Suze Orman TwitterSuze Orman FacebookSuze Orman YouTubeSuze Orman LinkedIn
View Blog & News List

Money Lessons Every Parent Needs To Teach This School Year:

August 18, 2016 at 12:00 AM

It’s that time of year again: back to school. While I know there are legions of amazing teachers waiting to educate your kids, I need you to step up and do some important teaching that most schools drop the ball on: personal finance.

Please don’t shrug that it’s not all that important. Or that you have time to explain things when they are leaving for college. That is way too late. How your kids relate to money is something that needs to be learned through experience. You can’t cram experience into one serious talk two weeks before they move out.

Here’s how to teach important money lessons along the way:

Give Each Child a Back-to-School Budget. Once they are 10 or so, start introducing the notion of cash flow management by telling each child how much money they have for clothes and how much for supplies. Then have them build a shopping list (or online wish list). Chances are they aren’t going to stay on budget for the first go-round. That’s where you step in and with encouragement and a sense of fun—yes, I said fun-work together to figuring out tradeoffs they will need to make to meet their budget.

I can’t stress enough how important your attitude is here. You want them to enjoy this challenge, not feel punished.

Formalize Allowances. This bears repeating: no one is to ever get an allowance for good behavior. That’s a bribe, and so very wrong on so many levels.

Allowance is earned, not given. Emptying the dishwasher. Helping with the laundry. Mowing the lawn. Doing whatever chore you can think of that is appropriate and that actually is of value to you. (That’s part of the lesson here: helping the family!)

Children under the age of 12 or so should get an allowance every week. From 12-16 stretch it out to once every two weeks. By junior year think about making the allowance monthly, with the idea that your child will need to make the money last the entire month. Coach them. Help them. Again, you are gently teaching through experience.

Introduce the 3-Bucket Approach to Financial Gifts. If your child receives money for birthdays or other celebrations, I strongly recommend you create a structure for how that money should be handled. My three bucket strategy:

  • Spend it. Let your child use the money any way they please. No judgment, and no steering. It is so important they be given the right to make their own choices. 
  • Save it. You might want to divide this into two smaller buckets: one for a short-term savings goal and one for a longer-term goal. College is a great long-term goal, but it’s asking a lot to tell an eight year old they need to save for a goal so far off in the future. That’s where a shorter-term goal comes into play: saving for a special toy or piece of electronica that you expect them to contribute to paying for. Or saving to have some spending money for the next family vacation.
  • Share it. Work with your child to talk about charities. That can be a local group, a national organization or a global non-profit. Just think of all the great conversations this is going to trigger. If your child wants to make a donation to a local charity, I highly recommend having them drop it off in person.

I will leave it to you to decide how to divide the buckets. Just be sure to convey to your children that each bucket is important. While they will likely enjoy the first bucket the most, it’s the Saving and Sharing buckets that are so vitally important to raising a money-aware child.

