Black parents provide advice on the best ways to teach your children about good financial habits. (Photo courtesy of Suad Kamardeen on Unsplash)

By Helen Bezuneh,
Special to the AFRO

Teaching your children how to build generational wealth isn’t the easiest thing in the world––but it can certainly be done. This month, the AFRO held conversations with Black parents to discuss the top four ways to build financial acumen in children. Read the tips below to ensure that the little ones in your life are on the path of financial stability and success.

  1. Talk about money when you’re around your children

While there may be some stigma regarding discussing your financial business around your children, the parents who spoke to the AFRO couldn’t feel more differently. They strongly recommend talking about your financial decisions with your children, which can create better understanding of how adults make appropriate financial choices.

“I always talk about money,” said 52-year-old Mary Johnson, an activist from Delaware and mother of four to children ages 9, 13, 14, and 17. “I do simple things that they understand, like go to the movies– but [I ask] ‘how much is it gonna cost?’ ‘How much are we gonna be paying when we go buy popcorn and soda? Is that in our budget?’ And then when we’re riding in the car, I teach them about gas and mileage. Young kids at that age understand.”

Shawntel Reece infuses a sense of gratitude into her financial practices.

“I really tell them that it’s a privilege to have a mortgage, it’s a privilege to be able to pay your bills,” said Reece, a 43-year-old social worker from California and mother to two kids ages 18 and 14. “I’m a single parent myself, so it’s not always easy, but we do travel a lot as a family. I explain to them, ‘In order to be able to do this, mom makes sure that the bills are paid.”

  1. Set the example

According to these parents, you can’t expect your children to adopt good financial habits without doing so yourself. As with other aspects of life, children learn how to deal with money by observing how their parents deal with money. 

“If they ask me, ‘Hey can we get this?’ or ‘Hey can we get that?,’  I’ll be honest,” said Reece. “They understand that I get paid biweekly. So I’ll say ‘If I have the money’ or ‘not this paycheck’ or ‘this portion goes to mortgage.’”

“You’re going to be the example,” she continued. “If you’re spending more on yourself than on your kids, guess what? Your kids are going to pick up that same thing.”

Johnson thinks along the same lines since her parents were conservative about money.

“I learned from them,” she told the AFRO. “I teach my kids about choices, good choices and poor choices. I have my kids do the budget for how much money we have, the bills we pay, we sit at the table and do that. But I let them know, ‘After we do this, what do we do with the money that we have left over?”

  1. From a young age: teach them to save, save, save!

It’s extremely important to teach your children about the consequences of overspending when they’re young. Reece, for example, says that kids need to understand “the concept of ‘I need to work in order to have money.”

“First you put it in the bank [and] when you get money, a percentage you get to keep and then you always put some in your savings,” Reece said as this gets children in the habit of depositing their savings. “Any kind of money, from birthdays to gifts to graduations, it’s not just money to go out and splurge. Just showing them there needs to be a portion saved. Then 10 percent goes to God, so we always give our tithes, we give it back because God is the one who blessed us with the money.”

“My 18-year-old will just blow through her money,” she added. “And my 14-year-old is the exact opposite, she’s more like me and understands that when she gets her money, it goes straight to the bank. And she understands she has a savings and regular checking account at 14, which she manages very well with the understanding that ‘Okay, I need to make sure that I have a certain amount in my account, and if I don’t, then I need to start working.’ She’s 14-years-old and has always kept a steady job, whether it’s babysitting or cleaning for her grandparents.”

Creating bank accounts for your children can also teach them about how to independently spend and save, Johnson said.

“I opened each of them a bank account at Wells Fargo and they do get an allowance for doing things around the house,” she noted. “Whatever allowance I give them, they put 10 percent in the bank.”

  1. Teach your kids to maximize their profits

According to these parents, children have more of a capacity for participating in the financial world than most think. Stocks and businesses, they said, aren’t limited to just adults.

“My kids are actually kid entrepreneurs,” said Martika Jackson, a 31-year-old entrepreneur from Augusta, Ga. and mother to two kids, aged 11 and 6. “They are empowering young kids to learn how to love themselves and the power of affirmations. They have a product line, which is called Shea Butter Empowerment and they create t-shirts, backpacks, teddy bears, and we have a doll collection. It’s actually my way of teaching them early about financial literacy because I learned financial literacy later in life. So my goal is to teach them everything so they can work for themselves and don’t have to be on anyone else’s clock.”

“We go over budgeting, we go over inventory, we go over profit margins, we also go over the platforms that we use and how we’ll be able to scale to be able to make extra, additional money for their business,” Jackson expanded. “If your kid is very adamant about starting their own business, and if they don’t understand the whole concept, research, get mentorship and just sit down with them and allow them to understand the basics. Go over daily flashcards maybe, watch Youtube videos, different things that will grab their attention at a young age.”

Johnson makes sure that she not only teaches her children about investments, but also gets them involved.

“I teach them young,” she said. “We look at the stock market. My kids have their own stock portfolios. They know about margins, they know about how much money they have.”