Money – mardihumphreys.com

The Bargain

A company you like has an open position you want. You had a discovery conversation with the hiring manager and you submitted your resume and cover letter. (It’s 2025, why are cover letters still a thing?! Please comment if you know.) It’s time to interview. They will tell you what they want from the new hire and you will tell them the conditions under which you’re willing to work. How can you make this negotiation productive for both you and your potential employer?

Reality Check

Let’s use the Tech Industry as an example. In terms of employment, it’s been volatile since the pandemic. Tons of people were hired in 2020, then big companies started letting tons of employees go in 2022 and those layoffs are still happening. Under these conditions, negotiating your compensation may feel intimidating. With companies regaining leverage, you need to enter the interview knowing what the state of the industry is and how that impacts the benefits you want. Here is an article that tells you how to research a company’s financial stability.

Research

Look up the market rates for similar roles in your location on PayScale, Salary.com, or Glassdoor. Define three numbers: The minimum salary you will accept, the ideal salary you’d be thrilled to get, and your walkaway number. Factor in personal costs. For example, what is your cost of living? What career growth opportunities will the employer offer? What are your work-life balance needs?

Salary

Most companies have a budget for each position, but they may not volunteer this information. It’s important to find out what they are willing to pay before you reveal any of your three numbers. When the hiring manager asks you how much money you want, try this response: “I’m open, but I’d love to understand the salary range you have in mind for this role.” This prevents you from lowballing yourself and gives you a baseline for negotiation. Once you know the range, push for the top. If they offer $90K–$110K, make a case for why you deserve $110K. Give illustrations of your experience, projects, and results. For example: for a Software Developer: “In my last role, I improved system performance by 30%, reducing downtime and saving the company an estimated $200K annually.”

Benefits

Compensation is more than a paycheck and benefits can make a huge difference in how attractive the job is. You also have to acknowledge that there will be tradeoffs. For example, if you push for a higher salary, then they may push for you to be in the office full-time. Consider negotiating for remote/hybrid work options, additional PTO, an upskilling budget, and/or equity or bonuses.

Mindset

Approach negotiation as a two-way conversation, not a battle. Filling this role is a challenge for the hiring manager. Act like the problem-solver you are by using “we” language. For example, “We want to ensure this is a strong long-term fit. Can we adjust the offer to reflect that?” By framing your requests as suggestions you signal your intent to help them achieve the result they want.

What other strategies do you use when negotiating compensation? Please share in the comments

Money Missteps

Your money is more than numbers in a banking app. It’s deeply tied to your emotions, habits, and decisions. Missteps like overspending, ignoring debt, or failing to prepare for the unexpected, can quietly sabotage your financial goals. Let’s explore common money mistakes, why they are dangerous, and how to fix them, so you can take control of your future.

Impulse Spending

You’ve had a long day packed with back-to-back meetings. So, you have dinner delivered. The next day, you grab an expensive coffee. The next day you splurge on a new gadget that promises to boost your productivity. Those small decisions over the course of three days added up quickly.

Why It’s Dangerous

These habits often develop as coping mechanisms and they create a false sense of comfort while draining your resources. Work stress depletes your decision-making capacity, and impulsive purchases feel like a quick fix.

How To Fix It

Pause: Before buying ask yourself, “Do I really need this?”

Parameters: Allocate a weekly budget for discretionary spending and stick to it. Track your spending to identify unnecessary expenses and cut them.

Plan: Prepping meals and bringing your own coffee to work avoids costly, last-minute decisions and helps reduce the temptation to overspend.

Convenience

It’s easy to rely on credit cards or personal loans for emergencies and make repayment a challenge for future you.

Why It’s Dangerous

Debt often feels like an immediate solution, but it can snowball into a long-term burden.

How To Fix It

Recognize: If your borrowing is fueled by emotion (e.g., you feel shamed because your phone is three years old and your coworkers’ phones are brand new) before purchasing, write a 250-word reflection on why you feel you need it.

