4 tips to be a money mentor for your kids

From 529s to money conversations, here's what parents should keep in mind.

  • Facebook.
  • Twitter.
  • LinkedIn.
  • Print

Key takeaways

  • Lead by example. Make sure you're being a good money role model.
  • Have open conversations about money. Talking about finances can help demystify money for your kids and promote healthy financial habits.
  • Save for their future. Higher education, like college, can be incredibly expensive. It's never too early or too late to start saving.
  • Don't neglect your future. Remember that saving for your retirement is for you and for your childern.

It can be hard to teach your kids about finances when you feel like you don't have it completely figured out yourself. Don't worry, though—you don't have to have all the answers. Rather, focus on being a money mentor. Practice good financial habits and provide a lasting example of saving, budgeting, and open financial communication.

We know there is a lot to juggle when it comes to parenting and finances. As a start, we came up with 4 quick tips that we think every parent should know.

1. Lead by example

Kids are always watching and learning from you, so make sure you're being a good money role model in the day-to-day experiences—like by minding your spending, following a budget, prioritizing saving, and being cautious with debt. Simple lessons like teaching your kids the difference between spending on wants and needs can go a long way. Really, anything that involves money can be used as a learning tool to teach financial lessons.

For 6 tips on how to be a good money role model, read more Viewpoints at Fidelity.com: Be a great money role model.

2. Have open conversations about money

You don't need to share the entirety of your financial situation with your kids, but talking openly about finances can help demystify money for them and help promote healthy financial habits. Consider sharing a financial goal of yours with them, talking about money decisions you've made that you're proud of, or giving them a "budget" when they want something new. These could all be effective ways to teach your kids the value of money and the importance of managing it.

To learn more about talking to your kids about money, read Viewpoints at Fidelity.com: 5 ways to teach your kids about money.

3. Save for their higher education

Remember that higher education, such as college or trade school, can be incredibly expensive and seems to come quicker than we think it will. Given that the average annual cost (tuition, fees, and room and board) for a 4-year, in-state public college was $21,950 for the 2019-2020 tuition year, and $49,870 per year for a 4-year private college, it's no surprise that college expenses can be overwhelming.* It's never too early or too late to start saving.

A 529 savings plan is an option that can help you do this. If you can, try to make small monthly contributions, or even automate your contributions. Another idea is to ask relatives to make contributions toward your kids' education plan instead of giving toys at holidays or birthdays. Or if your kids decide to work before college, you could also offer them some sort of matching program. For example, for every 50 cents they contribute, you will match with a dollar.

To learn more about how 529 plans can help you plan smarter, read Viewpoints at Fidelity.com: The ABCs of 529 savings plans.

4. Don't put yourself last

Think about your finances with an "oxygen mask" mentality—protect yourself first. Make sure your retirement accounts are on track before you start funding anyone else's education. Your kids can take on loans for college if they need to, but you can't take a loan for retirement. And if you haven't saved enough for retirement, your kids might end up becoming financially responsible for you. So remember that saving for your retirement is for you and for them.

For more tips and resources for your money and beyond, go to the Modern Life website. Also, make sure to sign up below for the Modern Life newsletter for stories, tips, and resources delivered to your inbox every week.

Next steps to consider



Get more Modern Life


Subscribe to our weekly newsletter on the Modern Life website or below.



Are you saving enough for college?


Check to see if you're on track with our college savings calculator.



How to ask for gifts to a 529


Gifts to a child's 529 account can provide a lasting benefit.

  • Facebook.
  • Twitter.
  • LinkedIn.
  • Print
close
Please enter a valid e-mail address
Please enter a valid e-mail address
Important legal information about the e-mail you will be sending. By using this service, you agree to input your real e-mail address and only send it to people you know. It is a violation of law in some jurisdictions to falsely identify yourself in an e-mail. All information you provide will be used by Fidelity solely for the purpose of sending the e-mail on your behalf.The subject line of the e-mail you send will be "Fidelity.com: "

Your e-mail has been sent.
close

Your e-mail has been sent.

Subscribe to the Modern Life newsletter

Create the life you want. Learn from those who've done it—with insights, tips, and resources delivered to your inbox every week.