How To Teach Children Money Responsibility!

Kristina: Welcome, impactful parent. Today we’re going to show you how to teach your children to be money pros. Hello, my name is Kristina Campos. I’m the founder of The Impactful Parent, and welcome to my Inspire and Learn series where real parents come on and tell their story of inspiration and learning; because a wise man learns from his mistakes, but a wiser man learns from others people’s mistakes. Today we’re going to learn from Chris Larson. Chris is a self-made entrepreneur. He is passionate about helping families. He wants every family to get rid of the money burden and rest assured that they have prepared for the future. So he has developed a system for even teaching successful financial habits to his own children. And today, Chris is going to give us five ways to set up your kids for financial success and create lasting wealth for your family. Welcome to the stage, Chris.

How To teach money responsibility

Chris: Kristina, it’s awesome to be here. Great to see you today.

Kristina: How will my audience relate to you, your family, and your financial success?

Chris: I wrote my book to help people take a shortcut and learn from all the mistakes I made. I love that intro because, you know, I don’t consider myself a wise person. You know, I made a lot of mistakes, but I’ve had a lot of people help me out along the way. And unfortunately, I learned from real-life experiences. My father passed away when I was five years old. I grew up dealing with the stress of finances and cleaning up the mess after my father passed away. He died in a plane crash. He was a pilot. We went down in Lake Michigan. My mother couldn’t get life insurance because they wouldn’t issue a death certificate because they couldn’t find his body for some time. I remember that we went on Social Security. My grandmother made my clothes for us. We ate vegetables out of cans. I got made fun of them for the clothes I wore and picked on for those things. Then my mother got remarried, and we were back on our feet for a while, but that didn’t last. I’ll never forget both my parents losing their jobs when the real estate market crashed in the early 90s. I lost my internship coming out of college because of the tech crash of the late 90s early 2000s. And then, I watched my real estate portfolio drop in 2008 and 2009.

If you are going through these challenges, what I can tell you is there’s a light at the end of the tunnel, and you can come out through the other side. But I think the most important thing to focus on when we’re in stressful times is the fundamentals, especially when it comes to money. I realize many people struggle with how to convey good money sense and practices to their kids.  So, that’s what I’d love to talk about today. You can do five easy things to set your kids up for a lifetime of financial success.

Kristina: What is your tip number one?

Chris: Start having conversations about money and get your kids a bank account. Show them what money is used for. Talk about how much groceries cost. You don’t have to talk about how much you make. You don’t have to talk about how much money you have in your retirement accounts or your house costs, but show them what money is used for. And again, start a bank account. If you haven’t done this yet, go to your local bank and set up what’s called a custodian account for your child.

How To teach money responsibility

Kristina: I love the suggestion of taking the kids to the bank with you. What’s your second tip?

Chris: I actually pay my children a salary. I don’t call it an allowance. It is a salary, and my kids get $1 a day. Now here’s the thing, they don’t always get their dollar.  If my son leaves the lights on, he’s wasting resources. Maybe he leaves the door open or doesn’t pick up his clothes or do his laundry, then he may not get his dollar, or he may get money deducted from this account. Basically, if he does his chores and is respectful, he gets his money, but just like any other “job,” he doesn’t get paid if he doesn’t show up.  If your child is disrespectful, they may get a deduction.

I also have my child keep track of their account balance with a ledger. He writes down what money comes in and what money goes out.  He also uses that money to buy things for himself.

Kristina: I love the idea of having kids earn money and keep track of it.  These are great skills. What else do you have for us? I love these suggestions.

Chris: Tip number three is to teach them about investment and the importance of saving. Teach them that they can be disciplined before spending. Require your children to save 10-50 % of their earnings. For the older child with a job, start a Roth IRA. A Roth IRA has a lot of flexibility and is very similar to a custodian account.

Kristina: Smart. Saving and investing are important! And what do you have for tip number four?

Chris: Now we are getting into a little bit more advanced strategies. My next tip is to start a business. Start a lemonade stand, shovel driveways, mow lawns, or whatever your child wants to do. Starting a simple business with them will teach them money control, managing expenses, talking to people, marketing, and so many other great skills. Nothing has to be complicated.

How To teach money responsibility

Kristina: That’s my favorite suggestion yet. Entrenpeur skills are a great thing to teach your child. Plus, the quality time you’ll get when you sit down with your kids and help is awesome.  Kids can do so much!  They can make bracelets for their friends. They can bake cookies. The possibilities for a business are endless.

Chris: And tip number five might be a little bit controversial. Teach children the true cost of college. There are a lot of studies out there that say you’re better off if you go to college. You’re going to make a million dollars more than if you didn’t go to college. We have to remember that these studies are done on people going to college 40-50 years ago. College is a lot more expensive right now. I’m not saying to discourage your child from going to college. Children need to understand the return on investment from going to college. So this is what I mean.

Suppose I took $100,000 of college tuition and instead invested that money at 10%. Would it be worth more than a million dollars throughout their lifetime? College may or may not be the best choice for everybody, depending on their career path. Make sure you evaluate all these things, and there are many resources out there to help parents do this now.

Kristina: And your 5 tips are not all!  You have two freebies for my audience today.  The first is a cheat sheet PDF that summarizes the 5 steps.  The second freebie is your e-book! Thank you for these great resources.  Audience members can get those FREE by downloading The Impactful Parent App and finding those resources attached to this video. Go to theimpactfulparent.com and download the FREE APP today!

And if people want your assistance and want to reach out to you, how would they do that?

Chris: I am at www.nextlevelincome.com. Please reach out or email me!  I am here to help.

Kristina: Thank you so much, Chris. I really appreciate you being here. And if you have an inspiring story and want to share your story with the audience so that others can learn from you, go to https://theimpactfulparent.com/work-with-me  and sign up!

 And if you want to become a more impactful parent, check out all that my website has to offer. I have parenting courses, family coaching, a free downloadable app, and many free resources. But until next time, you got this, parents. I’m just here to help.