Thursday, April 21, 2011

Single Parents Raising Financially Savvy Kids

Today's guest post is courtesy of Suzanne Cramer, a single mom and certified Credit Counselor. Today she's handing out tips on how to raise a financially fit kid! Enjoy!

As single parents, we do our best to teach our kids how to tie their shoes, use their manners, and develop a sense of self. With all the responsibility of teaching them the everyday tasks we often forget the importance of “life skills”, such as money management.

Financial experts disagree about many things, but when it comes to teaching your kids financial awareness, they all agree it’s important and should be a skill we model and teach early on.
What should your kids know about money management? By the time they leave “the nest” they should have a firm grasp of the below:
  • The importance of saving,
  • Keeping track of money (a piggy bank, balancing a checkbook or online bank account).
  • Budgeting (living within their means).
  • Managing credit wisely.

How do we teach these skills to our kids and help them to establish a good relationship with money?

There are several concepts we can teach through our everyday actions and interactions with our kids.
  • Reality.  Be “real” with your kids. If you can’t afford their latest wish for a new bike or video game because it doesn’t fit into your budget, express this to them by saying, “We can save for this, but I just can’t afford to buy this for you right now.”
On the flipside, if you can afford their wants avoid constant indulgence. By giving in all of the time they can develop a sense of entitlement and an “I can get want I want without working for it—that’s how the world works attitude”. (A.K.A. spoiled brat syndrome.)
  • Money mistakes have consequences.  Just like other life skills we try to teach our kids the mantra, “For every action we take there is a reaction”, and sometimes that comes in the form of a consequence.  By allowing kids to make mistakes when they are young and you are still around to back them up, they will be better prepared to handle situations involving money later in life.
  • Erase the “I want it now" mindset.  Kids are exposed to consumerism the same way adults are from ads on TV, electronic devices, and the online world they live in. Teaching your kids to work hard for what they want and save for those “must haves” develops not only a good relationship with money, but character and values that are not as easily taught in other areas of life.

Valuable Money Lessons

There are several ways you can teach your kids valuable money lessons by giving them the independence and freedom to make their own decisions—good or bad.


The jury is still out for the amount of allowance that should be given to kids to teach lessons and develop good habits. My son started receiving an allowance at age 5. While this may seem young he has developed some really sound money management skills and is only seven years old.

The way we handle allowance at our house is via a chart on the refrigerator. The amount that can be earned is $1 for each year of age, so he is currently up to $7/week (soon to be $8!) He has both daily and weekly tasks that must be accomplished in order to earn the full amount. In addition money can be taken away for bad behavior at home or school.

I took a few moments last night to ask him a few questions about his allowance and how he feels about it. Here are my questions and his responses:

1.  What do you like most about getting an allowance?
I can buy things when you say no.

2.  How do you feel if you don’t get all of your allowance one week?
I feel sad because sometimes I don’t have enough money to buy what I want.

3.  What happens when you get in trouble at school or don’t listen to mommy?
I lose some of my money and I have to wait longer to buy something.

4.  How do you feel about doing things to earn money?
I like to help you around the house and get money for it.

5.  How do you feel about saving some of your money each week?
I really like to go to the bank and see how much I have in there for when I get bigger.

Sometimes kids can really surprise you and even through the simple exercise of an allowance system they can learn valuable life lessons. I feel like my son has learned 3 very important things from receiving an allowance; budgeting for what he wants, actions have consequences, and saving is important.


I allow my son to make his own choices as to what to do with his allowance with one stipulation—he must save half. So that means today, he has $3.50 to spend weekly and $3.50 that must be saved. At this point he is not responsible for buying his own clothes or food unless it is something outside of our family budget for these items. As he gets older and receives “raises” I may make him responsible for budgeting for snacks, clothes, and that cell phone he feels he needs now, but I vetoed until age 12.

Set an Example

My son has a slight advantage over other kids when it comes to developing good money management skills. My career focuses on educating others and encouraging financial literacy, so it is no surprise that he sees and hears a lot about managing money. The most important skills you can model are:
·      Paying bills on time
·      Saving your own money
·      Avoiding impulse purchase for yourself or your kids
·      Regularly reviewing your budget and adjusting along the way
·      Talking about money, it’s not as taboo as we make it out to be.

Raising kids alone is a daily struggle, but you have the ability to make a difference in their lives and help them to become strong, independent, financially savvy adults. Just making a conscious effort to sneak in a few of these lessons will help your kids and ultimately prepare them for their future.

Suzanne is a certified credit counselor working and a Social Media Specialist for CareOne. Suzanne writes for Divorce, Debt and Finances and A Straight Talk on Debt blogs.  Follow Suzanne on Twitter where she shares the latest debt industry news and tips to keep your finances in check with her @ADivorcedMom and @AskCareOne accounts.


  1. I dont have children to teach about this but these tips are great for me. I wish when I was younger I saved and managed my money better! It's never too late...

  2. These are great tips and suggestions for parents in general. Even though I'm now married, I still like to budget my money and make financial decisions as if I'm still a single mom. Times are hard in this economy and anything can happen. So, I'm learning to think smarter!

  3. @Sunshine You are absolutely right it's never to late to start practicing good money management and saving for a rainy day!

    @YUMMommy Good for you! Being prepared for the "what if's" financially can keep you out of debt and eliminate money stress.

  4. You know how much I love this! Financial literacy starts young and by example!


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