My F&M

Money Talk for Kids

At Foster & Motley, we think the most important factor in teaching your kids about money is that you start. It doesn’t have to be perfect, planned, or exhaustive – just get the ball rolling! If you want some help, below are some ideas of where to start the conversation. Of course, we are always here to sit down with you and your kids to help facilitate the discussions! 

Age 4 - 7: The concept of saving

  • Take them to the bank and help them make a deposit with birthday money or Christmas gifts. 
  • Start giving them an allowance to buy small items such as snacks, candy or toys. According to our co-founder, Dave Foster, $1/week for each year they are old is a great place to start.

Age 8 - 10: The concept of spending

  • They are likely looking to make bigger purchases at this point in their life, perhaps a bike, video game, or present for a family member.  Help them save towards a spending goal
  • Spending is part of life, and it’s ok to enjoy the money you have saved in moderation.

Age 11 - 13: The concept of earning

  • In addition to a weekly allowance, consider giving them the opportunity to earn money. Tie household chores or other tasks to income. If they want to make a big purchase, help them find work in order to reach that goal.
  • Encourage them to be entrepreneurs and start a small business – cut grass for neighbors, sell lemonade (or something else, profits on lemonade are rather limited), work on a project they are interested in.

Age 14 - 17: The concept of investing

  • At this point, your child has probably saved some money.  Help them open a brokerage account and use it as an opportunity to teach them about stocks, bonds, and mutual funds. Let them watch their money work for them.
  • Foster & Motley can help facilitate this! You aren’t alone!
  • Help them understand that their wealth can work for them, but only because they have saved.
  • Compound interest is a powerful concept, the earlier you start, the better off you are – see the below example of John, Elizabeth, and Patrick based on when they started saving and how their money grew! Boiled down, the earlier you start saving the better of you are and now is better than later!

For illustrative purposes only. Rate of return is no guarantee of future results.
Investing involves risk, including the possible loss of principal

Age 18 - 21: The concept of debt

  • Debt is an unavoidable part of life, and many college students (and adults too, frankly), don’t understand how to manage debt
  • Help them open their first credit card
  • Encourage them to track spending and pay it off every month themselves
  • Help them understand interest rates and that some debt can be helpful in making an investment in their future (college loans, mortgages, etc.)

We know these aren’t always easy conversations.  We are here and glad to help if needed. We’d love to hear from you about your experience learning about money or teaching your kids! Share below or reach out if we can help you with these financial conversations.