Parents always desire the best for their children. David Walter Osborne believes that it can be challenging to teach children good money habits if they see their parents always buying them the latest tech gadgets, the most expensive sneakers, or every new toy that their hearts desire. Alternately, parents can demonstrate excellent money management skills by carefully choosing when to spend and when not to spend.

Since discussing the traps of consumerism, the ease of slipping into bad credit, or simply spending outside the family’s budget may not connect with most children. Good money habits can be taught by what parents do and not what they say. As a financial advisor and wealth manager for athletes, David Walter Osborne has observed first-hand the consequences when clients fail to plan for their financial future.

This is the goal of teaching children good money habits versus impulse spending – to have the future they desire.

David Walter Osborne and Money Habit Tips for Children

Kindergarten and Elementary School

As soon as your children are old enough to count, that’s a good time to introduce saving coins and dollar bills. Give your child a clear jar to save their money instead of a piggy bank. This will motivate them to keep more as they watch their savings grow. Instead of teaching them to save money for spending, David Walter Osborne believes this is the best age to introduce charity and giving.

According to Bank of America, a good rule of thumb is to give young children 50 cents to $1 per week for every year of their age.

At this age, it is a good idea to teach young children that things cost money – and money is earned and saved. When it comes to teaching good habits at this age, you can insist that the child continue to save their money to purchase a particular desired item. Or, you can allow the child to use their savings on outings to buy snacks and small toys.

Middle School and Pre-teens

David Walter Osborne suggests that pre-teens be given action-based allowances. Good grades and completed house chores are good examples. There are pros and cons to every method of allowance-giving. Some believe that children should not be paid for expected contributions to the household. Giving or refusing to provide a weekly allowance to pre-teens to reinforce positive behaviors is a decision parents must make.

But certainly, this is the perfect age to reduce your child’s impulse buying and emphasize saving their money for life-enriching purchases. David Walter Osborne believes that a conversation about good money habits is essential for pre-teens.

To teach children at this age how to budget, David Walter Osborne suggests three different piggy banks. One for spending, one for saving, and one for giving.

High School Young Adults

Young adults that live at home, whether they are in high school or not, should have the responsibility of a bank account. At this age, David Walter Osborne feels that money takes on more importance. And not just for weekend adventures or dating. College or living on one’s own is just around the corner. And needed purchases will cost a lot more. These include a first car, clothing, spring break, smartphones, and laptops.

Along with the high school student earning money in the neighborhood or with a part-time job, allowances should be given on the same day of each week. Allowances at this age could have stipulations. That is, they may be chore-based, grade-based, behavior-based, or all three.

David Walter Osborne knows the pitfalls of wealth management. For young people, the danger is in misinformation or lack of information regarding financial well-being. For young people, the peril of high credit card usage and the benefit of steady savings cannot be overstressed. When teenagers learn the pitfalls of consumerism early, they are less likely to fall victim. And while consumerism is good for the economy, it’s not so good for the individual when the only goal for your money is to buy more and more stuff.

The best lessons for young people who will soon be making their own money are teaching them to consider and save for things that hold value or are essential. A down payment for a starter home, a future vacation, a dependable car, holiday gifts, an emergency fund, and retirement are all great reasons for young people to be serious about saving money as they transition into adulthood.

And finally, setting good examples on wealth management which includes both spend and saving money, must come from the parents. When the household stays within the budget while also allocating money for entertainment and other fun purchases, the children in the home will notice.