Fostering Good Financial Habits
Erica and her husband are foster parents. They currently have a teenage foster daughter, and they're trying to give her some financial wisdom. What's the best way to teach her how to handle her finances?
QUESTION: Erica in Sioux Falls and her husband are foster parents. They have two children of their own as well. They currently have a teenage foster daughter, and they’re trying to give her some financial wisdom. For a teenager, what’s the best way to teach her how to handle her finances?
ANSWER: Given that you don’t know the timeframe she’s going to be with you, obviously that’s going to affect the amount of impact you have in several areas of her life, money being one of the things you’re addressing while you’re loving her well while she’s under your roof.
On the money side of things, what we talk about is being age appropriate, so it would be different for a 14-year-old than it is a 4-year-old or a 24-year-old than it is for a 14-year-old. It changes, but these four concepts you’ve got to figure out a way to implement. The first thing is you have to teach kids to work. Again, when you’re 4 years old, we’re not putting you in the salt mines. You can do a lot of things at 13, whether it’s things around the house or babysitting in the neighborhood or dog walking in the neighborhood. Of course she’s only 13, so you’re looking over her shoulder. She is not grown. Teach her to work.
Once she’s earning money, either from you for having done work or done work in the area or the neighborhood—whatever—then you can teach her the other three things. You want to teach her to spend wisely. That’s the enjoyment of money. You want to teach her to be a giver—to be generous. That’s also an enjoyment of money. You want to teach her to save and invest for the future. For instance, in this case, if you could come up with some short-term savings goals, you might have a reasonable guess as to how long she’s going to be with you, and six months or three months or whatever the deal is, we’re going to lay out some reasonable goals to try to save up for an item. Just have some goal setting and say, “Okay, this item is $30. We’ve got to save $10 a month for three months.” That’s the saving side.
The giving side is fairly easy. If you are people of faith, then you would give in your house of faith. Christians obviously give a tithe to our local church.
I think you just lay out each of those, and then you can take her deeper into those subjects. The brighter she is, the more mature she is, and the longer she’s with you, the more sophisticated you can get.
If the child was going to be with you, yes, I would be matching toward the purchase of a car. Where you have a short-term situation, you’d have to make the choice about what you want to do with that because the problem is that she doesn’t own the money. When she moves back into the situation she came out of or into a more permanent situation, we don’t know what’s going to happen to that money you gave her then. You’ve got to be thoughtful about that. If she’s going back into a situation that wasn’t good before and they think they’ve got it straightened out but they’re not sure but sure enough that they’re letting her go back … I’m not real excited about sending money into that situation. Not to punish her, but I don’t want some adult misusing it. You’ve got more wisdom and knowledge about that kind of thing than I do since you’re working in the foster system and you know what you’re facing in those kinds of things. That’s how I would get at it.