Tag Cloud

protect and provide for minor child Ashley Springerfile taxes quicklyloan is giftinsuranceBeautylive below your meansCivil Rightsincreased auto insurance premiumFinancial Gift Cliffno splurge compare provider pricingmax employee matchpowerfulunsubsidized Stafford loanbest loan deal anticipated salarySuze Orman spouse Kathy TravisLTCi ASAPPay Off Debt Before RetirementCombo Insurance Productschildren's bookWarner Bros Television Groupcollege graduatehigh deductible health care planpay off debtNew american Dream confident of solutionStock InvestmentsSandy Hook Promiseinitial tax break Suze Orman Scholarshipcredit utilization rateearn more on savingsidentity fraud2015 record year car salesSuze OrmanGay RightsBaby Boomerscalculate dependents annual income needsFinancial Power of Attorneypay down car loanpurely financial standpointtax ID theftclosing feesfinancial argumentsspeak new goalhome buying seasonemployer funding HSAHDHP's are good for youborrow each year, capitalization is going to pile up heartachelife insuranceresponsible with moneydoctor no longer in networkback door Roth IRAhighest possible benefitadjust allocations shop online guaranteed level term policyConventional loan PMIphysical healthFinancial Solutions For Youreal estate mistakesretirement planForbesFinancial Awareness Video Festivalwomen longer life spankids schedule paymentsdeath benefit needs for familyno apologyYoung Adult paid in fullmortgage brokerCommunication Skills add teenfinancial aidInfluentialsbill paying prioritiesmultiple lenderssecure creditMinor Children employer offered life insuranceannual cost of living adjustmentemotional stakesmeet monthly manage student loanshigh down paymentnear historic lowsFederal Reservestay positiveno interestrent vs buyHeartHigh Credit Scorestandard rateVeterinary Schoolno negativitycontribution quick closinghome buying budgetbuying a carNewtownHSA tax savingsInfluential Celebritycredit cardUniversity of Illinoisterm life insurancedream schoolbuy down fiduciaryincrease retirement savingsdangerous money seasonRichno late fee credit unionteens and moneysocial security never insolventsmall changes home ownershipmobile appdangerous retirement planconsider roth 401(k)!00% tuition paidSuze approvedsecured cardHoliday ShoppingFundsDeath BenefitFree Debt Eliminatoremergency fund school Sandy Hook Elementary Schoolstretch out haircut appointmentsgrandchild summer job IRA contributionFHA loan feesplanGoodbyenew carcharges on credit cardlow credit scorelower overall drug costadvice for college graduatesHDHP's3 step financial road mapdon't do five year car loanhigh credit score discountat worst still pay 75% benefitget credit cardautomatic withdraw to savings Must Have DocumentsFRAmonthly benefit community college8 Rulesroth irawould you decline a bonusvalentines dayLovepaying for collegehigher insurance deductibleMass Mutualfinancial fearsbetter loan dealsno waiting periodLong Term Care premiumssave couple financesdepreciating asset GraceAccuQuote.comBankgrandparent IRA contribution 401(k) Contributionseliminate credit card debtEasy Life Insurance Credit scorerising home priceshigher monthly paymentdon't buy wantsDurable Power of Attorney for Health Careorigination feesrepay student loanstoo expensive schoollow down paymentLTCno private loanworst financial mistakehealthy youtitle insuranceEric Dodge dental discount planRetirement Savings2016 adjust estimated taxAARPlet them have 50% controlcollege studentLong Term Care shoppingNew York Lifebad decisionsmortgage interest tax deductionCPI-Wstudent loan debtbest interest of investorInvest for savings growthface your financial fearpoint cost offset by savingsmaintain standard of livingPhyllis Shelton expert long-term careSchool of Social Worklife insurance name trust as beneficiaryhome budget after tax costdon't defer interest paymentsalternative FICO scorelong term goalPrime Rate Rise 2015bad retirement planningMoney-SavingCD'sincrease emergency savingsstudent loan repaymentprescription tierage appropriate chore20% equityCOLAswitch to spouse coverage19 years cash flow problemmax benefit coveredchildren under 18Auto Savings overspend on giftspeace of mind15 year mortgageAlarm ClockrolloverSuze changed my lifemonthly dental insurance premium8 month emergency fundwomen outlive menTelepicturesworkaholicGiftmental healthno life insurance financially irresponsibleLifestyleHolidayinterest capitalization6 month waiting periodearn allowancebetter loan ratescommitAmericans don't use all paid vacation timereferrals paid vacationaffordabilitygift not loanEmergency Savingsdental savings planaffordable premiumhigh premiumsjanuary billsteensETF'sletter to suze3% debt transferred pay 100% cashpush yourself to save more for retirementFederal Funds Rate10 year repayment plan debt freeretirment savingsloan no longer than 36monthsburn out401KMotherFederal Stafford loanbetter terms8 month safety netRoth 401(k)Bill and Pennygift up to 14,000Forbes Top 10US Tax CodeFixed Rate Mortgage3 savings buckets professional advisorretirement accountspublic service loan forgiveness programcost of capitalization calculatorBankruptcyovercome financial fearsbe good exampleSwap Older Annuities or Life Insurance mortgage disclosuredon't ignore open enrollmentStaffords this year have a fixed 6.8% interest rateARM Cautiondon't derail retirement savingslong-term care FICO Scorehousing marketlower interest ratefour steps to retirement savings healthy gumspay down student loan debtautomatic paymentfederal student loan deferment Changing Livescostly insurance mistakemarriage financial responsibilitybe kind to yourselfHow To Build Creditincrease retirement contribution ratecar loansocial workstudent loan repayment estimatorcreate new truthsame sex marriage band end FloridaWall StreetPost-Divorcecredit reportAdequate Auto and Home Insurancelong term carepay credit debt ASAPCredit Card Interest Ratecar buying mistakesFICO credit