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Financial Advisor Tip: Personal Finance for Kids

At Advanced Wealth, our specialty is helping women spend smart and build a plan for the future with the help of a financial advisor. And while we’re teaching you all about how to make your money work for you, don’t forget that kids need to learn, too. After all, it would be pretty outrageous teach them little about money and throw them into the real world when they’re 18 and expect them to know what to do. With kids of all ages in mind, and proving that there’s never a bad time to learn about money, take a look at our recommendations below.

Personal Finance for Pre-School to Kindergarten
As soon as kids are old enough to count, they are old enough to understand what money is. Now is a good time to explain to them that things like toys, candy, food, etc. all have different prices. For example, explain to them that if one toy is worth $10 and other toys are worth $5, they can either have the one expensive toy, or two of the $5 dollar toys. Kids at this age are also able to understand that parents go out and work hard for money, which is why it shouldn’t be spent haphazardly.

Personal Finance for Grade School
Kids at this age are beginning to get money of their own via allowances, chores, birthday gifts, etc. Parents can explain to kids that this is their money and they can spend it however they want now, while encouraging them to save for things they want in the future. A good idea for these kids is to let them shop around for what they want themselves in order to find the best deals.

Personal Finance for Middle School
Bigger kids now have the ability to earn even more money by doing things like babysitting, yard work, paper routes, etc. Their desire for things like video games and clothes is also getting more expensive, which is why it’s a good idea to teach them about the concept of saving a percentage of their money towards their goals and helping them estimate when they can make a purchase. Parents can also help out by offering to match their savings or hiring them for more complex chores like washing the car, helping with the “honey-do” list, and other more advanced work they will need to know as adults.

Personal Finance for High School
Depending on what state you live in, teenagers can legally seek employment outside the home at around high school age. In Texas, children at 14 can get jobs outside the home. A child’s first official job outside of the home is an excellent opportunity for them to learn which jobs pay best, which skill sets they have to get the best jobs (skills they may have learned in middle school), how to open and maintain a checking account (with a parental co-sign), and even how to file for taxes. Saving is mandatory at this age since teens want clothes, cars, and to go to college, and helping pay for it themselves brings a better chance of them treating their purchases with care. For example, a teen with a financial stake in his or her car is less likely to drive recklessly and put it in danger. In addition, a teen who helps pay for their own college education is less likely to miss classes or drop out.

For more information on Texas Child Labor Laws, click here.

And if you are a parent looking to build a better future for your family and need a Houston financial advisor, click here to contact us.