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Dad and son fishing at a lake. Dad and son fishing at a lake.
January 29, 2021
Financial Freedom

Fiscal Responsibility Lessons for Children


Have you talked to your children about their fiscal responsibility yet? It’s never too early or too late to begin instilling healthy financial habits in your kids that will help them as they grow.


If you’ve accumulated assets you intend to pass onto your children, it’s important to teach them fiscal responsibility today.


Here are some lessons you can teach your children to better grasp the concept of finance.



Think beyond savings


The good news is that many parents are comfortable discussing some aspects of finances with children. According to a survey by, 77% of parents talk about saving money in general with their kids. However, only about half bring up budgeting tips, and around 30% incorporate lessons on investments and retirement savings.


While these aspects of finance may feel distant for your child, they’re a reality they will eventually need to face. Lessons around savings — via a monthly allowance — may be easiest to explain to a child, but budgeting and long-term financial planning can also be incorporated into these teachings.


For instance, if you give your child an allowance, also sit with them to discuss what they may want to do with the money. Perhaps a holiday is coming up, so they should budget for gifts or a new toy they want. As your children grow, have them think about how they would need to budget for future expenses (like cell phone bills, car insurance and student loans).


Thinking about saving for the long-term and creating budgets creates smart savings and spending habits. This will help your children learn to better manage their assets while keeping up with recurring expenses like bills and rent in the future.


Money is an everyday decision


As an adult, you understand that your finances are something you think about and interact with nearly every day. To your children, however, receiving money or making a purchase feels like a special occasion (especially when they are young). While having a serious discussion around the importance of money is beneficial, it can also make children think that their finances are mysterious and that spending their gift could be stressful.


Parents should have casual conversations about finances with their children during their day-to-day interactions. When you’re at the grocery store or planning a family trip, involve your children in the purchasing process. For instance, you can ask them how much they think certain items cost at the store or how much a vacation activity would be.


These casual and often fun conversations show your children that money is a part of everyday life. They will be more curious about finances and have an understanding that money will be involved in many of their future decisions.


Money is earned, not given (as adults)


On the topic of engaging children and teens with their finances, it’s essential to help them learn that money is not something that is given to them — it is earned. When your kids are young, they will likely begin to receive money as gifts during the holidays and on their birthdays. While this is no doubt exciting for them, it can also lead them to believe that money is a given.


An allowance is a great way to begin teaching children to take control of their finances. If they choose to complete their chores or help out in other ways, they can earn cash. As stated before, this can also serve as the jumping-off point for many other fiscal responsibility lessons. When they receive their allowance, you can help them make a budget or determine which portion should go into their savings and which can be spent.


Additionally, you can let your child use their allowance money to make their own purchases (like for candy or a new toy). This will help them understand the value of a dollar and how far their money can go in the real world. By making their small purchases, they will need to make decisions and learn smart spending habits.


Take care of your credit


When your children are older, you can begin discussing more complex financial topics, like credit. According to Forbes, discussing credit scores with young adults is an essential conversation to have before they begin opening credit cards or heading off to college.


Explain to your teen what a credit score is in terms they can understand. An easy way is to say it’s a number determined by their financial habits that tells lenders how trustworthy they are. Tell them that this score can affect their ability to receive a home or car loan, and it could even affect their employment or future housing options.


Make sure they know the importance of paying their bills on time, as well as what their credit utilization rate and the length of their credit history mean to their overall score. While teens may have limited options to grow their credit, they can start building it with a credit card or by becoming an authorized user on one of yours. Help them learn how to pay their bill and check their credit score along the way.


Freshen up your financial knowledge with Trustmark


If you need a refresher in fiscal responsibility yourself or are looking for more ways to teach your children about smart financial habits, Trustmark’s Financial Literacy Toolkit can be of assistance. This free online financial education tool can help you manage your money and gain more confidence in your fiscal knowledge that you can pass on to your children for years to come.


Trustmark is here to help you take positive steps toward reaching your financial goals and helping the next generation learn smart fiscal skills.

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