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Help Kids Make Good Money Choices

Whether you’ve accepted it or not, your teenager or young adult child soon will need to make tough decisions regarding money and you can’t always be there to guide them. Do you know if they will make the right choices?

The Financial Identity Quiz is a research-based tool intended for teens and young adults (approximately ages 16-24) to determine where they are on their path to financial independence. It also can be a great conversation starter for parents to begin transferring financial responsibilities. Start by exploring the Financial Identity resources and walking through the questions yourself before inviting your children to take the quiz.

Go to the Financial Identity Quiz

Once your children have taken the quiz and you know their Financial Identity types, you might wonder what you can do to encourage them in their journey. Take a closer look at each Financial Identity for possible action plans.

Hiking boots on a path representing a Tenderfoot financial identityTenderfoot

This personality has the most to learn, and often will approach decisions carefully, which can be a good thing. Try the following activities to encourage your Tenderfoot to take responsible and necessary risks.

Activity 1: Help your children imagine that they are living on their own. What if they had a financial emergency (car failure, unforeseen medical bill, job loss, etc.) and suddenly needed to raise $500. If they couldn’t ask you or another guardian, how would they come up with the money on their own?

Activity 2: Review a real-life scenario, such as finding a place to live after graduation. Do real research about expected income, and use sites such as to determine potential living situations. Factor in things like transportation costs, utilities and other living costs to determine how much money they would need to live comfortably. What trade-offs would they be willing to make? For example, would they live with roommates and take public transportation to live in a certain neighborhood? How would they track and manage their spending?

A compass representing a Pathfinder financial identityPathfinder

Fully committed to exploring their own paths, this personality may still need guidance from time to time (even if they don’t think they do). Try working through the following questions to encourage thoughtful discussion about financial goals.

Activity 1: Financial mentors are helpful throughout a lifetime. Who are your children's role models other than you? If they don’t have mentors currently, help them find a money hero such as a celebrity, author, blogger or online personality who inspires their financial journey. Perhaps this hero paid for his or her own college, got a dream job or studied abroad. Discuss the steps your children’s money heroes likely took to reach their goals, and make a plan for how those principles might be applied to your children's own lives.

Activity 2: What has been your children's proudest moment with regard to money (e.g., saving earnings from a summer job, paying for car expenses or planning for prom)? Challenge your children to explore ways they could build on their past success to increase savings or better plan spending. How might those good habits be applied to future goals?

Silhouette of a person looking in the distance representing a Nomad financial personalityNomad

It may be true that “not all those who wonder are lost,” but your financial explorer could use some structure to help shape their money habits. Use these activities to encourage a responsible approach to financial discovery.

Activity 1: Help your children think of a time when they paid more for something because of a failure to plan or do research. Examples could include paying a late fee for a movie rental kiosk, showing up to an event without enough cash, missing the deadline for an activity or having to buy something at a gas station because other stores were closed. How can these experiences be teachable moments about financial obligations?

Activity 2: What habits do your children already embrace in sports, academics, after-school jobs or community service roles that could be applied toward financial matters? Examples might include practicing regularly, learning new techniques or striving for excellence. Many of the positive habits from other areas of life can form the basis of a strong financial life as well. What financial areas could your Nomad “practice” a few times a week? What new techniques might they learn?

A rope bridge leading to the unknown representing a Trooper financial personalityTrooper

It’s flattering to have your children follow in your footsteps, and it can be a sign of your strong relationship. However, you also want them to make decisions that are right for them, not what would be right for you. Try these exercises to help them take ownership in their money matters.

Activity 1: Ask your children about a time when they acted independently. How did it turn out? How did they feel knowing that they acted on their own behalf? Help your children write a list of the personal values and priorities they might use when making decisions on their own. Where would they look for information; how would they determine if resources are trustworthy; and how would they know if the final decision was the best one?

Activity 2: Share with your children a story of someone who taught you about money when you were growing up. If you didn’t have a money mentor, what resources did you use to get the wisdom you needed? If you did have a mentor, what steps did you take to create an independent plan all your own?

While it’s impossible to know your children completely with a simple quiz, the Financial Identity Quiz can give valuable insight into how they approach most money situations. Armed with the results and the right amount of gentle guidance from you, they will have just what they need to unlock their best financial future.

[Any reference to a specific company, commercial product, process or service does not constitute or imply an endorsement or recommendation by National Endowment for Financial Education.]