You taught them how to read and ride a bike, but have you taught your children how to manage money?
The average debt for student borrowers is $38,375, and 10.3% of new graduates default within the first three years of repayment.¹ ²
For current college kids, it may be too late to avoid learning about debt the hard way. But if you still have children at home, you can save them (and yourself) some heartache by teaching them the basics of smart money management.
Have the Conversation
Everyday transactions are opportunities to talk about money.
- At the grocery store: compare prices and stick to a budget.
- At the ATM: explain that it’s connected to real accounts, not just “free money.”
- With a credit card statement: show how swiping a card equals money leaving your pocket.
Let Them Live It
Allowance programs tied to chores can teach the connection between work and money.
- Add incentives or bonuses for exceptional work.
- Create budgets for items like clothing, and let your kids make spending decisions.
- These lessons help children learn wants vs. needs while stakes are still low.
Teach Saving, Investing, and Retirement
- Offer savings matches (e.g., $0.25 for every $1 saved).
- Once $1,000 is saved, open a custodial investment account and review performance together.
- Consider funding an IRA if your child earns a paycheck.³
Allow Mistakes
Don’t get discouraged if they ignore your advice. Mistakes can leave lasting lessons. Resist bailing them out—the natural consequences are powerful teachers.
Sources:
- EducationData.org, 2025
- EducationData.org, 2025
- Note: Once you reach age 73 you must begin taking required minimum distributions from a Traditional IRA in most circumstances. Withdrawals from Traditional IRAs are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal penalty. Contributions may be deductible depending on adjusted gross income.
Disclaimer:
The content is developed from sources believed to be accurate. It is not intended as tax or legal advice and may not be used to avoid federal tax penalties. Please consult professionals for advice regarding your specific situation. This material was developed and produced by FMG Suite to provide information on a topic of interest. FMG Suite is not affiliated with the named broker-dealer, state-, or SEC-registered advisory firm. Opinions expressed are for general information and not a solicitation for the purchase or sale of any security.
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