CSU Extension Adams County Home CSU Extension Home CSU Home


Credit & Spending

How Not To Raise Big $penders and Credit Junkies

You cannot follow the principle of “Do as I say, not as I do” to teach your child about money. Children learn their buying patterns and attitudes toward money from the actions of adults in their household.

Many of the media messages that children see and hear tell them that spending increases happiness and popularity. The National Institute for Consumer Education recently reported that $12 billion worth of advertising is aimed at children each year. American children spend over $166 billion each year and directly influence their parents to spend another $250 billion.

Dr. T. Berry Brazelton believes that parents need to begin teaching good money habits by setting limits around age two. Dr. Brazelton feels this helps children develop self-control and learn how to delay gratification. Learning self-control will help them avoid growing into “big spenders”.

Children can learn responsibility and a sense of family teamwork as early as age two. They can help with simple household tasks that do not create a safety hazard for the child. For example, they can carry silverware and unbreakable dishes to and from the table.

By the time a child is four, she can begin to earn an allowance for helping. Children at this age can also identify goals such as a much-wanted toy, a video, or a trip to the movie and to save to accomplish the goal.

Holidays and birthdays also provide opportunities for saving. When a child receives money as a gift, she can be encouraged to save at least part of it to buy gifts for others. Children four to six years old really enjoy shopping for gifts with their own money.

Parents can develop their preschool child’s decision-making skills by offering the choice between two cereals or other foods they really want to buy. Explain how the products are different such as; how may servings are in each box, the difference in the taste of the two products, and even what health benefits each provide. If a child makes poor choices talk with him about what he would do differently when given the same choice in the future.

Parents should look carefully at their own money habits. The way parents prioritize spending; saving, and sharing will be reflected in their child’s behavior. When parents using shopping as way to feel better, children learn the same behavior. This is one of main reasons people over-use credit and become “credit junkies”.

Talking about saving and sharing provides the opportunity for children to learn how sharing enriches their parent’s life and how saving generates wealth. Piggy banks and youth programs sponsored by financial institutions help children learn about saving.

Parents can model values such as sharing, thrift, and determination. Volunteering for a food bank or other charity organization with their parents can help children develop a sense of sharing. Enjoying free or inexpensive outdoor activities and checking books out from the library can teach thrift. Participating in sports activities and caring for pets can develop self-reliance, determination, and the ability to deal with adversity.

Dr. Brazelton suggests two important money beliefs children should learn by parental example:

  • Money is most rewarding when you earn it.
  • Money can enrich your life if you share it with others.

These beliefs combined with sound decision-making skills, goal-setting, and self-control can avoid the prediction made by Federal Reserve Chairman Alan Greenspan, that America’s children may become “a generation of financially illiterate people who are not equipped to inherit the global economy”.

Events Calendar

Family, Home & Consumer Menu


Family Financial Management
Food Safety & Nutrition
Family Matters Newsletter


Related Resources