Research: If the purchase is essential and it’s for work, check your benefits plan. Many enterprise workplaces offer employee discounts on essential purchases.

Repay: Set aside a portion of your income to pay down debt even if it means tightening your budget temporarily. Pay off credit cards and loans with the highest rates first.

Emergencies

A car repair, medical bill, or sudden job loss can derail even the best-laid plans if you don’t have a financial safety net.

Why It’s Dangerous

Building savings often feels like a luxury when you have competing demands like rent or student loans. But without an emergency fund, you’re forced to rely on credit or loans, setting back your financial progress.

How To Fix It

Activate: Begin with a goal of saving $1,500 for emergencies, then gradually build up to three to six months’ worth of expenses.

Automate: Direct deposit a percentage of each paycheck into a separate savings account. Even $20 per week adds up over time.

Analyze: Where can you cut back without feeling deprived? Redirect funds from unused subscriptions or discretionary spending toward your emergency fund.

Action Steps

Audit: Take an objective look at where your money is going and identify areas for improvement.

Boundaries: Define clear limits for discretionary spending and stick to them.

Identify: Choose one habit, like over-relying on takeout or not saving for emergencies, that you want to change.

Commit: Make one change for the next week, like packing lunch twice or setting up automatic savings.

Evaluate: At the end of the week, see what worked and what needs adjustment.

Improving your financial habits starts with small, deliberate steps that align your spending and saving with your values and long-term goals. If you manage your emotions and make thoughtful decisions, then you can build a stronger financial future starting today.

What habit have you addressed to protect your financial future? Please share in the comments.

Presents or Presence?

I checked my data to see what I spent on the holidays last year. I have lists going back to 2020. Do you do that too? No? Just me? Okay. Anyway, I checked my data because I’m looking for ways to save money and I’m struggling. I want to be generous and I need to pay the electric bill. You too? Then let’s talk about some ways we can keep the holiday spirit without going into debt.

In a survey of Americans November 6 – 20, 2024, Gallup found we plan to spend $1012 just on holiday gifts (including gifts for coworkers) this year. If that number makes your wallet sweat, you’re not alone. With inflation still pinching budgets and financial stability on everyone’s mind, it’s time to rethink holiday spending; especially at work. You don’t have to be a Scrooge, but you do have to be intentional. There are plenty of ways to show both kindness and appreciation without spending a lot of money.

Research

Think back to last year. Did you give gifts to every member of your team, your department, and your remote colleagues? If so, consider whether that was necessary or if there’s a more meaningful (and affordable) way to celebrate this year. For example, Let’s say you work on a team of six people. Last year, you gave each coworker a $20 gift card. This year, suggest an alternative like a low-cost team activity; maybe an in-person potluck lunch or a virtual happy hour where everyone can participate without financial strain.

Redirect

If the majority of your coworkers insist on a gift exchange and it’s not in your budget to participate, declining can feel awkward. But you can do it gracefully. For example, your department organizes a Secret Santa. If you need to opt out, be direct but polite. You can say, “Thanks for including me! I’m trying to stick to a strict budget this year, so I’ll sit this one out. Have fun!” If appropriate, you can suggest an activity like coordinating a cookie swap during the gift exchange. This shows you’re still invested in the celebration and offers others who feel the same way you do a way to opt out too.

Redesign

Celebrations don’t always have to involve gifts. Instead, focus on experiences or gestures that build connection. For example, let’s say you’re part of a large department where individual gift-giving isn’t feasible. You could organize a group coffee outing where everyone covers their own drink.

Refuse

Once you’ve set a budget, stick to it. Don’t feel the need to justify smaller gifts or creative alternatives. Rehearse polite ways to decline gift exchanges if necessary. The holidays should be about connection, not financial regret. Most people value the thought behind a gift more than its monetary value. For example, you can give a heartfelt card or handwritten note expressing specific appreciation for each person’s contributions. Thoughtful words of affirmation leave a positive lasting impression far beyond the holidays while costing little money.

