3 Expert Tips for Raising Financially Responsible Kids
ByJohn Russo
UpdatedJul 1, 2025
- Parents should teach their children to be financially responsible kids like many other life skills.
- Get your kids involved in everyday financial decisions.
- To become financially responsible, expose your kids to budgeting, student loans, credit cards, and saving money.
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Where did you first learn about personal finance? If you’re like most Americans, it wasn’t at school. While some schools offer personal finance workshops for students, the responsibility of raising financially responsible kids typically falls to parents.
It can be hard to teach your kids about money, especially if it isn’t your strong suit. But raising your kids to be financially responsible could give them a leg up later in life, when they have to start making financial decisions for themselves.
We’ve asked three financial experts to weigh in and share their top tip for what kids need to know about money, and how you can help teach it to them:
1. Get your kids involved in your budget
Money can be tough to talk about. But when you educate your kids about your own finances and model financially responsible behavior, they’re likely to do the same when they grow up.
According to personal finance expert Daniel Cohen, “Showing your kids how you use your budget to pay for monthly expenses, manage debt, and save money helps them understand the basics of financial responsibility. It’s even better if you set them up with their own budget based on their allowance so that they can practice budgeting on their own.”
In addition to helping them set up a budget for their allowance, explaining how your household budget works also can help in the effort of raising financially responsible kids.
2. Teach your kids to save up for large expenses
It’s good to teach your kids basic financial responsibilities like budgeting. But there’s more to personal finance than that. It’s also important to teach them about how to reach big financial goals—like buying a home.
“Talk to your kids about different savings tools so that they become comfortable with these terms and products early on.”
“Talking to your kids about how you’re saving for long-term goals is important, but don’t stop there,” says Kyle Enright, an expert in home mortgages. “Take the opportunity to talk to them about different savings tools: teach them about stocks and bonds, high-yield saving accounts, and any other product you might be using to save for your next home so that they become comfortable with these terms and products early on.”
3. Talk to your kids about student loan debt
Being in debt gets in the way of living how you want to live—a reality that most of us shield our children from. That’s why teaching them about how to avoid the pitfalls of debt when they’re young is a crucial part of raising financially responsible kids.
As many young Americans and their families take on student loans, there have been unintended financial consequences. According to a Freedom Debt Relief survey about how Americans approached their debt, 40 percent said that they were delaying their life goals like home ownership because of debt, including debt from student loans.
“It’s important to have meaningful conversations with your kids as they start the exploration process around going to college,” says Michael Micheletti, Director of Corporate Communications at Freedom Debt Relief. “These conversations need to include the college experience, the impact of student loans, and the importance of a career.”
“It is well documented that student loan debt has had more of a negative impact on millennials when compared to previous generations, so it is important to explore all financing options like Pell Grants, FAFSA, scholarships, grants, the use of home equity, and federal aid.”
As a parent, it’s up to you to educate your kids about being financially responsible. That way, they’ll be on solid financial footing when they’re grown. No matter what you do, don’t be afraid to talk to your kids about money. The more you can teach them early on, the better off they’ll be in the long run.
Raising financially responsible kids starts with you
Teaching your children how to deal with debt and money is important, but it’s always best to educate yourself first. We’ve developed a simple-to-follow guide to help you and your kids create the habits and mindset that will lead to a better financial future. Get started by downloading our free guide right now.
Learn More
Ready to Teach Money Skills at Home? (Freedom Debt Relief)
How to Pay Less for College—What You Need to Know (Freedom Debt Relief)
A look into the world of debt relief seekers
We looked at a sample of data from Freedom Debt Relief of people seeking the best debt relief company for them during May 2025. This data highlights the wide range of individuals turning to debt relief.
Credit utilization and debt relief
How are people using their credit before seeking help? Credit utilization measures how much of a credit line is being used. For example, if you have a credit line of $10,000 and your balance is $3,000, that is a credit utilization of 30%. High credit utilization often signals financial stress. We have looked at people who are seeking debt relief and their credit utilization. (Low credit utilization is 30% or less, medium is between 31% and 50%, high is between 51% and 75%, very high is between 76% to 100%, and over-utilized over 100%). In May 2025, people seeking debt relief had an average of 74% credit utilization.
Here are some interesting numbers:
| Credit utilization bucket | Percent of debt relief seekers |
|---|---|
| Over utilized | 30% |
| Very high | 32% |
| High | 19% |
| Medium | 10% |
| Low | 9% |
The statistics refer to people who had a credit card balance greater than $0.
You don't have to have high credit utilization to look for a debt relief solution. There are a number of solutions for people, whether they have maxed out their credit cards or still have a significant part available.
Personal loan balances – average debt by selected states
Personal loans are one type of installment loans. Generally you borrow at a fixed rate with a fixed monthly payment.
In May 2025, 44% of the debt relief seekers had a personal loan. The average personal loan was $10,718, and the average monthly payment was $362.
Here's a quick look at the top five states by average personal loan balance.
| State | % with personal loan | Avg personal loan balance | Average personal loan original amount | Avg personal loan monthly payment |
|---|---|---|---|---|
| Massachusetts | 42% | $14,653 | $21,431 | $474 |
| Connecticut | 44% | $13,546 | $21,163 | $475 |
| New York | 37% | $13,499 | $20,464 | $447 |
| New Hampshire | 49% | $13,206 | $18,625 | $410 |
| Minnesota | 44% | $12,944 | $18,836 | $470 |
Personal loans are an important financial tool. You can use them for debt consolidation. You can also use them to make large purchases, do home improvements, or for other purposes.
Tackle Financial Challenges
Don’t let debt overwhelm you. Learn more about debt relief options. They can help you tackle your financial challenges. This is true whether you have high credit card balances or many tradelines. Start your path to recovery with the first step.
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Written by
John Russo
John Russo is a Creative Manager at Freedom Debt Relief. His goal is to make the world of personal finance more accessible so that everyday people can find the right financial solutions for themselves. In his free time, he enjoys hiking, reading pretty much anything, and spending time with his fiancée and two cats.
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