Give Your Children the Gift of Financial Literacy

December 11, 2009 by Lisa Caputo and Linda Descano 

The holidays can be an opportune time to instill financial values in children and grandchildren. Wish lists and gift shopping can help them distinguish between needs and wants. Donations and volunteering introduces them to the concept of giving. Mothers are often leading the charge when it comes to promoting financial education in the family. In fact, a Women & Co. study conducted in 2008 found that 92 percent of women consider themselves a positive financial role model to their children.

Lisa Caputo, Founder, Chairman and CEO of Women & Co., and Linda Descano, CFA®, President and COO of Women & Co., offer the following tips to help women teach their children about financial responsibility, sharing, and the connection between money and values:

1.    Be a positive role model. Children absorb values by observing adult behavior. Set an example, and model a healthy attitude toward work, earning, spending and giving. Keep the role of money in perspective in the family and don’t use it as a means of comparing yourself to others.

2.    Understand their environment.
Try to unearth the experiences your children are having with money among their own peer group. Values, attitudes and beliefs are continuously evolving, so it’s important to help your child interpret what he or she may be hearing, seeing and feeling.

3.    Establish good behavior. As soon as your children are ready, set up an age-appropriate allowance for children and a schedule for dispensing it between savings, spending and giving. For teens and college students, consider giving them an allowance to last over several months and let them have a chance to allocate it over time.

4.    Talk about money. Talk openly about money in the family. Do not treat the topic of money as taboo. A candid, honest and ongoing dialogue about money in the household can help children develop healthy attitudes and learn valuable lessons.

5.    Make it fun. Talking about money doesn’t have to feel formal or dull. Window shopping and trips to the library can teach important lessons about needs vs. wants and borrowing. Many classic board games like Monopoly, Life and Payday are springboards for basic lessons in finance.

6.    Do it together. Create a “family fund.” Saving toward a common goal, such as a vacation or donation to a charity, offers children the opportunity to get involved with conducting research, creating the budget, and more. Grandparents and relatives can be invited to join the fund too.

7.    Give back to the community. Help your children determine how they would like to contribute their time by showing them their options. Perhaps someone in your family is musically talented and can arrange a performance for people at a local hospital. Or utilize the skills of the entire family by serving at a soup kitchen or helping to build a home for a family in need.

8.    Be fair. While you may not be able to be completely consistent between children because of differences in ages, do make every effort to avoid comparing siblings or creating monetary competition in the household.

9.    Accept mistakes and celebrate success. Protecting children completely can lead to financial problems when they are adults, so allow them to make mistakes. But do set limits and make rules. Equally important is to celebrate their successes.

10.    Be patient. The results of your efforts may not be apparent until much later on in your children’s lives. Trust that you’re doing the best you can and take the setbacks in stride.

About Women & Co.
Women & Co. is a financial resource program from Citi, dedicated to helping women achieve their financial goals. Women & Co. provides members with education on a vast array of financial and investing topics, which members access through By accessing the site, members can read newsletters, listen to audio conferences, and find out about Master Class seminars in major metropolitan areas. For more information, visit

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2 Responses to “Give Your Children the Gift of Financial Literacy”

  1. Jill on December 12th, 2009 11:40 am

    You are so right! So many of the children today do not know how to count change back to a person. They also, have a hard time doing math without a calculator. I really like your page and am going to get my children some learning games for Christmas.

  2. barbara stanny on December 12th, 2009 1:46 pm

    Love this article…just forwarded it to all the moms I know, put it on facebook, and even tweeted it, Great advice. Keep up the good work.

    Barbara Stanny, author: “Prince Charming Isn’t Coming: How Women Get Smart About Money”

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