By: Diane Darling
An Evil Stepmother’s Guide for Teaching Your Child Personal Finance, PART 1
I am in a family situation in which I do not have biological children of my own, but I do have a 14-year-old stepson – one whose future financial security I worry about on a daily basis!
Personal finances can be a touchy subject with children – how much do you discuss with them? How much about your family finances do you keep from them? There is a healthy balance between teaching them to understand the importance of money and not forcing them to stress about money at a young age.
I believe being a stepparent has provided a helpful balance for our family when approaching financial education. As a stepmother, I am not hindered by the biological need to spoil the child in my life, but can instead focus on how to empirically make him a financially savvy adult. Sometimes this can make me the “Evil Stepmother” in the present, but the skills he is learning from me will undoubtably help him in his future!
Here are some tips for thinking like an Evil Stepmother with your kids in regard to spending, saving, and being frank about money:
- Guide your children on how best to divide spending and savings. We have reviewed the recommended 50/30/20 Rule with my stepson, and have modified that for his needs as a teenager. His “Needs” look more like “Wants” at this point in his life, so 80% of his money (the 30% “Wants” and 50% “Needs” combined) is his to spend. As his parents, we have insisted that he save 20% of his money for future goals and big-ticket items. As he gets older, his savings will shift to be in the form of investment options, which we will discuss in a later part of this series.
You might also consider discussing with your child setting aside a percentage for “giving”- if your family is in a situation where donating/giving is an option, you can do this as a family by encouraging your child to set aside a percentage to give to the charity of their choice annually, with you setting the example by doing the same.
- Be (appropriately) frank about your family’s money situation. A couple of years ago, money around the winter holiday was tight. As the main breadwinner of the house and resident Evil Stepmother, I could not imagine derailing long-term goals for a child’s immediate present-getting gratification. It turned out, I needn’t have worried – having open conversations helped with his compassion and understanding about how we were planning for both his wants and our financial needs and long-term goals as a family. This also serves to help children not be caught off guard when they themselves are adults – many young people leave home without a clear picture of what financial obligations adults have.