Elisabeth Donati, founder of The Money Camp, says parents should “run the money”—the cost of raising a child—through their children for decision-making. Is she on to something?

What involvement do you have in helping your clients raise financially literate kids? Is this part of the financial advisor’s role? Are your clients asking you for this service? If so, how are you helping?

Discuss it here with your colleagues.

 Carly,

I did not see when she recommended assigning that decision making to the children.  Age 6?  Age 12?  Age 18? 

What additional value does it provide to equate the decision to the total cost of raising a child?  Many financial educators recommend that children have growing responsibility for their own expenses so the children can make mistakes with money in a low risk environment.  How does it help to relate to the total cost rather than simply saying the child has $XX to cover YY expenses?

Many financial educators also disconnect chores from allowance.  You do chores because you are a member of the household; you receive spending money because you are a member of the household.  My mistake with allowance for my children was not aligning the amount of the allowance with the expenses that needed to be covered.  Both of my children received more allowance than they needed so they did not have to ration spending.

Regarding your other question, parents are the best financial educators.  They start the lessons as soon as the children can conceive of money and demonstrate their money behaviors every day.  Do the parents shop for entertainment?  Do the parents save regularly?  Do the parents buy things after they have the money?  Financial planners can help the parents model good behaviors by coaching the parents through individual situations and pointing out the good behaviors their children should learn.

Other ideas?

John Comer,

Principal, Comer Consulting and

Director of Financial Literacy, FPA of Minnesota