Parenting & Raising Money Smart Kids

Adulthood is a daunting thought. Planning for the rest of your life seems terrifying and unmanageable. However, planning slowly and accordingly makes all the difference in the financial long term. When having kids, it’s important to consider all of the factors that play into it. Every woman will have to assess family situations and decide whether to work or to stay at home. Both have different financial implications. Working creates extra income, however, there becomes the concern for how to pay for daycare. Working at home depends if the family can afford to live off of one paycheck. Staying at home decreases expenses like lunches out, child care, work wardrobe but could increase expenses on utilities, groceries, and health insurance. There is a lot to consider when deciding to stay home and raise a family or join the workforce. Personally, I plan on pursuing a career I love so I think I will continue to work. When that time comes to decide, I will plan smartly for the long term including financial safety nets to fall back on. While raising kids on a paycheck, it’s important to not splurge and to shy away from debt. I will take advantage of Child Credit and the Child-Care Credit. 529 plans are great for starting to save for college. So are Coverdell Education saving accounts, Roth IRAs, and Prepaid College Tuition Plans (PACT). When teaching kids how to manage money smartly, there are a handful of do’s and don’ts that will be beneficial to them. Kids should learn how to manage a cash allowance, how to manage a checking account, how to save for a goal, how to compare prices, how to figure the time value of money, and how to get out of debt. A great way to teach them all of this and receive financial exposure at a young age is to send them to a summer camp about finances. Two great camps are Camp iCare, for children ages 6 to 12, and its companion for teens ages 13 to 18, called REAL Cents REAL Change. Both are located in Auburn, Alabama through Auburn University’s Cary Center for the Advancement of Philanthropy and Nonprofit Studies and its Department of Human Development and Family Studies Early Learning Center. While these camps teach smart finances, they also teach the importance of philanthropy. There are also other camps around the country that teach the importance of money. It’s important to avoid impulse buys in front of children. While saying no to a candy bar in the grocery store is hard, children need to learn the importance of saving to spend. They also need to learn the importance of hardwork. I plan to give my children weekly allowance for the chores they do throughout the week. I believe it’s important for them to earn their money, and understand that work is what leads to saving money to later spend. I also plan to have a savings account set up by age 5 for my children. Money from holidays, birthdays, and allowances can be saved and put into the savings account. Teaching kids the importance of a budget is also vital to their financial success as an adult. Starting with a small budget and teaching them how to manage that is a great introduction. It’s also important to model good spending habits. Kids are like sponges, they absorb everything around them. As an adult, it’s vital to be a good example of how to save and spend money. According to a survey in 2017, 53% of kids who aren’t allowed to manage their own money spend it as soon as they get it. 49% of these kids lie to their parents about what they spend their money on. In contrast, kids who are allowed to manage their own money, 76% talk to their parents about money. 62% of these kids have a savings account. In order to raise financially smart, philanthropically inclined children, early action and exposure is vital to their success. 

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Here are a handful of goals I seek to accomplish in this phase of my life: 

• When deciding to have a family, I will assess family situations and decide whether to work or to stay at home. 

•  Be conscious of splurging and shy away from debt. 

• Plan smartly for the long term including financial safety nets. 

• Take advantage of Child Credit and the Child-Care Credit. 

• Send children to summer camps that teach kids about money. 

• Avoid impulse buys in front of children.. 

• Give my children weekly allowance for the chores they do throughout the week.

• Have a savings account set up by age 5 for my children.. 

• Teach my kids the importance of a budget.

•  Be a good adult example of how to save and spend money.