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Raising Financially Independent Children

Updated: Jul 21, 2023

I recently completed a survey for an organization I trust. I was coasting through the basic demographic questions when I was dumbfounded by the question about children. Not because I’m confused by my kids but because there was an additional option I had never seen before. In addition to the traditional options of dependent children, adult children or no children, there was an option for “supporting an adult child.” After getting over the initial shock of this new option, I had to ask myself if helping an adult child get through college qualified as “supporting an adult child.”

Either way, it says a lot about our society when something becomes such a norm it is an option on our surveys. Common knowledge suggests, and research supports the fact that now more then ever, parents are helping support their adult children. This trend isn’t good for the parents or the children.

Helping develop a child’s financial literacy is about a hundred small life decisions and conversation, not one chat with a check when they graduate. In elementary school it is about not getting candy or a toy on every trip to the store. Middle school it is about what trends you can follow and what trends you aren’t willing to support (cool hats for $20 could be a yes but the latest electronic for $300 could be a no). Of course, in high school it is about cars, computers and college planning.

Here are a few tips to raise financially independent children

  1. Talk to your kids about money. Make them part of the conversations you have as a family regarding day-to-day financial decisions.

  2. Give them opportunities to flex their own money muscle so they can feel the pain of giving up something and the satisfaction of getting something they value. This could be as small as having them hand the cashier the money for their ice cream or giving them a set amount for back to school supplies and allowing them to pick out what they want and keeping any money left over. If they go over, it would mean digging into their savings or future allowance to cover the shortage.

  3. Insist your kids start earning money of their own as their age and abilities allow. It can start with dog walking, babysitting and mowing lawns and can evolve into working at a local store or restaurant as a teenager. Then when they are considering a purchase you can help them see the number of hours they have to work to pay for it.

  4. Share with your kids the rationale behind some of your own financial decisions so they can hear your thinking and the judgement calls that go into a decision to take a vacation or to delay the purchase of a car. I’m not suggesting you share your income or net worth. Most children don’t have the life experience to put such figures into context. They can, however, understand how buying a ticket a few rows back at an event can save the amount needed to purchase the souvenir t-shirt, hot dog and drink they will want.

  5. Help your teenager research the cost of different post high school education options and the career opportunities associated with them.

  6. At every age, have the value conversations to show that a person’s net worth has nothing to do with their personal worth. Historic figures like Martin Luther King, Jr. and Mother Teresa are great examples of how a person can have a significant impact on the world without having significant wealth. Kids need to know they are worthy regardless of their wealth.

  7. Giving money isn’t the same as giving love. Don’t mistake showering our kids with gifts as showering them with love. We all know that doesn’t work.

  8. Don’t give the gift of money without the lessons of how to manage it.

We all want the best for our children. That doesn’t mean we should do everything for them. Sometimes the most loving thing we can do is let them do for themselves.

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