Money Wise – UK Extension – Communicating with your Children about Money

Do your children earn an allowance? If so, consider allowing them to open checking and savings accounts. Teach them to make deposits, and most importantly, to balance their checkbooks. In the age of debit and credit cards, as well as ATMs, many youth never learn how to balance an account register. Also, encourage depositing a set percentage each week or month into savings. Teach your child how to track where their money goes.

Show your children how to budget their allowance, but don’t expect perfection at first. If they “blow it,” resist the urge to fork over more cash. Let them learn from their mistakes. Eventually their budgeting skills will improve. As long as you are providing for their physical and emotional needs it will not hurt them to “learn the hard way” when it comes to their wants.

For example, if your teenager has his or her eye set on some expensive gadget or gizmo, unless it’s a birthday or holiday, let them earn it. Work out a payment plan to earn the money for their purchase. A cool phone or game? Create a list of chores and how much you are willing to pay for each task.

For example, $1=taking out trash. $2=emptying dishwasher. $10=mowing the yard. Rewards are always more meaningful when they are earned and not just given!

Teach your children to set SMART financial goals.

SMART goals are:

  • Specific (to buy a new smart phone)
  • Measurable (that costs $100)
  • Attainable (by saving my birthday money)
  • Relevant (because I will use and appreciate it)
  • Timed (at the end of three months)

Setting goals with clear objectives gives children something to work towards. Challenge your kids to be SMART with their money! Help them out when you can by encouraging their efforts and offering advice along the way.

For more information regarding the University of Kentucky College of Agriculture, Food and Environment’s Managing in Tough Times Initiative, please contact:

Jennifer Hunter, Ph.D., Director

Assistant Extension Professor, Family Financial Management

(859) 257-3290

jhunter@uky.edu

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