7 money Lessons to Teach Your Kids
School is back in session and your kids will come home with endless bits of information they learn each day. They’ll burst in through the front door asking questions about history, showing off something they painted in art class and rattling off words they learned in a foreign language class. But not all of their assignments are just for them. It may be time for you to start teaching them about money. If you’re feeling stuck, we’ve got a few ideas on how you can teach your kids about money and help them form good financial habits.
1. Open a savings account for your kid(s)
You may have done this before your child was even born, but introducing your child to a savings account is a great opportunity to show them how to save money. Whether you’re physically visiting a branch or using automatic transfers through Online and Mobile Banking, show them how often and how much money is going into their account each month. If your child is a little older, a savings account is a chance to teach them about compounding interest. The longer you leave your money in a savings account or certificate account, the more it earns each month in dividends.
2. Use physical money whenever possible
In the era of mobile pay, credit cards and instant checkout with online shopping, there are fewer opportunities to have your kids count out change or see you use cash. When your kids are starting to learn about money in school, create opportunities for your child to receive or spend physical money. You could start by giving them a weekly allowance in exchange for doing chores around the house. Then at the end of the month, they can spend some of their allowance on things they want and put the rest into savings. When you’re at the store, point out the price of an item to your child and ask them if they can afford it and how much money they’ll have leftover after they buy it. If your child chooses to buy an item, have them count out the amount in cash on their own and offer help when they’re stuck.
Don’t forget about the good ‘ol piggy bank, either! If your child receives change in coins, have them put it into a piggy bank. Then after a few months, have them count out what they’ve saved, and they can either spend it on a small item or put it into their savings.
3. Let them in on your family budget
You may be tempted to keep your kids in the dark over your family’s financial status, but introducing your kids to the household budget is a great way for them to start understanding where your money is coming from and going. If you’re nervous about your child sharing your family’s financial status, you can introduce them to smaller ticket items, like your weekly grocery budget. If you’ve budgeted for spending $200 a week on groceries, have your child keep track of your budget on a calculator as you add items to the cart. This is a chance to teach them about buying name brand vs. generic items too!
4. Teach them the fun of bargain hunting
Everyone loves a good bargain. Introduce your child to the joys of finding amazing deals on everyday essentials to large items like appliances, furniture and even cars. As thrift stores and resale shops have grown in popularity, many people have turned to second-hand clothing due to it being a fraction of its original cost as well as being an environmentally friendly choice. Teach your child to take advantage of season-end sales and to buy items in bulk that they know they’ll go through regularly. If you introduce your child to good shopping tips at an early age, they’ll be more likely to adopt those when they start making and spending money of their own.
5. Emphasize the difference between needs vs. wants
As kids get closer to their teen years, they may be feeling like they need to keep up with the clothes their friends are wearing, the gadgets their classmates are using and the overall appearance they want to put forth. While this can be difficult to navigate, this is a great opportunity to teach your child the difference between needs vs. wants. Yes, they need proper clothing, but they want the name brand clothing all of their friends are wearing. Your child may need a laptop for school, but they want the razor thin, rose gold laptop they saw an influencer using on their vlog. It’s easy to get caught up in buying name brand items, and in some cases, those name brands truly are the best option, but there are many instances where you can buy a lesser known brand that is a higher quality option for a significantly lower price. Look online for expert reviews and ratings.
6. Introduce them to credit cards
Credit cards can be a wonderful financial tool when used properly. They can help you build credit, afford big-ticket items sooner and can even kick back some nice rewards or cash back for your purchases. However, it is important to teach your child that credit cards aren’t just free money to go wild with, and that they do have to pay their balance each month. For your high school or college student, they can open our Student Rewards Visa® where they’ll earn points on purchases and for getting good grades!
7. Guide them on how to handle their own finances
While you can’t control your kids’ finances after they turn 18, you can provide advice and support as they begin their journey into financial independence. Whether it’s encouraging them to save a certain percentage of each paycheck, helping them navigate different investment options or simply being a source of guidance, you ultimately have to leave their financial decisions up to them. At 18, they can have their own checking account and debt card, so they can start putting into practice all they’ve learned.
Introducing your child to money and good financial habits may seem daunting. By creating opportunities for your child to interact with money early, giving them insight to your family budget and teaching them how to save and spend their own money, you can help your child develop financial skills that will last them a lifetime.