How do you handle holiday gifting at work? Please share in the comments.

Money to Give

For the last two weeks we’ve talked about giving both your energy and your attention to your coworkers in our current series, Give a Little Bit. This week in Part 3, let’s examine how you give your money to your coworkers and neither one of you realizes it.

From Conforming to Transforming

A scarcity mindset breeds competition, anxiety, and ultimately, limits. But with an abundance mindset, you create value that leads to growth not only for you but also your entire team. When you begin to treat your job as an art, you look for opportunities to give your art away. For example: When you share knowledge it is upskilling that your coworkers don’t have to pay for. The result is continuous improvement that saves the company money. Hopefully you will benefit in the short term. But even if you don’t, you will in the long-term. People need things and place value on those who can meet those needs. Your teammates have networks. They will happily introduce you to those connections because your habitual generosity will make them look good. If you were trained to conform to the belief that taking as much as you can is how you succeed, then do the opposite because that doesn’t work any more. Transform your mindset and habits to give as much as you can without expecting anything in return.

What It Can Look Like

Mentorship: Support newer team members or coworkers who would like some guidance. This helps you practice leadership and signals you’re invested in the group’s success, not just your own.

Visibility: Speak up on behalf of colleagues who are doing good work, especially if they’re uncomfortable amplifying themselves. By elevating others when they are not in the room, your acts of generosity make you someone others want to be close to.

How It Can Backfire

Being generous is the way to go, but I’m not going to lie. It can be hard. Here are a few obstacles you may face and how to handle them:

Misinterpretation: In highly competitive settings, your generosity might initially be seen as a tactic rather than genuine support. Keep going. When you behave consistently and with transparency, your actions eventually demonstrate your authenticity.

Limited Recognition: By focusing on your team, you may get lost in the background. Document and occasionally showcase your contributions to remind your manager of your worth and positive impact.

Taking Advantage: This is probably the first thing you thought of, right? If your environment is built on taking, then you are setting yourself up as a target for your teammates to take advantage of your generosity. The bad news is there will probably be some coworkers who insist on operating in a scarcity mindset. They will interpret your generosity as a weakness. These are the teammates you’ll have to set and hold your boundaries with. The good news is they cannot diminish how modeling generosity accelerates your own achievements.

At the end of the workday, it doesn’t matter how your teammates react to your generosity. When you maintain a mindset of abundance backed by practical acts of generosity the money follows. Generosity is a leadership skill you can put on your resume, on your LinkedIn profile, and talk about in your next job interview.

What knowledge do you generously share with your teammates? Please share it with us in the comments.

More Civil Service

I received valuable feedback on last week’s post. Thank you! Leaders asked how to immediately implement civility into their cultures. Formal training is not possible for every organization and adding another task to Human Resource’s to-do list is not a popular option either. So, this week, let’s continue the conversation around the civility trend. What if implementing civility into your culture is not expensive? What if it saves your company money? Or even brings in new revenue?

Civility as a Competitive Advantage

By building and maintaining an environment of civility you mitigate risk, attract top talent, and sustain productivity. A culture rooted in civility encourages collaboration and open communication. Organizations that embrace civility are more resilient, competitive, and profitable because it is a tool for both inclusion and knowledge sharing. Civility helps you create a workplace where employees feel valued, supported, and motivated for everyone to succeed.

Strategies to Encourage Civility

Positive Reinforcement: Implementing civility doesn’t have to cost a lot of money. Regularly recognize civil behavior and reward it either through formal awards or informal praise. When you highlight employees who demonstrate civility their behaviors are contagious and spread throughout the team. Normalize relentless respect. Spotlight random acts of kindness in your company newsletter. Take a team who lives inclusivity out to lunch. Celebrate those who go out of their way to show both effort and empathy. This can be as simple as a shoutout in an all-hands meeting or sending them an email of praise and copying leadership. Small and consistent rewards for civility can have a large impact.

