Readers Share Tips for Raising Money Smart Kids

What's the right age for a child to have their own credit card? Opinions vary.

Photo of a boy and his father stacking coins
(Image credit: Getty Images)

Making kids and young adults money savvy appears to be much on the minds of readers, judging by responses I’ve received to my columns on kids and money (What Kids Need to Know About Finances) and building financial confidence among women (Financial Planning and Investing: Women Closing the Confidence Gap).

For instance, Ramin Hashemi writes that when his two daughters were young, “I had a deal with them to double their money from babysitting and refereeing soccer games if they invested it. I would deposit the funds into a brokerage account and buy fairly low-risk stocks they could relate to.” Now in their late twenties, his daughters are both teachers who are “on top of their income, spending, investments and retirement plans.”

Reader Jeff Prouty recently was asked for financial advice by a 22-year-old friend of his daughter. Tops on his list: “Live below your means.”

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Steve Cline recalls that in the mid 1950s, his father gave him a 35-cent-per-week allowance and two pieces of advice: “Spend some, save some and give some to the church or to charity,” writes Cline. “Also, a dollar saved is better than a dollar earned because you don’t have to pay taxes.” By following that advice, says Cline, his parents “worked hard, raised five sons and lived a comfortable life.”

Credit card advice and more. A couple of readers questioned my advice on credit cards for young people.

“You note that kids shouldn’t get credit cards. But there’s a good reason to let them start early: establishing a credit history,” writes Theodore Wagenaar. “I added my then-16-year-old daughter on one of my credit cards. When she later got her own card, she already had a stellar credit history.”

Debbie and Jay Zimmer added their daughter to their credit card when she was in high school, with one condition: “She was required to pay us in full for anything she wanted to charge to the card,” writes Jay.

I understand this point of view, but I still prefer that young people wait to get a credit card until they are old enough to get one in their own name—usually 21—and pay the bills with their own money. Your personal experiences with credit may vary, but credit card companies were happy to issue my three children cards when they turned 21. Piggybacking on a parent’s credit history won’t do much good if young adults don’t have the self-discipline to rein in their spending when they get their own card.

If you really want to add a child to your account, at least follow the Zimmers’ example and require your child to pay for his or her purchases.

A couple of readers—Jamal Kazmi and Henry Barclay—requested recommendations for books on money and investing that would be appropriate for high school students. I’d suggest How to Turn $100 into $1,000,000, by James McKenna and Jeannine Glista, and The Motley Fool Investment Guide for Teens, by David and Tom Gardner.

Finally, Victoria L. has a plea for help. “I have tried to instill money management in my 16-year-old granddaughter, but to no avail. Her mother, my daughter, gives her whatever money she wants. I’m trying to find something that will pique her interest and make her realize that money’s not a freebie.”

Victoria, I’d suggest that you have your daughter read the advice in What Kids Need to Know About Finances. She’s not doing your granddaughter any favors, and it may help if she hears that from someone other than you.

You might also try a couple of the strategies suggested by readers. Like Ramin Hashemi, you could offer to double your granddaughter’s savings for something special she wants. Or you could purchase shares of stock in a company that appeals to her. That’s what Henry Barclay is planning to do for two granddaughters who will graduate from high school next year.

Janet Bodnar

Janet Bodnar is editor-at-large of Kiplinger's Personal Finance, a position she assumed after retiring as editor of the magazine after eight years at the helm. She is a nationally recognized expert on the subjects of women and money, children's and family finances, and financial literacy. She is the author of two books, Money Smart Women and Raising Money Smart Kids. As editor-at-large, she writes two popular columns for Kiplinger, "Money Smart Women" and "Living in Retirement." Bodnar is a graduate of St. Bonaventure University and is a member of its Board of Trustees. She received her master's degree from Columbia University, where she was also a Knight-Bagehot Fellow in Business and Economics Journalism.