Credit Law Center Teaching Credit and Money to Our Children

Teaching Credit and Money to Our Children – Credit Law Center

From the day we bring home our children from the hospital all we want to be the best at guiding them and teaching them. It’s a no brainer we will be the one teaching them to tie their shoes, brush their teeth, and most of us will be that one parent waiting up for them until curfew. Did you ever think of how important it would be to teach them about credit scores and cards?

Honestly, I can say I didn’t realize I would be worthy of teaching them! After a failed marriage and adjusting to the daily financial struggles of being a one income single parent family, I finally feel I have the knowledge to teach about credit. Recently my teen daughters had a discussion about my job and the importance of Credit, to my amazement they knew more than I imagined.

As a rule, children are like sponges, they sit back and observe their parents daily as they deal with finances, they witness the emotional effects money can have on their parents. This explains why my girls knew so much. My children have watched me go from the bottom not owning a home, not financing a car, having past due utilities to finally succeeding.

In addition to our daily interactions, there is some key some key tips to help guide them into being financially stable adults.

Set the Example

Your kids are already watching and sensing your emotions when it comes to finances, it never hurts to have open communication with them. Explain to them why you want to save your money, instead of the fancy vacation or the shiny new car. Children will pick up their habits from you, it is natural for them to be products of their environment. If we want to make them financially productive adults, we should do our best to show them we are as well.

Tell Your Kids No and Make them Earn it

As a parent we all know that children can be demanding at times and want unecessary items, however telling them no is an important lesson. This could be a hard lesson as we live in a society with so much instant gratification, however making them save thier allowances, birthday money or even do extra chores to reach obtain the item is teaching them to be self-sufficient.  As the child gets older encourage them to seek out other opportunities to earn money for them, like babysitting, mowing lawns, or tutoring.

Teach them about Cash

Teach them the value of cash and to keep it safe. Younger children you may want to keep it in a bank at home and count it regularly, so they will value the dollar amount and see it as a tangible item. The older they get you may want to start a children’s share account at the bank or credit union you bank at, this will also teach them about interest and the value of saving.

Never overextend or forgive a loan

If you loan your child money it is important to never loan them more than they can pay you back, just like credit limits over extending sets them up for failure. Keep their goals realistic for their financial means. Create a contract, make them sign it and stick with it, include interest, late fees, find creative ways to make it fun for them.


As Children mature there are many different financial institutions that have programs that encourage and help parents and caregivers raise financially stable adults. The CFPB has a Money as You Grow book club for children ages 4 to 10, to help assist families to learn key money concepts by reading, play, and quiet one-on-one talks. They also have a great chart on the ages kids develop different money skills.