Doesn’t the early bird catch the worm? So, starting early, as early as Kindergarten, helps in shaping good
financial habits in the long run. When they start identifying pennies, nickels, and dimes in school, it’s a good
time to help them learn their penny’s worth. This week, we will discuss how to teach our children good financial
habits. Only a few schools teach children a little about money or finance in their lessons, although if you want
your children to pick up good financial habits, you should give them some specific training yourself.

Here are some considerations:

• Set a good example.

Children follow their parents; lead and will emulate what they see, so keep your own financial affairs in
order.

• Don’t give an allowance.

Make children earn money to spend. Allowances encourage expectations of getting something for
nothing. Paying for performance says no work or no chores completed means no money given or
earned. This way, the child can only blame themselves for not being paid. (Work means money; extra
pay is ok for extra work.)

• Encourage savings.

Children need to learn early that waiting for something pays. The longer they wait, the more money
they will have. Teach them the secret of compounding. (Piggy banks are ok – for young children, try
clear ones so they can watch their money grow, and try savings accounts for older children)

• Teach money management.

Show how to compare interest rates and teach them that money doesn’t take care of itself.

• Explain why some money should be saved, some spent, and some given away to charity.

Teaching children how to save, spend, and donate teaches children to become better citizens, better
taxpayers, and better contributors to society (1/3 saved, 1/3 spent, 1/3 donated is one option)

• Go to www.mymoney.gov to learn ways to teach money to kids, teens, and adults.

This website, run by the federal government’s Financial Literacy and Education Commission, shows
you how to teach money use and management to children, teens, and grown-ups, including teachers
and parents. Uses games and videos to both educate and entertain.

Teaching Self-Reliance and Financial Confidence

Helping your children financially by teaching self-reliance is one of the greatest gifts you can offer your
children. Through teachings and setting a good example, you can help your children become financially
responsible and independent adults. However, there is a fine line between helping your kids get started and
enabling them to stay dependent. If your children live at home, expect them to contribute to the household.

Even full-time students can share household chores and hold down part-time jobs to help pay for room and
board. If practical, hire your children through your business and expect them to earn those wages.
Before helping your child buy a car, determine whether the purchase is necessary. Are work and/or school
within walking distance, is public transportation available, and is using a bicycle feasible? If none of these
alternatives are viable, enlist your child’s aide in finding and buying an affordable but reliable car. The child
should pay at least part of the purchase price and be responsible for insurance and operating costs. Or
consider replacing your own vehicle and selling your old car to your child at its trade-in value.

• Helping your children be self-reliant is a better choice than purchasing something for them

Never give an allowance; instead, require certain chores to be performed and pay them for completing.
That way, children learn that nothing is free. They also learn that if they do not work, they do not get
paid.

• Before purchasing a car for your child, consider replacing your own vehicle

Sell your used vehicle to your child at trade-in value. You can find the trade-in value online with Kelly
Blue Book (https://www.kbb.com). This helps the child learn that nothing is free. Another technique is to
match what the child saves to purchase a car. Again, this teaches the child to work, get paid, and save
for the future. Giving a car to a child is not helping them; it’s teaching them that someone other than
themselves will provide for them.

• Determine whether the purchase is necessary

School/work nearby, public transportation. Children will always want more, no matter how much they
have. Teaching them the difference between wants and needs is one of the best lessons parents can
pass on to children. You know what a need is rather than a want; teach this to your children.

• Make sure the child is paying part of the purchase price and all operating expenses

Before they get the car or other want, make sure they can afford to keep up the item on a regular basis
(gas, oil, tags, insurance, repairs), otherwise you will find yourself paying for the expenses of your kids,
rather than teaching them to pay for themselves. 

Trump Savings Accounts:

Beginning January 1, 2025, through December 31, 2028, any child born during this period can have a
free $1,000 seed money Trump Savings Account established in their name. Parents and grandparents
may donate up to a total of $5,000 annual contribution for these children. Go to TrumpAccounts.gov to
establish or create an account. 

Money contributed to these accounts may not be withdrawn until the child reaches 18 years of age.
Earnings during this period are tax-free. This is designed to create long-term wealth by retirement age.
The money can be used for any purpose once withdrawn.

Any child under 18 may also have a Trump Savings Account created on their behalf. If you were not
born during 2025 and 2028, but under age 18, a Trump Savings Account may still be established on
your behalf; but no $1,000 seed money is provided by the US Government. All the other rules
mentioned above still apply.

Call today, don’t delay! See how this affects you. We can be reached at 602-264-9331 and on all social media under azmoneyguy.

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