Kids & Money

Summer is approaching. Kids are getting summer jobs. How do we help them learn about their money?

When should we start talking to our kids about money?

• Start young and keep the discussions age appropriate. You'll know what feels right for your specific situation.

• Let them hear you talk to your spouse, partner, significant other, and friends about money.

• Budgeting is a great starting spot to talk to your kids about money.

  • Kids start to learn to ask if there's enough money in the budget for things they want. This could be for a toy, or it could be for an ice cream cone at the grocery store.

Start by talking about how we earn money

• What kind of jobs are there?

• Do your kids get an allowance?

• How much do different jobs pay?

• What can your kids to for work at their age?

• When your child gets their first job, talk about filling out a W-4 and how taxes work.

Talk about budgeting with them

• It can be as simple as give, save, and spend to start with.

  • You can talk about the categories you budget for and they can add these as they feel the need to

• What are things that your kids are saving for?

  • This could be a treat or gift for young kids

  • School

  • Vehicle

Once my kid has budgeting down, what's next?

• Explain the difference between using credit cards, debit cards, and cash

• Talk about building credit and the different ways to do so. A simple way to start is to get a credit card with a low limit and pay it off monthly. Once your child gets a vehicle, having a small loan that the child pays will help build credit if they can't pay cash for a vehicle.

• One of the first large purchases many teens have is a vehicle. What are the costs of owning a vehicle? Think gas, oil changes, tired, etc. How much money will they be able to put down on a car? What amount is the loan going to be and how big will the payments be?

• Start talking about debts you're paying down and how. Maybe it's a credit card or a vehicle. We can talk about interest and how that affects the payment we make. Show them your credit card statement and what that looks like.

• Talk about your investments if you feel comfortable doing so. You can show your child your 401(k) and how you invest so they want to invest when they are able. Get them excited about money.

  • Compound interest and time value of money are fun concepts to discuss when talking about investments. We'll talk about these in depth in the coming months.

• As they get older, start talking about downpayments for a home. What bills they should expect to see, insurance, etc. Maybe renting is right for them. Things like renter's insurance also need to be brought up in this case. Show them what the bills look like if you can. Are your bills on auto pay, do you pay them online, or do you send in a check?

My child is headed to college. How do I help them prepare for the finance side?

• Encourage them to take concurrent enrollment and AP courses during high school if available. This allows the student to take college courses at a highly discounted rate.

• Trade schools are a great option. You can often attend during your high school years at a discounted rate. This would be great for your child if they want to do something along the lines of nursing, dental assisting, cosmetology, plumbing, electrician, etc.

• Show them where they can apply for scholarships. Encourage your student to talk with their school advisor/counselor to find out where to find scholarships they can apply for.

• Help them apply to different schools so that they can determine which one will best fit their needs.

• Talk about attending a community college for at least the Associate's degree. This will help save money so they can attend the school they want to for their major.

• Make sure they know how to budget and that saving for school is part of their budget.

• A cost-effective vehicle (starter vehicle). This can always be upgraded once they have graduated and are more financially ready for a more desirable vehicle.

• Is living at home an option for them? This could help cut the costs of living in student housing.

• Child paying for college vs parents paying for college. If you child is paying for their own education, they are likely to get more out of it as one tends to put more effort into something they are paying for. If you pay for your child's college, they may not take it as seriously as they would if you set the expectation of them paying for their schooling.

• Have your child check with their employer to see if they offer any tuition reimbursement or scholarships to employees.

Elexys Thomas graduated from Utah Valley University (UVU) with a degree in Personal Financial Planning - a top 3 school for financial planning and has passed the Accredited Financial Counselor exam. She is passionate about sharing financial principles and helping individuals and families meet their financial goals. She'll be updating this page monthly to help you with your financial wellbeing. You can reach her at elexys@teamworksgroup.com