Desoto County News

Six money moves to teach your children for life

By: Charlestien Harris

Personal finance is not a subject most of us like to talk about, but it is one that needs to be discussed with our children – because when they grow up to be adults, they will have to manage money on their own. 

In most families, the subject of money or the discussion about a person’s finances is taboo and is almost never mentioned again until adulthood sets in. As parents, we need to take every opportunity to expose our children to money situations so one day they will be able to handle their own wealth in a responsible way. There are six areas that children should be quite knowledgeable about or at least be aware of: how to know the difference between wants and needs, how to budget, how to save, how to use credit wisely, how to deal with debt, and how to conduct daily financial business properly. 

  • Teach your child the difference between wants and needs.
    Children often don’t make any decisions around purchasing their needs, since these things are most often provided by the parent or guardian. Teaching kids to know the difference between what they “need” and what they “want” does not have to be difficult. You can begin by first defining a need as something you must have to survive – like food, water, and a home. A want is something that’s nice to have, but you can actually live without – like a toy or a new pair of shoes. Use every opportunity to identify needs or wants by introducing the vocabulary into everyday moments with your kids. Whether you are budgeting or planning ahead for the month, give your child the basics when you are done. This practice should be kept up as they get older. Share what the needs are for the family and explain why those get priority.
  • Teach your child how to budget.
    This skill can be taught as early as the age of 6. Teaching children how to budget at a young age will be beneficial for the rest of their lives. When your child gets money as an allowance or as a gift, you can help get them started with simple budgeting concepts. It is also valuable for your children to see how you budget, but start small. For example, allow them to help you plan the weekly grocery shopping. You can turn a grocery shopping trip into an educational opportunity.  Remember, children will learn from your example. So telling them about budgeting is important, but it can have more of an impact when they see you following a budget yourself.
  • Teach your child how to save.
    When your child earns money, they should first set aside a portion for savings. The recommendation is to save at least 10% of earnings. This percentage can be increased for children because they have fewer expenses. Savings can be accumulated in many ways. Some use a jar, piggybank, or even a joint bank account to gain interest. The savings account should be kept for emergencies or for longer-term goals. Make a trip to the bank a learning event. Help your child to open an account (such as a Southern Bancorp School Savings Account), and encourage them to make regular deposits. As the balance in the savings account grows, you can discuss the concept of interest and how the bank “pays people back” for saving money.
  • Teach your child about using credit wisely.
    Using credit instead of cash is a very important lesson your child should learn. As an adult, you may not always have the cash to make necessary purchases to meet the family needs. When talking about credit, you could start with explaining why credit matters and how it can impact different aspects of life. For example, you could talk about how your credit history is considered when you apply to do things like buy a car, take out a loan, rent an apartment, or get a job. Credit reports, and credit history, can be compared to a school report card. Then you can make a comparison between the benefits of maintaining good grades with maintaining a good credit history. Show your children your credit card statements and point out to them how long it will take to pay off your balance and how much extra you will pay in interest if you only make the minimum payment each month.
  • Teach your child how to manage debt.
    Like the previous money skills I have mentioned, debt is an important concept we should be explaining to our kids early on so they won’t fall prey to its grasp later in life. A very simple definition of debt is anything owed by one person to another. A promise to repay a debt is a serious matter that should be thoroughly explained in such a way that the child understands the consequences that can occur when an obligation is not fulfilled as promised. Don’t use a credit card to purchase items if you can’t pay the bill in full and on time is one example you can use to teach this principle. But it’s important that kids understand from an early age that nothing in life is free. You should try putting a system in place that requires them to pay you back. It reinforces responsibility, one of the most important traits they can take into adulthood. When you are explaining debt to kids, it is also important to make the distinction between good debt and bad debt. Good debt helps increase a person’s net worth and value; bad debt can be characterized by someone spending outside of their means and can cause overspending. 
  • Teach your child how to become financially responsible.
    When I was a child, I remember my father laying all the bills out on the kitchen table along with the checkbook and the bank statement. He allowed us to open the bills and write the check amount for each one. Then, when he got ready to pay the bills, he took us to the electric company to pay the utilities, the bank to pay the mortgage, the grocery store to purchase food, and to the post office to mail other bills such as the car note. My son reminded me of the importance of knowing how to survive financially once he was out of my house and living on his own.  

Teaching your child how to be financially independent is one of the best things you can do to ensure your child can navigate through life on their own with confidence. It’s never too early to learn more about money.
For more information on this and other financial topics, you can call me at 662-624-576 or email me at  

Until next week – stay financially fit!

Charlestien Harris is a financial contributor to DeSoto County News. She is a financial expert with Southern Bancorp Community Partners whose articles are seen in a number of publications around the region. You’ll be seeing her columns weekly on the DeSoto County News website and our social media channels. 

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