Model Behavior: LinkedIn’s latest Workforce Confidence Survey says 7 in 10 U.S. employees would leave a job if their manager was bad. Retaining talent saves you money. Civility is an employee-engagement tool. Wield it by being mindful of how you communicate. Actively listen, maintain eye contact, ignore your phone, and encourage opinions that are different from yours. Recognize effort, not necessarily results. Acknowledge your staff’s hard work, even if the outcome isn’t perfect. Calling out enthusiasm demonstrates your support and builds trust. Pay attention to how different people prefer to communicate. Introverts, for example, may appreciate a written thank you note rather than having the spotlight thrown on them during a virtual meeting. Extroverts, on the other hand, would relish that.

Create Systems: Allow truth to speak to power. Create safe spaces for employees to express concerns or ideas without fear of consequences. You could hold open forums where staff can speak both freely and respectfully. You could send an email asking your team how they felt about communication and collaboration during their last project. Whatever you choose, use their input to make adjustments and keep the team aligned. For example, after the completion of your next project, send your team a short survey asking how they felt about the process. For example: “How comfortable did you feel contributing to group discussions?” or “Were you able to use your strengths?” This kind of feedback offers insights into how your team perceives their interactions both with their work and with one another. You can identify areas for improvement and make targeted changes to iterate to a more civil environment where everyone’s skills are used effectively. Use this data to capitalize on individual strengths while addressing interpersonal challenges and ensure the right people are working on the right projects. Business moves at the speed of trust. The faster your team can trust both you and one another, the more business your company can do and the more money it can make.

How do you use civility as a strategy for wise decision-making, stronger teamwork, and better results? Please share in the comments.

Hidden Risks

You want to make your hard-earned money work for you and the road to financial security can be winding and treacherous. There are plenty of organizations who shout about making you rich then whisper about the dangers involved. Turning control of your money over to someone else is risky. Here are three common pitfalls and how to avoid falling into their traps.

Credit Cards

Credit cards are convenient, short-term loans. They are easy to use, but they come with high-interest rates if you don’t pay off the full balance each month. Maxing out your credit cards, making only minimum payments, or missing payments can not only lead to mounting interest causing more debt over time, but also damage your credit score. This makes it harder to get loans in the future. For example, as of the end of Q2 2024, Americans had a total credit card debt of $1.28 trillion. Here in Ohio, our average household credit card debt was $9116. To avoid these pitfalls, you can set up automatic payments in your bank’s app to prevent missing due dates and make it a priority to pay off your balance each month. If you’ve already built up debt, consider consolidating it with a lower-interest personal loan. Or you could transfer your balance to a card offering zero-percent interest to accept your debt. If you’re thinking about transferring your balance to a new credit card, call your current credit card company first, tell them you are thinking about leaving them, and ask for a lower interest rate. It’s cheaper for them to keep your debt than lose you as a customer.

Cryptocurrency

Many people see it as a way to get rich quickly, but the truth is cryptocurrency is highly volatile. Just look at what happened to Bitcoin after a presidential debate where cryptocurrency wasn’t even a topic. Prices can rise and fall drastically in a short time. If you invest without fully understanding how these currencies work, you will lose a lot of real money when the market dips. To avoid pitfalls, don’t assume once you purchase cryptocurrency that it will keep growing. It’s an investment and is subject to the risks of any investment vehicle. Limit your exposure to the risks by not putting more of your savings into cryptocurrency than you can afford to lose. Diversify your investments by including more stable options like stocks, bonds, or mutual funds and review your portfolio at least annually to make sure you have a good balance of safer and riskier investments.

