Back-to-school season is the perfect time to teach kids the money skills they’ll need for life.
For your consideration on any back-to-school stories or segments, Charles P Hoff A.F.C., Financial Literacy Educator at DFCU Financial, is available to discuss the one habit that builds financial independence in teens: allowance
“Currently, there is an economic environment that's less forgiving to those who have taken a false step financially speaking,” says Hoff. “Fewer young people have been taught the need for razor-focused attention to a personal financial plan.”
I had a chance to learn more in this interview with Charles Hoff,DFCU Financial’s Member Financial Education Counselor.
Why are financial issues currently facing young adults different from any other generation?
Generations past had fewer avenues for spending and shopping was limited to in-store or catalog purchases. Today, with online shopping, targeted advertising, and easy access to credit, young adults face far more temptation to spend.
On top of that, financial literacy took a step back with the baby boomer generation. Many of the traditional lessons -avoiding debt, saving consistently weren’t passed down as strongly as before. Without those guardrails, today’s young adults are navigating an environment filled with spending pressure. What older generations might have called wants are often seen as needs today.
And, unlike many before them, most are also starting adulthood with significant student loan debt, which makes building a strong financial foundation even harder.
Why is it important to start teaching kids about money from an early age?
Starting early gives kids the chance to build healthy habits before they face big financial decisions. If they don’t learn while they’re young, they may end up relying on parents for help well into adulthood. Giving them the tools early sets them up for independence later.
How can families use allowance to teach kids about money?
Allowance can be more than just pocket money it can be a great way to help kids practice budgeting. Instead of covering every expense for them, parents can guide kids to use their allowance for some wants and even small needs.
As they grow, the allowance can increase to help teach bigger lessons. For example, encourage them to save part of it toward a long-term goal, like their first car. By connecting allowance to future plans, kids learn patience, saving, and the satisfaction of reaching a goal.
Why is it important to let kids make financial mistakes and experience consequences before they’re grown?
It’s better for kids to make small mistakes while they’re young and the stakes are low. What feels like a big problem to them now is often a safe, teachable moment for parents.
If they never get that experience, they may come to expect financial rescue later in life when the consequences are much more serious. Allowing them to stumble a little now builds resilience and better decision-making for the future.
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