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Teaching Children About Money

Posted in Financial Tips

Everyday Teachable Moments

In many families, parents do not know where to start when it comes to teaching children about financial responsibility. However, this topic does not need to be intimidating - you can help your children and grandchildren learn financial lessons that will last a lifetime by looking for teachable moments in your daily life. Here are some examples of teachable moments to help you get started:

When depositing your paycheck or verifying direct deposit via online statements, talk to your kids about:

  • How your paycheck is deposited into your checking or savings account. If you use direct deposit, explain how this electronic method is convenient and secure.
  • Budgeting some of your paycheck to pay for things like the housing, food and clothing.
  • Saving a portion of each paycheck for emergencies and to build a nest egg for future expenses like college tuition and retirement.

When grocery shopping, talk to your kids about:

  • The difference between a need and a want — milk is a need, candy is a want.
  • Using coupons, buying in bulk, and other ways that you save money on groceries, etc.

When using your credit card, talk to your kids about:

  • Paying for these purchases each month when the credit card statement comes in the mail.
  • How using a credit card is like taking out a small loan for each purchase.

When giving children an allowance, talk to your kids about:

  • Setting up a budget. For example, decide how much to save, spend or share with others in need or a cause that you care about.
  • Setting a financial goal, such as buying a new bike, and figuring out how to achieve it.

When you pay bills each month, talk to your kids about:

  • How a check or online payment is taking money out of your account at the bank to pay the bill.
  • Keeping track of the checks you’ve written and the online payments you’ve set up in the check register so that you don’t spend more than you have in your account.

When using an ATM or paying for a purchase with your debit card, talk to your kids about:

  • How the money is coming from your account at the bank.
  • Recording withdrawals and debit card purchases in your check register so that you don’t overdraw your account.

Early Money Management Habits for Kids

There are many events in children’s lives when good money management skills can be fostered. By constant repetition, these skills will develop into life-long habits. Consider a few opportunities to reinforce messages:

Piggy Banks — The First Lesson in Saving
The arrival of a child’s first piggy bank teaches at an early age that pennies, dimes and nickels can add up to dollars pretty quickly.

Weekly Allowance — Spend Some & Save Some
Help children see the value of spending a little now and putting some aside to spend later. Giving some to a worthy cause can also be suggested. If you provide your children with an allowance, you can start them off right by requiring them to budget and save a portion of it.

That First Job — Time to Open a Bank Account!
Ask a young person what he or she will do with the income from their first job, such as babysitting or doing yard work for the neighbors. Encourage them to think about their spending and savings options. Many teenagers today make enough money to open their own checking account or a joint one with their parents.

For account options, consider joining the Kids Club at Bank First. Our Kids Club account will not only make saving fun, but it will also help parents teach their children about money and the importance of saving. With free services like online and mobile banking, young savers can watch their balances grow! For teens, consider Bank First’s Student’s First account. This is the perfect account for students ages 16 to 24. Your child can learn how to make deposits with their smartphone, access online bill pay, and learn how to transfer money to family and friends for rent, concert tickets, etc.!

The Big Things They Want — What it Takes to Buy Them
Do they want the latest game console or MP3 player? Or maybe it’s a special school trip or even a car someday. Saving for these takes time. Now’s the time to talk about being disciplined to save for what we want and being realistic about our needs and wants.

Protect Your Financial Information — Don’t Give Away Account Information
Tell children that bank account numbers are “secret” numbers and should never be given away. Never “mail” letters by putting them into your own mailbox for the postman to pick up. Sometimes thieves look for secret bank numbers in outgoing mail. Tear up or shred any papers with your secret bank numbers, rather than throwing them in the trash. Tell kids that believe it or not, thieves will even go through your garbage to steal your financial secrets.

For a fun learning experience, take your child to one of Bank First’s Shred Days. Here, they can learn about shredding important documents and see the process in action!

© 2014 American Bankers Association, 1120 Connecticut Ave NW, Washington, DC 20036. All rights reserved.

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