Personal Loans

They can seem like a quick fix, especially in emergencies or when you’re planning a major purchase. But they often come with high-interest rates, particularly if your credit score is low. Juggling multiple loans can strain your finances and make it harder to get out of debt. If you’re tempted to borrow money for non-essential purchases, like a vacation, stop and think about the long-term cost. If the loan has a high-interest rate, calculate how much money repaying the loan will really cost future you. It could easily double the cost of your trip. Your best move is to only use personal loans as a last resort, and only for emergency expenses, like medical bills. If you’ve already taken out a loan, create a plan to pay it off quickly. Tackling the principal early can save you a lot of money on interest. If you have multiple personal loans, consider consolidating them into one loan with a lower interest rate to make repayments easier.

How do you avoid financial pitfalls? Please share in the comments.

Slamming Your Spending

How you choose to spend money reflects your values, priorities, and circumstances. People around you—whether friends, family, coworkers, or complete strangers—judge your choices. Why do people care how you spend your money?

Why People Judge

Cultural Norms: Society has expectations about how money should be spent. You may be judged because your spending doesn’t align with what people consider appropriate. For example: You spend money on a weekend getaway and your parents think you should put that money in your IRA instead.

Personal Insecurities: If someone feels insecure about their own financial situation, they may project those feelings onto you. For example: You invest in a risky stock and your friend (who is not a financial advisor) tells you that was a mistake.

Envy: People may criticize your spending if they feel you’re enjoying luxuries they can’t afford. For example: You drive your new car to work and arrive at the same time as your coworker. As you are walking across the parking lot, they ask, “How much did that set you back?”

How to Respond

Priorities: Make financial choices that align with your values and goals, not other people’s opinions. For example, Let’s say you are saving money to buy a house and your friend is giving you a hard time because it’s preventing you from going on a cruise with them. You may respond, “Our priorities are different right now. Spending that money isn’t an option; raincheck?”

Boundaries: If you second-guess your decisions because of someone’s judgment, remind yourself why you made those choices. You know your situation better than anyone and you have the right to keep your spending habits private. If someone asks intrusive questions, shut them down with a simple, polite response. For example: “This is what currently works best for me.”

Reaction: Someone’s judgement reflects their perspective, not the reality of your situation. Reacting defensively can escalate your encounter instead of diffusing it so respond to criticism with calm confidence. Stay grounded in your values, set boundaries, and be assertive. For example: When your uncle criticizes your spending you can say, “I’ve made these choices because they align with my goals. Let’s talk about something else.”

Evaluation: Sometimes, people offer unsolicited feedback that may be valuable. If the judgment comes from someone you trust and respect, consider whether there’s any merit to their perspective. For example, if a financially savvy friend questions a decision you made, consider whether they have a good point. Ask yourself, “Is this spending preventing me from reaching my long-term goals?”

People: You can’t control people’s opinions about how you spend your money, but you can control your response. If certain individuals frequently judge you, try spending less time with them and more time with people who respect your choices or keep their opinions to themselves. When you encounter judgment, respond with empathy. People may criticize your spending because of their own financial stress. Acknowledge their feelings without compromising yours. For example: You could say, “Finances can be stressful. We all have different priorities, and that’s okay.”

Learning: When a financial decision was bad for you, it will hurt. The pain helps you learn. Ask yourself: What trigger can I set to not do that again? Clarify your values, identify the change you need to make, and make it. Spending isn’t really about the money. It’s about how you feel about the money. People want to tell you how they feel. They assume you want to make them feel good and aligning your expectations to theirs does that. But, trying to meet others’ expectations is not only a recipe for frustration, it can also lead to financial decisions that aren’t in your best interest. Prioritize your own goals and you’ll find more peace in your choices, regardless of what others think. For example: When a teammate comments on your spending habits, you could say, “I prefer to focus on what’s best for me rather than comparing myself with others.”

How do you handle being judged for your spending habits? Please share in the comments.

