Child-Centered Financial Decision Making and Responsibility 

By Tracey Matthews, Knox County Schools Supervisor of Family and Community Engagement

Contributing Writer: Kiera S. Alston, Knox County Schools Family and Community Engagement, University of Tennessee Student Intern

Selecting which ice cream to order from the ice cream truck was one of the hardest decisions during my generation, but the range of decision-making opportunities for today’s youth has greatly expanded. Learning to effectively make decisions teaches young people responsibility, problem solving and independence/self-sufficiency and increases self-confidence and efficacy. It also helps them move beyond narrow thinking and forces them to consider the consequences or impact of their actions, all traits that they will need in life.

Managing money and spending wisely are two important life lessons, and teaching children to make sound financial decisions helps them in adulthood. Here are a few examples of prime opportunities to help your child make decisions about spending in today’s economy:

• Uncover the real personal value of the item: The next time your child asks, “Mom, can I have a ________,” ask if he/she wants to spend his/her money on the item. Insisting that children use their own resources to supply some of their many wants (and a few needs) provides countless decision-making opportunities and develops their appreciation and understanding of the value of money, particularly if it is their money!
• Review your financial responsibilities as a parent/adult: If your child asks you why you can’t buy an item, take this opportunity to discuss the bills you have to pay. This review will provide them a peek at their own future responsibilities and how they, too, will have to make such choices one day.
• List their available financial resources: Children often receive an allowance, financial gifts for birthdays and special holidays or income from employment. Whatever the source, it’s usually all disposable income to them. This leads to the next great opportunity for decision-making and responsibility.
• Explore opportunities to earn money: If your child does not earn an allowance, ask him/her, “What can you do to earn money?” Then, help him/her discover available time, talents and skills and how those attributes can collectively help him/her earn desired income. Ideas may be as simple as walking the neighbors’ trash to the end of the driveway each week or taking over a few of the household chores (i.e., making beds, cleaning bathrooms or vacuuming).
• Talk about the benefits of opening a savings and/or checking account: Once the income starts flowing, a savings or checking account provides a way for children to keep track of their spending and make better decisions about what’s important.
• Identify long- and short-term desires/goals: If your high school child is required to earn and spend his/her own income for friend or family outings (i.e., restaurant meals, movie tickets, football games, etc.), he/she will begin to realize that purchasing other items interferes with his/her long- and short-term desires. When this realization occurs, making smarter decisions regarding purchases will begin to come naturally.
• Differentiate between “needs” and “wants”: Help your child understand the difference between “needs” (i.e., senior fees, band uniforms, college extras, etc.) versus “wants” (i.e., concert tickets, the hottest sneakers, the latest cell phone, etc.). Take into account the age of your child, for younger ones define and will understand the concept of needs and wants differently than will older children.
• Share your budget with your children, then help them as they create their own.
• Think out loud when you make decisions about spending: Let your children hear the process, so they can understand both the benefits of maintaining a budget and the consequences of deviating from one.

The New Year is here, and what a perfect time to start new behaviors and form a few financial resolutions! Gently guide your children as they assume responsibility regarding financial decision making this year. One of the greatest gifts we can leave our children is a legacy of good decision making.

On behalf of the Knox County Schools Family and Community Engagement Department, Happy New Year to you and your loved ones!

Tracey Matthews currently serves as Knox County Schools’ District-wide Family and Community Engagement Supervisor. In this position, Tracey has been entrusted with the responsibility to facilitate the district’s course toward building stronger and lasting partnerships between families, schools, and the community. For more information, please visit the Family and Community Engagement at knoxschools.org.