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Setting A Good Financial Example for Your Kids

Setting A Good Financial Example for Your Kids

Children are social learners. Much of their knowledge, attitude, values, and behavior are shaped by observing and engaging in activities with peers, teachers, and parents. A wise parental approach is to set a solid financial example, shaping a brighter future for kids.

According to the CFPB, children tend to form their money habits between the ages of 6 and 12.

At David Lerner Associates, we believe in the power of financial education to shape a brighter tomorrow In this article, we explore how setting a good financial example to your kids can be a transformative journey, paving the way for a financially secure future.

Normalize Money Talk

Nearly half (43 percent) of American adults are being financially illiterate, making personal finance education more crucial than ever.

“Communication is the bedrock of financial literacy,” emphasizes Gary Isler, Senior Vice President, Investments at David Lerner Associates, Inc. “Break the taboo surrounding money talk. Make it a natural part of your conversations, sharing age-appropriate insights about the value of money, earning, and spending.”

Failing to engage your kids in money talks might result in pitfalls like financial dependency or a lack of future self-worth.

  1. Create A Financial Vision Board

Make financial goals tangible! Craft a vision board with kids, illustrating short and long-term objectives. Achievable goals instill discipline and a sense of accomplishment.

  1. Help Your Kids Earn Money

The most effective method for your children to grasp the concept of how money works is to provide them with the chance to earn their own income.

Kids have plenty of free time. Help them figure out how to make money during their free time.

Teach your children about money by letting them earn income. Kids have plenty of free time, so guide them on how to make money during those periods. In 2022, a T. Rowe Price survey noted that 64 percent of American parents gave allowances, emphasizing the ‘earning it’ aspect. On average, kids earned $19.39 per week through this arrangement.

Whether through chores, a part-time job, or entrepreneurial endeavors, earning money imparts the value of hard work and fosters a sense of financial independence.

  1. Develop Their Budgeting Skills

Teach the art of budgeting early on.

Involve your children in creating a budget for their allowances or earnings.

Motivate them to monitor their spending habits, considering how altering these patterns could expedite the achievement of their savings goals.

This hands-on experience instills responsibility and an understanding of financial planning.

  1. Inculcate A Savings Habit

Establishing a savings habit is a cornerstone of financial well-being.

A survey conducted in 2022 by LendingClub revealed that 64 percent of American adults were handling their finances on a paycheck-to-paycheck basis, with minimal or no savings allocated for future requirements.

Prevent your kids from becoming part of this statistic. Aid them in allocating a portion of their earnings for savings.

Initiating a child’s savings journey can be done uniquely through a piggy bank or a clear savings jar. Encourage them to save a small portion each time they receive a little extra cash.

For young kids, the concept of money’s value may be challenging, but as they witness their coins or notes accumulating over time, they begin to grasp the idea that money grows when kept safe. This habit, when cultivated early, can grow into a robust financial discipline.

  1. Help Them Understand Banking Basics

Take your kids to the bank and let them see how banking transactions occur.

Explain how savings accounts work, how to transact over an ATM, and introduce concepts like interest. A practical understanding of these basics lays a solid foundation for managing a bigger bank account when they get older.

Enable them to progressively manage basic banking transactions and shift from saving in a piggy bank to using a real bank account.

  1. Introduce Them to Investments

I understand the challenge—you’re probably grappling with getting your teen to handle their laundry, let alone grasp investment concepts.

Here’s the catch: the earlier they start investing, the brighter their financial prospects become. Trust your teen’s capacity; they’re often more capable than you’d imagine.

Keep explanations age-appropriate. Differentiate between saving and investing, highlighting the potential benefits of wealth growth over time.

Encourage your teenagers to invest their savings, stipends, or bonuses into compounding investment products. Redirecting funds from non-essential purchases toward investments sets them ahead in their financial journey, preparing them for the professional world ahead.

Lead by Example

Kids are like little sponges, absorbing everything around them, from the words you utter in frustration to the family stories you might prefer to keep under wraps—they’re keen observers and, sometimes, unintentional broadcasters of family tales.

Demonstrating positive money habits is crucial when interacting with your children. It begins by understanding your own financial mindset and imparting suitable lessons based on the child’s age.

Whether it’s budgeting, saving, or investing, let them witness your financial decision-making process. This practical exposure can be more impactful than words.


The key to success in life is to start early, and in the realm of financial education, parents are the primary guides.

At David Lerner Associates, we recognize the profound impact of early financial literacy. By normalizing money talk, involving your kids in practical financial activities, and leading by example, you lay the groundwork for their financial success.

Remember, setting a good financial example is an investment in your children’s future well-being.

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

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