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How to Talk to Kids About Money—From Wespath’s Team

What do you do when your child asks for an expensive gift? What should your child do with the money earned from that first babysitting job? How can you help your child understand the importance of giving to others in need?

There's nothing easy about raising kids, and things can get extra tricky when finances come up at the dinner table. To help you tackle some of these challenges—and perhaps begin to have important conversations about money with your children—we polled Wespath employees to learn what they teach their children about finances.

A few trends emerged in their responses—happiness comes from relationships, not money; try to avoid bad debt; and it's important to use money to help others—but the wide array of answers suggests there is no one right way to instill financial literacy in your children.

We hope these stories give you some things to talk about and try with your own children. Click the age ranges below to see the stories.

  • Advice for Elementary and Middle School Children

    photo of Johara FarhadiehJohara Farhadieh; Deputy Chief Investment Officer
    My husband and I want to instill financial responsibility in our children and underscore the significance of savings. Our eldest son, who is 6, asked if we could buy him a Nintendo Switch video game device for his birthday in November. Rather than buy it for him, we struck a compromise: If he could save enough money, he would be the proud owner of the gaming device. In the summer, our son planned a lemonade stand and saved his earnings. As the year progressed, we calculated how much more was needed and strategized ways he could earn money. At Thanksgiving he hosted a magic show. Thanks to the sale of two VIP Grandparent tickets at $115 apiece, he reached his financial goal just in time for his birthday. Yet, amid the joy of owning his coveted Nintendo Switch, a realization struck: His funds were now depleted, leaving him without money for other desires like games and extra controllers. This prompted a post-purchase discussion about the importance of long-term savings, instilling the notion that financial planning goes beyond immediate gratification.

    photo of Joe HalwaxJoe Halwax; Managing Director, Institutional Investment Services
    Along with the youth pastor at our church, The Reverend Dr. Barbara Javore, my wife and I have talked to our two daughters since they were 5 or 6 years old about building a life that has meaning and purpose—that they will find happiness from relationships, not just money. I always say, "What's the use of having a big boat on Lake Michigan if you have no friends to enjoy it with?" Since around age 10, we also have incentivized them to save their money from things like birthdays and babysitting. I agreed to match any money they put in their savings accounts with the caveat that it cannot be spent until college. It has been a pretty good motivator.

    photo of Eileen KaneEileen Kane; Chief Financial and Strategy Officer
    Starting with money she received from gifts or earned from babysitting, I encouraged my daughter to always have a budget and to make sure that budget considers three primary categories: day-to-day expenses; savings for the near-term, whether it's emergencies or something she is interested in purchasing; and investing for the long-term.

    photo of Bill KavanaughBill Kavanaugh; Chief Operating Officer
    I gave my three children financial advice from a very young age. It started with a base allowance, with the ability to earn more through incentives like grades or extra chores.

    My advice to my children revolved around these key points:

    1. Money is a tool. Like any tool, used properly it makes your life easier. Used poorly, it can be dangerous.
    2. Spend less than you earn. If you want to spend more, earn more.
    3. There is acceptable debt (a deductible home mortgage) and unacceptable debt (credit cards, etc).
    4. Money will not make you happy. Family and relationships do that. Mismanagement of it, however, can make you very unhappy.
    5. Always have six months of current expenses in cash (like a savings account) for the inevitable rainy day. Invest excess funds prudently. Start now because the time value of money is a powerful force.

    photo of Sylvia PonieckiSylvia Poniecki; Director, Impact Investments
    My husband and I are both children of immigrants and the first in our families to earn college degrees. We have always been very open about education, money and finances with our two girls. We probably started talking to them about money and finances when they were around 9 or 10. We remind them to appreciate what they have in their lives because many people do not have access to basic things such as a nice home or a good school. For me, discussions around money often tie to explaining to them what I do for a living. Some pieces of advice we've given them over the years include: don't spend your money as soon as you get it, save over time because it pays off, and give back to the community and those in need when you can.

  • Advice for Teenagers

    photo of Cynthia DopkeCynthia Dopke; Church Relations Manager
    I have tried to advise my teen daughter on how to be a careful spender and saver and to consider whether she really needs something before she buys it. She tends to take time to decide whether she truly wants to spend money on things—whether it is clothes, collectibles or other items—that may look enticing but not be a good financial decision. I've also encouraged her to save up her money for things she really wants to buy for herself, which she does. She's been managing her own bank account, with my help, for several years now. At this stage of her life, I encourage her to spend money on activities that lead to positive social time with friends and to be generous in giving to charity.

    photo of Dale JonesDale Jones; Managing Director, Church Relations
    I gave my two children advice about money at different times, but especially as teenagers around the time of thinking about college majors and future career options. Here is some of the advice I provided:

    • Spend less than you earn, so you have some capacity to save and to help others who are in need.
    • Try never to borrow money or go into debt for something that will not increase in value.
    • Money is necessary and should be managed wisely, but doing something you find fulfilling and that contributes to the betterment of humankind is more important than making lots of money.

  • Advice for Young Adults

    photo of Lynn HammellLynn Hammell; Client Relationship Manager
    I've worked in financial services for 25 years. My daughter was 9 when I started in the industry. She received a steady flow of (money management) information starting in her teenage years. After she completed college, I strongly encouraged her to begin participating in the retirement plan offered through her employer, a charter school. She enrolled and has consistently participated in the employer-sponsored retirement plan since then.

    photo of Frank O'BrienFrank O'Brien; Benefits Educator
    Not surprisingly, when my two children began to work, I spoke to them about the importance of understanding and engaging with their benefits, and saving for retirement. I always emphasize the importance of personal savings and avoiding bad debt (credit cards). The former piece of advice was more challenging to get across because their generation tends to eat out, and be out, more—which adds to spending. The latter they understood and tended to avoid credit cards.

    photo of Dave ZellnerDave Zellner; Chief Investment Officer
    After my two children graduated from college, I advised that they purchase the budgeting and expense tracking software Quicken. The program lets you forecast your income and expenses by type of expense for the year. I recommended that they record every expense by type to the penny, compare with their budget and adjust their spending accordingly.

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