score credit card mortgagebig results SelectQuote.comno fee transferallowanceCredit Card Rate Increaseterm insurancehigh FICO scoreRetirement Incomeget health insurancestudent loan repayment planlower premiumdear suzepercentage of women widowed 75-8420 to 25 times annual incomefinancial independenceshort term goal is it necessary?make saving a pleasuredeath benefit 20 to 25 times annual incomeSatisfyingvalue moneyMoney Marketprovider of financial supportstrained relationshippresident Obamacommunity bankdebtCommencementfamily save at least $100 monthlythree year car loannot gender specific don't cover cosmetic dentistryback-to-school budgetbecome member PBS SpecialThe Suze Orman Showsocial security not going brokesavings pleasurenon conventional routeoverspend on dining outpositiveMortgage Credit Availability Indexhealthy retirement blood pressureonly refinance if it payspermanent life insuranceincentives for health care wellness screeningprotect loved ones Financial Cliffbalance transfer property taxhealthy aging no retirement funds for down paymentretain separate credit cardsbuying car 2016tax refund fraudkid borrow firstdoctors in networkfile asapstudentunder 18 financial giftJose RodriguezFICO at least 720open enrollment review Most Influential Celebrities Listrequire chore in exchange for allowanceschedule vacation4 Must Have Documents insurance yearly reviewStudent Debt Crisisadult childrenlow mileage discountGay Couplesapproved medical 100% tax-freeHigh FICO Score = Better Rate10% donate to charityCNBCsave moneyloved ones dependent on incomecnbc alarm clocklower rateLTC shoppingemergency fund savingsARMraise your deductibletaxesfocus on new truth raise insurance deductiblenegotiate points with bank or sellerretirementFinancial AwarenessresponsibleHoliday SeasonFinal Goodbyebuy home you can affordautomate student loan paymentsspecial saving account30 year mortgage pay interest while in schoolitemized deductionMoneyinterest on student loansFinancial AdviceCollege of Veterinary Medicinefraudulent returncan you afford itgay marriage ban end Florida store credit cards740 credit scoreraise deductiblesstandard deduction holiday spendingcontribute household expenses Overspendingage appropriate goalshealthy retirement weightStudent Debtsame-sex marriagenot enough life insurancesidelinedsavingsdon't charge a pennymoney vowsUrbana-Champaignsetup automatic savings withdrawpay high rate off firsteight month living expense AARP Social security calculatorWashingtonshorter payback periodMarlo ThomasRevocable Living TrustHDHP's are not badpreexisting condition not coveredreal estate markethome related tax break bonus credit managementdo you need life insuranceexercise reguarlyget the most out of social security Cory Bookercar leasingdon't use allowance as bribeloan big picture wives should be involved in retirementescrowloan necessityalways use all paid time offSelfish50 over 50ritual scheduleHDHP/HSAallowance taskidentity theftdental insurance raising interest ratescostly legal keep a schedulecommissions2015 financial roadmapderailed planlower mortgage interestIRA contribution gifted moneytelevision hostis it true? premiumenjoy saving gift grandchild IRA contributionengaged in financesborrowing plan teach importance of helping othersverify retirement plan with HR or plan sponsorCiti Simplicity Card don't spend summer job match income one credit cardtraditional vs roth 401(k)20% down payment avoid feesone annual feeFinancialpublic service career student loan repayment reduce interest ratestaycationcut monthly cable billaccelerate dental workOne Wallet At A Timeonly offered while employed Giftsget over life insurance phobiaWillwomen long term carewaive home inspection bidPrime Rate Increasebuy homesuitableSuze Orman's Money WarsFinancial Systembest interest ratespercentage men widowed 75-84closing costs 2% of loanyours, mine & ourszero rate transfer dealslearn good financial choiceshome buying mistakesLegal Guardianno private loansrequired disclosurerefinancedebit card20 year level term Interestis it necessaryswitch to roth 401(k)pay more than minimumrefundlousy investmentuniversal college accessconfidentleave a legacy2017 Taxeshome insuranceEmployer Matched ContributionHDHP social security20% down paymentlowest cost fund optioncut monthly cellular billsuccessdon't blow tax refundunexpected expensefinancing car 3 bucket approachavoid burn outRevocable Trustcompare monthly expensesprotect your familyclosing disclosurereplace permanent life insurance with termAmy Lacyethome loan credit score below 740 15-year refinance dealwomen live longerultimate compounding giftExhibitionInflation Benefitprotect dependent low-cost index mutual fundmoney-aware childfull retirement agebudgetco-sign Foreclosurebreakdown projected monthly housing costoverspend on nights outmax employer matched 401(k) contributionVital Documentshealthy teethfinancial goal phraseLong Term Care Insurance don't extend mortgage iffy incomegraduationno tax on withdrawlsbe true to yourself40% toward financial goalreduce monthly paymentis it kind?Spendingwrite new goalfocus on needsknow before you oweFiscal ResponsibilityTeachFinancial EducatorSuze is my biggest mentorfinancial concernStudent Loando not pay allowance for good behaviorraising mortgage rates spring summer take actionUniversity of Floridano sneaking in feesreduce withholdingFederal PLUS loanSave Us Moneycomparison shoppingignore 6 month grace period mortgageinsurance mistakePersonal Financemarriage inequalityjuggle multiple financial goalsteach your child good money habitslong-term care premiums2016 adjust withholdingverify wellness screening and programs

View Blog & News List
People First. Then Money. Then Things.
Connect with me on Facebook Connect with me on YouTube Connect with me on Twitter
© 2017 Suze Orman Media Inc. All rights reserved.
 |  Search  |  Sitemap  |  Privacy  |  Terms
Sign Up For E-mail Offers
Open Panel
Close Panel