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Teaching Your Children to Become Financially Independent

Children cannot wait to grow up. They hate the rules when the rules conflict with wants. They despise restrictions that keep them from doing whatever they please. They want to watch the Simpsons. They want to walk to Jimmy’s house alone. They want to stay up late. They want to do all these things, but they are restricted by their parent’s firm response, “No.” When petitioned why, parent’s respond with, “You’re too young.” This response is taken like a knife to the stomach.

If Mom had said that the child could be hit by a car on the way to Jimmy’s, the child could promise to be safe. If Dad had said that staying up late would only cause grumpiness, the child could deny it outright. These things can be fought with simple reason. A child can choose to be careful, or choose to be happy. What a child cannot choose is their age or size. Those come naturally, and they’re stuck. It’s a three word death sentence to all children.

Yet, as children grow, that desire for complete autonomy doesn’t diminish. Their freedoms increase, but so does their appetite to do everything. They can now walk to Jimmy’s, but they’re begging parents to let them drive instead. They can finally stay up late, but now they want to live in their own apartment. They can watch the Simpsons, but now they want to go to a rated ‘R’ movie at the age of 13. They still know what they want, and can’t see the beauty of staying young.

They can’t see it yet, because they haven’t had to provide for themselves. They haven’t been enveloped in the terror of not being able to pay the bills. They haven’t known the sorrow that comes from using half of your paycheck to a mortgage, utilities, insurance, food, and a cell phone. They haven’t seen that the real world is unrelenting.

Adults no longer have 100% of their earnings to buy whatever they want. Adults can’t take 3 months off of work to do nothing all day. Adults can’t be carefree about deadlines and relationships; instead, they have to foster success in both. Children have an endless array of inspiring opportunities before them. Adults are now looking at those opportunities in the face and making choices. These choices affect the rest of their lives. Those wonderful opportunities quickly become terrifying burdens that many refuse to face head on. It’s so much easier to ignore those choices, hoping someone else will make the decisions. The time between the carefree lifestyle of being a child and the real world begin taking affect the instant children leave their homes for their new apartment. Without realizing it, they step into a world that will consume them if they’re not properly prepared.

As parents, there are many things that you can do to prepare children for the world ahead of them. You can start as early as 8 years old or as late as the moment they call home worried about finances. You’ve been there, you know what the transition is like, and you’ve succeeded at it. (If you doubt whether or not you’ve been “successful,” then ask yourself if you’re still breathing, have a roof over your head, and food on the table. If you do, than that’s success staring your straight in the eye.) The first thing you can do is empathize with their position.


When your toddler can’t afford a new toy and your adult son can’t afford his ’92 Dodge Neon anymore, don’t jump to fixing the situation yet. Instead, empathize with how they feel about it. Be sad with them. Tell them a story of similar sorrow and let yourselves feel bad about it for a little while. It’s okay and healing to do.

Once you’ve been properly empathized with, begin by talking them through the problem. Ask them what went wrong and why they can’t afford it. The adults may realize they’re spending too much on things that don’t matter. The child may realize they’re not being patient enough (this last one is very unlikely, but it’s possible). Help them see the problem for what it really is before you try to advise them on how to fix it. Usually they haven’t quite figured out what the underlying problem was in the first place. Once they realize why they can’t afford those things, they’ll begin figuring out solutions for themselves. You won’t have to do a think except give advice when advice is needed. They may ask you for financial help. Be wary about giving it as it won’t teach them to be financially responsible. They’ll learn to come to you to fix their problems instead of figuring it out themselves. Remember that you want them to become financially independent. You don’t want them running to you every time their spending goes awry.

Follow this pattern of empathy and identification for children of any age. You’ll teach them more about personal responsibility with money than you ever could by saving them from every financial distress.


The next thing to teach them is how to work. This is an easier principle to teach while they’re young. The earlier you start the better. Give them work to do around the house and hold them accountable for it. They should learn to go through the motions, do a good job and get inspected for it. That’s what they can expect in the real world, so why teach them anything different? Obviously what you consider a “completed job” will have to vary based on age. You will have to be more lenient with a 5 year old than you would with a teenager. Whether they’re cleaning a dish or in charge of the dishwasher for a week, teach children to expect work.

When they’re old enough to get a job, encourage them to do so. Make them buy their own car and driver’s license. Tell them that if they want to go out with friends that they have to pay for it themselves. Teach them the value of earning a steady paycheck to get what they want. They’ll unconsciously thank you for it when it becomes obvious that they need a second or better paying job to afford to ski on the weekends.

For children that grow up their whole lives working, it’s less of a shock that they will continue to have to do so in the real world. They’ll know how to put their minds to a task—even if it’s dull at times—and get it done. There is unparalleled value in teaching a kid to work. The world is a much less intimidating place.


Just as no bad deed should go unpunished, no good one should go unrewarded. Teach children that when they work hard, they get something for it. That reward can be an allowance. It can also be a new game or time to play with their father. The reward should be something that they want, within reason. Obviously you wouldn’t buy a 16 year old her first car because she took out the trash. Assign a fair equal value to each labor and give rewards to each child that does good work in the house.

Reward for Grades

You can also do this with grades. If grades are important to you and your family, then you have a great opportunity to teach them how to get a scholarship. You can start as early as elementary school. Tell them that if they get an ‘A’ on their report card, they get a reward. Increase that reward as they grow older and make it worthwhile for their kids to shoot for. As they continue to strive for straight A’s, they’ll learn that you can get rewarded for good grades—namely scholarships to afford college. When they grow up seeking A’s, it will be easier to obtain them throughout High School and College, diminishing the financial burden to afford a university education.

Only Reward for Work

Watch out for the temptation to reward them for nothing. Don’t give them an allowance because they somehow “deserve it” for taking up space in the house. The temptation is easy to fall too—especially since you probably got one growing up. This only teaches children that they can do absolutely nothing, and still get a paycheck at the end of the week. As happy of an existence as this is at home, no one is going to pay them for sitting on a couch all day. They could always live off of food stamps, but is that what you want for your children?

Teach them that a reward comes from good work and avoid giving them something for nothing. They will thank you for it when they grow up, and they will ask how you did it when they become parents.

It is the parent’s responsibility to teach their children about financial matters. You can, and should prepare them long before they leave the home to be financially independent. Doing so will ease the pain and sorrow that would otherwise be theirs for the first years of independence. Commit to prepare your children today.

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