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Thought Leadership Thursday

Setting Up Children for Financial Success

McRae Miss

Thought Leadership Thursday Article

Setting Up Children for Financial Success
April 29, 2021
State Treasurer
Dear Colleagues,

Throughout Financial Literacy Month (or Financial Education Month, as we call it in Mississippi), I produced a weekly column for local newspapers and corresponding social media posts that shared tips about the ways families could improve their financial literacy and savings skills. But perhaps the most important element of that outreach was a piece about how to talk with kids about money.

Nearly 7 in 10 parents report that they are reluctant to talk about money with their children. And as a dad, I get it. It can be awkward to discuss about how much or how little you have with kids who might not understand the intricacies of a family budget – or the value of a dollar. But it’s important to do nonetheless.

Katherine Martinelli with the Child Mind Institute writes: "Teaching children to be financially responsible early on will help them cope with challenges like setting limits, planning a budget and resisting impulse buys."

So, how young is too young to start these conversations? A University of Wisconsin-Madison study found that kids can begin to understand basic financial concepts by age three. So, it’s never really too early.

Financial guru Dave Ramsey does, however, share a few tips to start the conversation that I wanted to share with you today.

First, he says, "start slow." You probably don’t need to talk with your 8-year-old about the differences between a SEP IRA and 401(k). But you could have them create a budget based off their allowance. Consider working with your child to put a portion of their allowance directly into a savings account, give a portion to a charity or church, and reserve a portion for short-term spending.

Then, Ramsey advises, be honest. He writes: "If you regret going into debt or not saving more for college, tell your kids…. [They] can handle it—really."

Next, Ramsey gives any parents nervous about disclosing their salary an out. He encourages you to talk values (such as budgeting and saving), not figures. The truth is, regardless of whether you’re talking about a $40,000-a-year salary or a $10-a-week allowance, these broad concepts apply.

Fourth, he encourages families to set goals together. Whether it’s a vacation or a car, let kids know what you’re saving for and allow them to participate in the process.

Finally, learn about money together. I’m excited to share that the State Treasury in Mississippi has put together a series of tools to help families do that. Please visit to find a curated a series of games, activities, and financial tools that every member of the family can use. At the very least, we hope this outreach starts the money management conversation around a few more dinner tables.


David McRae
Treasurer, Mississippi


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