Talking to your middle school child about money

Teaching children about the mechanics and responsibility of saving, investing, budgeting, earning and spending is important. These fundamental pillars can help safely guide your child throughout life as they navigate learning the value and meaning of money. Sure, there can be some choppy waves and uncharted territory – subjects such as first part-time jobs, inheritances, philanthropy and employment come with a lot of emotions – so deciding ahead of time how you will approach these life moments can be useful.

By the time your child is in middle school, they are pushing their boundaries toward independence. They are also at the height of their curiosity and openness to adult input, so you can expand the conversation to include further ideas surrounding saving and earning. Here are five areas where your middle school student might need your help.

Understanding good spending habits

There’s a saying: little kids, little problems. Big kids, big problems. While that’s an exaggeration (big kids are often lovely), the premise holds true – as your child ages, the rules change. When it comes to allowance, simply handing over a crisp $5 bill on an arranged day every week may need an upgrade.

Introducing an allowance contract is one strategy. An allowance contract is a “time-tested strategy to teach kids the privileges and responsibilities of having money" and includes sitting down with your child and making a list of nonessential items that were once covered by the parent such as Roblox money, gifts for friends’ birthday parties and even crafting materials. After outlining the expenses, the child can write a contract in their own words, with the hope that both of you agree on essential and non-essential items. You might feel that clothing, sports gear and school supplies are your duty to pay for, whereas downloading a video game is not.

Learning the importance of saving money

Your child is at a great age to grasp the concept of “Pay Yourself First,” a tried-and-true golden rule of many financial planners. The best part is that it’s simple: start with as much money as you want (even $5), with the concept you commit to setting aside an amount for savings before the money goes to anything else. If your child is old enough to have a job, you could introduce the concept of automatic deduction rollovers into a savings account. Deciding what amount to sock away could create a fun and lively debate about personal finance.

Adopting an investing mindset

Some middle schools have investment clubs. Lessons on compound interest, learning how to analyze publicly traded companies, and even competing by writing reports on stock options are examples of skills learned. You may want to discuss joining a club with your child if one is available, or asking their teacher if one can be formed.

Budgeting finances for now and the future

The “I want a phone, everyone else has one” chant begins during these years and a budget can be used as one tool to help a child understand how something they desire can one day be in their possession. If your child is a visual learner, a “goals, wants, needs” discussion with actual jars or envelopes they divide cash into can help. If your child has a phone, there are apps that allow you to put money into their account based on chores they perform.

Earning income through a job or other occupation

Having a job, even part-time, is an entry into the world of personal finance and builds life skills. Simple tasks such as watering a neighbor’s plants or babysitting can develop relationships with the community.

The most successful people in the world often speak about their first paper route, and professional golf athletes have fond memories of caddying as children. Making connections matters both in business and in life; a part-time job could open doors to your child’s future. Creating a resume with your child is a great first step. There are skills other than previous job history to think about including such as being bilingual or CPR trained. A lemonade stand shows entrepreneurial skills, and if that money is later donated to a charity, it demonstrates caring about something bigger than one’s self.

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