fighting for.
For parents, independence is a challenge we face every day. We are responsible for teaching our kids the skills they need today to be successful tomorrow – from changing a car tire to preparing for a job interview. Financial wellness is one of the top and toughest topics to cover.
Teaching kids about money can be challenging, especially when it comes to not spending it. Regardless of whether your child is in kindergarten or college, here are some essential lessons every parent should share:
Lead by example. Children learn by watching the adults around them. So, it’s important for you to make responsible financial decisions – avoiding impulse buys, saving wisely, shopping for value, and so on – and to explain those decisions to your child.
Start simple, but start early. There are many ways to teach young kids the basics of good saving habits, from using traditional piggy banks to more modern tools like PiggyBot and Bankaroo. Discuss the difference between wants and needs with your child. Let them know that while it’s okay to spend money on “fun stuff,” they should save up for it first.
Put lessons into practice. Older tweens and teens can start with a “training” debit card that has custodial limits on its use. Set them up with a mobile banking app, so they can watch their money grow over time. Consider offering rewards for good saving habits.
Talk about credit. With the average American having over $5,000 in credit card debt, it’s crucial for your child to learn how to manage their credit, especially as they turn 18. Help your teen get a credit card and guide them through responsible usage. It can be a daunting transition, but it’s a good opportunity to teach them how to build and maintain a healthy credit score.
Collaborate on a financial road map. Financial planning isn’t always intuitive. Don’t assume your teen will figure things out on their own. Instead, sit down and help them plan a mock budget, including costs they might not fully understand, like health insurance and taxes.
Ask about their future goals. Do they want to graduate debt-free, buy a home, start a business, or establish an emergency fund? Include these goals in the financial plan as monthly or yearly saving benchmarks and help your teen connect good saving habits to long-term outcomes.
Be open to new ideas. Money management best practices and priorities have changed over the years, and that’s okay. Your job is to prepare your child for the future they will live in, which will be different from your own.
What matters most is not how they navigate life’s challenges, but having the right attitude, values, and habits to tackle them successfully. And this Independence Day, that’s something we can all celebrate.