High Pay Can Cost You

Welcome to the final article in our Toxic Traits series. In part one,
we asked what’s up with the toxicity-in-the-workplace trend. Part two
suggested what managers can do to mitigate its effects. Part three
explored how individual contributors can make workplaces less toxic. Now let’s talk about your wallet.

The allure of a high-paying job can be irresistible. You can have financial security. You can afford luxuries. You can climb up a rung or three on the social-status ladder. But those perks come with a hidden cost when the workplace environment is toxic.

The Pros

Stability: You can pay off debt, build savings, invest in property, and afford quality healthcare and education for both you and your family.

Comfort: You can upgrade your housing, travel more often, and participate in expensive hobbies.

Opportunities: Working in a high-stakes, high-paying environment offers valuable experience and visibility to leadership. These roles can be stepping stones to even more lucrative and prestigious positions within the organization.

The Cons

Stress: The constant negativity of a hostile work environment eventually destroys your productivity. Chronic stress leads to burnout, depression, and anxiety disorders. Stress also manifests physically through headaches, high blood pressure, diabetes, and/or a weakened immune system.

Balance: Toxic workplaces often demand excessive hours and emotional investment that erode the boundaries between your work and personal life. This imbalance strains relationships and reduces time available for self-care and fun.

Ethics: Working in a toxic environment may require you to compromise your principles. This creates internal conflict over moral dilemmas and reduces your self-esteem and professional integrity.

Only you can decide whether the financial benefits of a high-paying job in a toxic workplace are worth the negative impact. Some questions to ask yourself: How far will your resilience stretch? How long will these circumstances last? How patient will your support systems be?

Your Choice

The financial security and career advancement may outweigh the negative aspects, especially if you have effective coping mechanisms and strong external support. But do not underestimate the toll a toxic work environment takes on your mental and physical health, relationships, and overall happiness. The tipping point where toxicity outweighs financial compensation differs for everyone. Here are a few clues the job is no longer worth it.

Health: When your physical or mental health problems become obvious and unmanageable. When you always feel physically exhausted, mentally detached, and/or emotionally numb.

Relationships: When your personal relationships suffer significantly due to your work-related stress and unavailability.

Happiness: When the job requires compromising your values to the point where it affects your self-respect, you lose your sense of purpose, or the grind is relentless.

When You Can’t Leave Yet

If you depend on this job to pay your bills and can’t quit yet, recognize the signs of intolerable toxicity, evaluate your circumstances, and be proactive in mitigating its negative impacts.

Boundaries: Define, communicate, and maintain boundaries between your work life and your personal life to protect your time and relationships.

Cope: Lean on friends, family, and/or professional counselors to help you maintain both your mental and physical health. Relieve your stress through exercise, meditation, hobbies, or whatever self-care looks like for you.

Strategize: Invest in certifications that will open doors to better opportunities elsewhere. Attend networking events and connect with people who work in organizations you’d like to work for. Hire a career coach to help you prepare for your future. It’s good to have hope.

Have you ever worked in a toxic workplace because the job paid well? Was the compensation worth it? Please share in the comments.

Assess Your Success

This is the final installment in the series, Stop and Think. For the last three weeks we’ve talked about reflecting on how you spent your time, energy, and attention on your work for the first half of 2024. This week, let’s stop and think about the money you make.

Your Decision

Society uses money to gauge success. But that does not mean you have to. If you make hundreds of thousands of dollars a year, but have no time or energy to spend them the way you want, is that really success? Success is not actually about the money. It’s how you feel about the money. If making a lot of money is important to you, ask yourself why. What does the money you want buy you?

Our culture trains us to believe the more money you have the more options you have. While that can be true, it is also true that with more money comes more expectations. You have to figure out the balance between how much money is enough to reach your goals and what you’re willing to do to get it.

Think about that in relation to reflecting on your goals half way through 2024. Has your definition of success changed since January? Maybe at the start of the year you were focused on financial gains, but now a flexible schedule is more important to you. Update your definition of success and adjust both your goals and systems accordingly. Here are some questions to help you rethink your definition of success.

