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Financial Wellness for Kids!

By Lia Whisler, CFP®, AIF®
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The best gift I ever received from my parents growing up was my very own checking account when I was 12 years old. This may sound a bit dull at first, but the gift was much more than the physical checkbook and debit card I was so excited to use back then. That was the year I started my financial education. It may not have been the easiest lesson to learn how to save my allowance for the exorbitant number of new music CDs I wanted, but it set the stage for both long-lasting good money habits as well as for the career I love so much.

As my daughter turns 3 this month, I have been thinking a lot about how, and when, I should begin her own financial education. Starting a foundation of financial wellness can help teach life-long skills, some of which aren’t even about money, and these concepts will stick over the long-term as they are consistently and continually repeated over time. It’s never too early to get started, nor is it ever too late! After all, every journey begins with a single step, and each lesson is a step in the right direction. So with kids and grandkids home for the summer, here are some ways to help get the children in your life started with their own good money habits:

Pre-school: Pre-money concepts

Many of the basic money terms we use today are built from a foundational non-money concept that kids already have a surprisingly intuitive understanding of. Here are a few examples of common money terms that can be translated into non-money ideas pre-schoolers will understand:

  • Saving – When we talk about saving, we are really talking about delayed gratification. How many times do we find ourselves telling our kids or grandchildren who try to snack all day that they have to save room for dinner? Or that they have to wait for the holidays to get that one special toy they are eyeing? Kids catch on surprisingly quickly to this idea that sometimes they can’t have everything they want right now if they want something better later on, so chances are you are already teaching your kids about saving without even knowing it!
  • Diversification – A good way to think about diversification is to remember the adage, “don’t put all your eggs in one basket,” which is a lesson you can teach quite literally. Uh-oh, what happens if all my daughter’s favorite crayons are in one bag and then the monster under the bed comes and takes them away? Guess it’s a good thing the monster felt bad and gave them back so we could diversify them into a few different bags this time.
  • Currency – We use money because it is a currency that allows us to trade the things people value differently. And anyone who has witnessed a classic Terrible Twos Tantrum is quite familiar with the fact that toddlers do indeed place a high value on certain things and that their laser-focused minds will do almost anything to have those things. Fruit snacks are the currency of choice in my home. However, they are only exchanged after a fuss-free buckling of the car seat!


Elementary school: Money basics

As children start to enter school, this is a good time to start translating these foundational concepts into real money language. Taking a few minutes to intentionally teach kids about the real currency of dollars and cents with something like an allowance as a reward for chores gives them the opportunity to then put the lessons of savings and diversification into practice.  Fruit snacks may still be a valued item, but how much actual money will they need to trade to get some? And how long will they need to save to get there? And what happens if they spend all their money only on Paw Patrol fruit snacks but then later wish they had diversified because now they want Hello Kitty fruit snacks? Children at this age can start to tolerate the basic “hard” lessons for the consequences of not having good money habits, and they start to value the benefits of being money-savvy too.

Middle school: Putting it together

At this age, kids now have the capability to start putting the puzzle pieces together. They can handle the cognitive load of saving for multiple highly-coveted items and they understand the basic math needed for creating and tracking budgets. As individuation begins, they also enjoy the sense of independence and control they get from having some ownership for the things they buy. Moreover, this is also a good age to teach kids that not everything has monetary value. For example, introducing philanthropy shows kids that sometimes giving away some of their hard-earned money not only helps others, but actually makes them feel good too!

High school: Real-life application

As kids grow into teenagers who are staring at the gates of real-life, it is time to show them that all these bite-sized lessons over the years were actually part of a much bigger picture. Earning income at a real job may replace an allowance, and teaching kids the longer-term saving concept of retirement, as well as retirement-savings tools such as IRAs and 401(k)s, will help provide context when they come across these terms later, as will teaching them investing basics. Talk with your Osborne Partners team to explore other needs that might be appropriate to discuss with the younger members of your family.

Most importantly though, it is imperative to teach the power of money at this age before it’s too late. Credit cards, student or auto loans, and mortgages can all be good things.  But credit scores are real and can be insidious if debt is not managed efficiently! As with all these money lessons, they are better learned from you instead of risking they aren’t learned at all. I mean, you wouldn’t give your teenager the keys to your Aston Martin before teaching them to drive first, right?



Lia Whisler, CFP®, AIF®

Lia Whisler, CFP®, AIF®

Lia is a Portfolio Counselor at OPCM with over 10 years of experience in the financial services industry. Her experience spans management and client service at some of the largest investment management and advisory firms including Dodge & Cox, Vanguard, and Merrill Lynch. Lia’s passion has always been using her extensive knowledge to create financial plans. Lia graduated from Harvard University with a Bachelor of Arts degree in Psychology, and earned her MBA at the UC Berkeley Haas School of Business. She is a CERTIFIED FINANCIAL PLANNER practitioner, holds the Accredited Investment Fiduciary® designation, and is a CFA Level III Candidate.
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