Raising financially independent kids: Be financially independent from them

Parents need all the help they can get these days to raise children that are financially responsible and good stewards of their money. But there’s an even more important (and selfish) reason to teach them these lessons — your financial independence from them!

As they become adults and take on the responsibility of their own living expenses, you want them to have the financial skills and knowledge they need to survive and thrive without relying on you and your bank account.

Consider that more than one-third of millennials — defined by the Census Bureau as those between 18 and 34 years old — are living with their parents, and according to its 2017 study, 9 out of 10 had been living with their parents for more than one year. That’s a lot of food, water, health care and other expenses that parents are continuing to shoulder for their adult children.

Fortunately, there are many great resources for parents to use to teach and reinforce good money habits from an early age. Don’t despair if you have older kids and haven’t done much to reinforce sound fiscal principles. Today, you will find online sites, apps and books that can transform even the young and fiscally clueless into savvy savers and investors.

The key to your child’s financial independence — is you

Yes, I know you have heard this too many times to count, but there is just no substitute for your good example. This point was driven home for me when I heard my then 3-year-old daughter use a curse word as she was sitting in her booster seat in the car while I was driving. My driving-induced use of curse words was getting out of hand, and I had to rein it in. So, as you set the expectations and example for spending, earning, saving and giving with your children, keep those boundaries firm.

A friend of mine gave me an excellent piece of advice. She said that if you don’t want your child to have ice cream, or candy or whatever your child is begging for when you’re in the grocery store, stay strong and stand firm. Then you won’t have to say no to them 10 more times at home when they want to eat it for breakfast or lunch or instead of dinner. You can apply this simple ‘nip it in the bud’ approach at any age.

Sage advice like this is prolific and easily accessible if you know where to look. To get you started, here are some of my favorite teaching tools for kids of all ages:

Websites with financial wisdom:

Money As You Grow:

This site gives parents practical and useful tips to teach good money habits to kids from age 3 to young adulthood. One of the things I like best is a section on How Kids Develop Money Skills, which looks at the skills that children develop at different stages of their lives and what to expect them to understand at each stage.

For instance, when teens gets their first job, they suggest that you sit down with them and teach them what’s on their paystub. Walk them through their paycheck, item by item to help them understand what is being deducted and where the money goes. Explain the difference between gross and net pay, what a W-4 form is and why they need to fill it out. Take this a step further and teach them the basics of taxes. This IRS 1040 Tax Table publication demystifies what taxes are owed at different income levels for 2016.

Allowance Academy:

This site helps parents teach their kids to be financially literate. I like how these parents of three children help other parents by giving straightforward, practical tips and advice. I also like the resources they feature for even more good tips on raising financially responsible kids.

Sense and Dollars:

Maryland Public Television compiled a list of websites and resources for parents and kids of all ages. While some of the links go to financial institution sites, it’s still a great place for valuable resources. For instance, it links to Jump$tart’s Reality Check — an online quiz that high school or college graduates can take to see whether they can afford the lifestyle they envision as they embark on life as an independent adult.

Engaging apps for the kid in all of us:


Designed like a virtual piggy bank, PiggyBot is a free app for kids ages 6 to 8. When they create their virtual account, they will create a pin number, just like a real bank account. While it’s not actually linked to a bank account, they will have a virtual balance with you and you control how to allocate their allowance between Spend-It, Save-It and Share-It accounts. Kids can set goals for the things they want, such as a new bike or game, and learn to save for bigger, long-term goals.


FamZoo is an app that promotes good money habits in preschool to college-aged kids. It tracks allowance, earned income through chores and jobs and helps to keep kids on a budget. It also teaches one of the most powerful lessons that anyone can learn — the power of compounding interest on savings, as well as more advanced, real-world money lessons, such as contribution matching, expense sharing and loans and interest. You can decide whether to pay your kids their allowance in prepaid cards or IOUs. The app is $5.99 per month which seems like a small investment for big results. Their website is also full of tips and advice.

Savings Spree:

This winner of the Parents Gold Choice Award is a fun app with serious financial lessons for kids ages 7 and up. Based on a game show with a Money Savvy Pig as the host, Savings Spree teaches kids how the choices they make every day can add up to big savings or big expenses. It also introduces the concept of having a “rainy-day fund” to pay for expenses that are beyond their control. These are big lessons that will stay with your child as they start their first career and have to make decisions, such as having an emergency fund with several months of their salary on hand in case they should lose some or all of their income.


Mint is not only useful for young adults in college or just starting out, but many parents like to use Mint to help manage their finances, too. By linking your bank and credit card accounts to Mint, you can see all of your financial information in one place. Mint helps to create budgets, lets you see where your money is going, tracks and pays bills and suggests new ways to save more.

Financial books we love:

“You’re So Money: Live Rich Even When You’re Not” by Farnoosh Torabi

I have recommended this book hundreds of times for millennials, and it’s a book that I have given to many of my daughter’s millennial friends. This age group will identify with Farnoosh’s money advice delivered in a fresh and funny way. It’s great for those who are starting their first career and having to balance their living expenses with the lifestyle they want on their starter salary.

“Alexander, Who Used To Be Rich Last Sunday” by Judith Viorst

Best known as the author of “Alexander and the Terrible, Horrible, No Good, Very Bad Day,” Viorst tackles the challenge that kids and adults face when it comes to money — it seems to disappear too easily. Kids read and count along as Alexander spends the dollar that he was given by his grandparents — cent by cent.

“Growing Money: A Complete Investing Guide for Kids” by Gail Karlitz

What I love about this book is that it goes beyond the concepts of savings and introduces investing to kids in a very easy-to-understand and engaging way. While it’s written for 8- to 12-year-olds, I think its required reading for anyone who wants a primer on investing in the stock, bond and mutual fund markets. It teaches about the power of compound interest and how to read the financial section of a newspaper, too. It demystifies investing and shows your child the power of building wealth over time through investing.

The more that you know about your finances, investing and building wealth, the more effective your message will be to your children. To learn what you know and don’t know about your finances, and where you may need to take action, take our Financial Fitness Checkup Quiz.

Declare your financial independence from your children by talking about money and choices in a positive way with them. Give them the tools and encourage them to practice these skills as part of their everyday routine and don’t be surprised when they tell you that they are finally moving out of the basement.

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