Raising Money-Savvy Kids to Be Financially Independent during Teach Children to Save Day

Citi Financial’s Strategies to Financially Educate Children

Jonathan Clements, Director of Financial Education for Citi Personal Wealth Management

Teaching children to save isn’t easy.  Yet, if they don’t learn the importance of saving, children can grow up to be irresponsible spenders, get themselves into debt and look to their parents to help rescue them.  At that point, their problems will become yours and everybody’s finances will be at risk.  According to a recent study, the lack of financial knowledge among college undergrads is rising, and the average undergrad will graduate with $4,100 in card debt.

Mr. Clements offers five strategies to financially educate children:

1. Create a wish list.  Get your children to write down the things they want.  Every so often, go over the list with your kids and see which items they want to add and remove.         
2. Play the soda game.  When you go to restaurants, offer your kids a choice:  They can have a soda or they can have a dollar.  Suddenly, their choice has financial consequences—and you may be surprised by how much water they end up drinking.
3. Give your kids more pocket money, but less frequently.  The larger amount will seem more precious, and it will make them think harder about their purchases.
4. Set up a bank account for your children, and then deposit their pocket money into the account.  Your children are more likely to feel like they’re spending their own money.
5. Talk about your own financial struggles.  You may want to prepare your kids for those struggles by talking about your own struggles when you were new to the working world. 

Jonathan Clements is director of financial education for Citi Personal Wealth Management.  Before joining Citi, Mr. Clements spent 18 years at The Wall Street Journal, as the newspaper’s award-winning personal-finance columnist and has since appeared on networks, such as CNN, MSNBC and ABC’s Good Morning America.  He will be discussing strategies for raising money-savvy kids to be financially independent and responsible in conjunction with Teach Children to Save Day.