What We’re Doing to Prepare Our Kids for Financial Independence

How often do your children hear you talk about money? Better yet, how often do they hear you talk about financial independence?

As many readers know, I graduated college with over $50,000 in debt from a  combination of credit card and student loan debt. Once I finally became debt free and my wife and I started a family, we resolved to do all we could to make sure our children would have a solid financial foundation to make wise decisions and, hopefully, pursue financial independence when appropriate.

This isn’t cruel. In fact, it’s one of the most loving things you can do for a child and can be done rather simply when done wisely. This goes beyond teaching your children about money, as it’s more about how to use money as a tool to gain financial independence.

Transparency is Foundational


The first step we take to make money real to our children is to discuss it openly and honestly. Money is a taboo topic in our culture, but it doesn’t have to be in your home.

By discussing money openly with your spouse, your child(ren) get to see it’s not something to be afraid of, but something to discuss honestly. This lets them see firsthand how to think through money matters – and how money can be used to reach important goals.

I get asked regularly when this should start. It depends on your particular situation and child. We began to openly discuss simple money basics with each of our children around the age of three and it seemed to work well.

As your children get older, include them in your respective financial chores. This helps them learn anything from paying bills to the beginnings of investing. Of course, this requires you and your spouse to be financially naked with each other as it’ll otherwise be near impossible.

Our oldest is ten, so we’ve begun to include her more in discussions. This breeds questions and has encouraged her to think of ways she can make money, which is music to our ears.

How Much Allowance We Pay our Children


Paying your children to do chores is a fairly controversial topic. The fear is that you set them up to expect to get paid for just being a member of the family or for doing things they should already be doing.

We’ve erred on the side of paying our children to do chores, with a twist. The way I see it, they can’t begin to think through the implications of what money can do without managing it themselves.

That being said, we started paying our children for chores around the age of five. They knew how to count money so it was a natural progression. Again, each situation is different, but starting around four or five is good.

We don’t pay our children for things we already expect them to do, like:

  • Helping clear the table after meals
  • Picking up their toys
  • Making their beds
  • Putting their shoes away

We don’t get paid for simply being productive members of society, so it doesn’t make sense to pay them for these tasks. Below are tasks our children do get paid for:

Youngest son (6-year-old son):

  • Unloading the dishwasher twice a week
  • Making sure all the books are picked up in our family room each day
  • Watering our flowers/plants once a week
  • Putting away laundry
  • Cleaning the front storm door once a week
  • Filling our bird feeder once a week

Middle child (8-year-old son):

  • Unloading the dishwasher twice a week
  • Cleaning the main floor bathroom twice a week
  • Dusting dining room table and woodwork once a week
  • Putting away laundry
  • Cleaning the front storm door once a week
  • Emptying trashcans around the house once a week

Oldest child (10-year-old-daughter)

  • Unloading the dishwasher twice a week
  • Dry mopping the kitchen floor twice a week
  • Putting away laundry
  • Cleaning the front storm door once a week
  • Vacuuming the main floor once a week
  • Watering our flowers/plants once a week
  • Cleaning the kids’ bathroom once a week

These chores get adjusted relative to the season of the year and what we believe they can handle. For doing these chores, they can make $5 per week.

To be clear, if they don’t do a certain chore or they fail to do one of the expected tasks, they lose money. For example, they lose a quarter each time they don’t do an expected task.

This isn’t meant as punitive, per se, but to help them learn that you don’t get paid for showing up. We want them to learn to be productive members of society. As they get older, we plan on adding in stretch tasks that will allow them to earn extra money.

They get paid each week, and that’s where the magic of learning about money begins. Whatever each child gets paid for the week, they must divide the funds in three ways:

  • Save = 50%
  • Donate = 25%
  • Spend = 25%

I didn’t come up with this formula; I read about it elsewhere. They each have this piggy bank from Amazon that helps them segment their money. At the end of each month, they deposit their savings into their respective savings accounts and give their donate money to either our local church or charity.

They can use their spending money on something they want to buy and are currently saving up for various Lego sets.

We love this approach as it helps them learn the basics of budgeting and how to use money as a tool to get what they want in life. Saving money and giving back, of course, are also great benefits of this approach.

I should also add that each child will begin their own small brokerage account at the age of ten so they can begin to learn how to start investing, providing a tangible lesson in money management.

Aren’t Children Too Young to Deal with Money?


A common objection to children and money is that children are too young to concern themselves with money. Yes, a 12-month old has no concept of money, but children are far more capable than we think.

Young children are incredibly concrete thinkers. Our six-year-old has little clue what financial independence is. He’s concerned about two things: playing with his Legos and riding his bike. However, he knows it takes planning and money to make those joys in life possible.

That knowledge is what gives birth to managing money that will serve them for life. When paired with our transparency about how we manage money, it helps them grasp even more how money works and how they can use it to pursue financial independence.

It’s a growing and learning process, but it’s one that is grounded in love and hope for their future.

Kids don’t think about financial independence, but we think it’s important to show them the benefits. Here’s how to wisely teach your kids about money.

Confidence is the Goal


Confidence with money is the ultimate goal in walking our children through managing money. Whether it’s learning how to talk, reading, riding a bike or money, it takes some work to even start.

They deal with fear, but quickly move to a place of confidence. That confidence helps them tackle the next steps so they can accomplish greater things.

That’s our goal with preparing them to pursue financial independence. It’s a task of helping them see the importance of not giving into a consumerist mindset, but following different personal finance rules to help them rock their money.

It’s also our goal to help them confidently use money as a tool to get to what they want in life. Looking back to my childhood, my parents argued about money and regularly lived paycheck-to-paycheck.

By being real about money and showing them the possibilities, that’s a cycle we plan to break so they can live a life without financial compromise.


When do you think it’s appropriate to begin teaching children about money? Do you think it’s right to pay children for doing chores around the house? What are some things you think are important to teach children about money?

The post What We’re Doing to Prepare Our Kids for Financial Independence appeared first on Frugal Rules.

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