Is management happy with your job performance?
Is your family happy with your work-life integration?
If you have given your best effort for the last six months, what are three things you are most happy about accomplishing?
Are your original goals still relevant? For example: Did you discover a new skill in the last sixth months and you want to get certified in it? If so, then it’s time to rethink your original goals.

Your Climb

Success is more like climbing a tree than like climbing a ladder. You may need to move laterally, switching branches, before you can climb higher. For example, you may have to change jobs or acquire new capabilities. Moving in reverse or taking a different branch of the tree can often lead to your desired destination more effectively than sticking to your original goal. It may also reveal a new destination you were not aware of that you want more. For example: Is your definition of success more money or is it more control of your lifestyle? Do you have rare and in-demand skills that would allow you to work the hours that you dictate? Time is more valuable than money. You can always make more money. You cannot make more time.

You do not have to wait six months to reflect on your progress, alignment, systems, or success. If you normalize rethinking when new information warrants it and embrace the change then your self-awareness will grow. Periodic realignment keeps you motivated and helps you pursue what type of success truly matters to you.

How do you define success? Please share in the comments.

Money Wise

Your plan for keeping your children busy all summer is now in effect. Camps, your library’s summer reading program, maybe a summer job, will keep them occupied and gathering new input they can use during the next school year. Have you factored teaching them how to manage money into your summer plans?

The Sooner The Better

You may feeI they are too young to learn about budgeting, but spending and saving money is not really about money. It’s about how you feel about money. Even if your children’s school gave them an age-appropriate course on money management this year, don’t rely on it to teach them financial literacy. You want to be your children’s guide to managing both their emotions and expectations. By age three, most children recognize money. Between ages five and seven they understand the concept of working to get it, so start teaching money management skills from an early age and prepare to make money an ongoing conversation.

Practice, Practice, Practice

As your children mature, their critical thinking around money should too. For example, give your kindergartner a specific chore (e.g., putting their toys away) and a weekly allowance for it. Help your second-grader create a simple budget by labeling three envelopes: Spend, Save, Taxes. If they receive $10 every two weeks, then $8 goes to Spend, $1 goes to Save, and $1 goes to Taxes. You will have plenty of conversations about those envelopes over the course of the summer. You can introduce concepts like opportunity cost and delayed gratification. You can talk about the importance of thoughtful planning, disciplined spending habits and why you pay taxes. Let your middle-schooler eavesdrop on family finance discussions like, will the household budget allow you to go out to eat tonight? Buy a new car next month? Pay for extracurricular school activities next year? By the time you have a high-school freshman, it’s time to make borrowing money part of the conversation.

Give Them Some Credit

While it can be a powerful tool for achieving financial goals, borrowing requires being a bit of a futurist. You have to teach your teen to weigh the benefits of debt against its risks while simultaneously helping them avoid potential pitfalls. You can do this by teaching them how to manage credit cards. Your bank/credit union/financial institution can add a card for them to your account. You can set a credit limit, monitor their spending, and set their payment schedule. Now you have four years to help them practice determining how much debt is realistically sustainable given their income, expenses, and long-term goals. You expose them to concepts like interest rates and how much it really costs them when they don’t pay off their balance every month. The closer they get to graduating, the more concepts you can introduce. For example, what a FICO score is and how to keep an eye on it. If college is a goal, managing credit card debt gives your children practice for managing student loans. This is also a good time for your family to periodically evaluate your financial strategies, analyze current priorities, and question assumptions. For example, is going to college your child’s goal? What are the alternatives? Gap year? Internship? Trade apprenticeship? Full-time employment? In light of your financial situation, what makes the most sense? This type of discussion is a good example of when managing money is really about managing emotions and expectations rather than finances.

How do you teach your children to manage money? Please share in the comments.