I love whenever anyone’s best tips for raising money-smart kids. However, Kiplinger’s Personal Finance Magazine holds a special place in my heart. I’ve been reading Kiplinger’s since I was a kid. My mother subscribed to it, and I was interested. She had explained compound interest to me a long time ago. In ancient times (around 1988), banks paid a real interest rate – about 7-8%, if my memory serves. I had some money saved from my paper route and first job at Papa Gino’s Pizzeria, so it seemed like a good idea to learn more about investing worked.
A lot of personal finance is now online (such as this site), but I’ve been a Kiplinger’s subscriber since college. You can get a couple of years of it for around $40, which is a great deal compared to the cover price of a whopping $6.99. I’m all for recognizing the value of financial advice, but that’s a lot of money for 72 ad-filled pages of often out-of-date information. It shows how challenging the print world is nowadays.
Today, I’d like to cover Kiplinger’s tips for raising money-smart kids, spread out over two issues last year. Specifically, I’m talking about Janet Bodnar, who runs the Money Smart Women column. Fortunately, the column covers some fathers with tips about raising money-smart kids. Personal finance should be something for the whole family. My family is a real-life example of it. It’s just that I have a crazy obsession.
Part 1: Kiplinger’s Tips for Raising Money Smart Kids
In the first article, Janet Bodnar covers What Kids Need to Know About Finances. She’s written the book Raising Money Smart Kids, but to be fair, there are more than a few books with that title.
The article points out that high-net-worth women have jumped into estate planning due to COVID. These families with a lot of money want their kids to know how to handle it. We fit that profile too. However, I’m far from the stage of worrying about how my nine and 10-year-old boys will manage money years from now. I want to help them to build a foundation now rather than be disappointed later. Personal finance is what I know and what I’m passionate about, so I might pass that knowledge on.
The article continues that spending and saving are the two most important things to teach. I agree, especially for young kids. Older kids have more opportunities to focus on earning more and investing. However, schoolwork comes first, so making more has to be about “working smarter” rather than “working longer/harder.” At least investing can be very quick. An automatic investing plan can be set up in just a few minutes.
The next tip was to have younger kids use cash and let older kids use an ATM account attached to a bank – avoid credit cards. This tip is reasonable. Although, my kids have been authorized users on my Amazon card for a few years. They have yet to learn about it and wouldn’t know where or how to use it, but it will help them earn credit whenever needed.
The final tip was that young kids don’t need to know about family income. That’s obvious. Young children are still learning place value, and numbers like hundreds of thousands don’t make much sense.
Part 2: Kiplinger’s Tips for Raising Money Smart Kids
As a follow-up to that article, Bodnar shared some reader tips on raising money smart kids.
One reader shared a “parent matching” strategy. That’s where a parent will reward a child for saving with more money, similar to how a 401k match works at many companies. Another reader made it simple, “Live below your means.” Finally, one reader stressed the value of saving over earning because you pay taxes on money earned.
Some readers disagreed with the above tip about not giving kids credit cards. Like me, one reader wanted their children to establish excellent credit at a young age. Another reader required kids to pay it off in full every month. I love that last tip, as it builds a habit and establishes the importance of it before the kids are on their own in college.
Finally, Bodnar recommended two books for helping high school students with investing, The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed Of and How to Turn $100 into $1,000,000: Earn! Save! Invest!. For younger kids, I have my own opinion on the best book to teach kids about money.
Aside from books, I would add a podcast for teens, NPR’s Planet Money’s Summer School on investing.
I found all these reader tips (along with Bodnar’s book recommendation) better than the original article. Over both articles, there are plenty of good tips – definitely worth a few minutes of your time.
Origanlly published 1/24/2022
10 thoughts on “Kiplinger’s Tips for Raising Money-Smart Kids”
It is so important to teach your kid the value of money at such a young age! Great article that we will be using for our little one!
I will keep these tips in mind. I always want my kids to be smart with their money! So many people aren’t these days.
Teaching little kids the value of money and the importance of saving is so important. It can be difficult though!
Books and podcasts are great ways to teach your kids to grow up to be money-smart. Thank you for these great resources.
Excellent article! I know one of my sons helped my grandson open up his own junior bank account to help him get a grasp on both physical and digital funds as he also has a piggy bank he likes to keep his allowances, change, or birthday/holiday money in!
I always taught my kids how to be money smart when it comes to their finances. I’m proud of them because my two adult kids have done well and are financially independent. I am also teaching my youngest that we have to pay bills before we buy things we want.
These are excellent tips, I’ll definitely remember these if I need them sooner or later. Thanks for sharing!
This post is really informative, thanks for sharing these tips.
It is good to be able to teach financial skills starting at a young age. These are all such important points.
I think I need to start teaching my kid financial tips. It’s important to understand the basis from a younger age.