Teaching your Children about Money
All parents want their children to grow up to be self-sufficient and successful. Teaching them how to manage their money is an important part of their transition to independence. No matter their age, you can use day-to-day opportunities to educate them about successful money management.
::Five and Under::
- Open a savings account and make regular deposits.
- Set a savings goal as a family and have your children help you gather and count loose change to save for that goal.
- Make your children choose. If they express an interest in more than one item or activity, like a toy and ice cream, have them choose one and explain why they can’t have both.
::Six to 10::
- Consider giving an allowance. Start shifting small spending decisions to your children.
- Use every day financial transactions as teaching tools. If you swipe your debit card to pay at the grocery store, explain what’s happening behind the scenes between the bank and the store.
- Don’t buy items on impulse. If your children want a particular item, encourage them to save their allowance or birthday money to purchase it.
::11 to 14::
- Start talking about earning income and possible career interests your children might have. Explain to them that the more education they receive, the higher earning potential they’ll have.
- Shift more spending decisions their way. If you plan to spend $200 on back to school items, let them be in charge of getting everything on the list while staying under budget. If they decide to buy $80 jeans instead of a new backpack, don’t jump in and save the day when their old one breaks. Teach them to deal with the consequences of their choices.
- Involve your children in family meetings to talk about household expenses and savings goals. Discuss your family goals and ways to reach them together.
::15 to 18::
- Encourage your child to get a job to help pay school-related expenses and save for college.
- Consider adding your child to your credit card account, or get him a prepaid credit card. Teach him about properly using credit and understanding all the terms and fees associated with using credit.
- Teach your children about investing for the future. Explore online websites and games to show your children how to invest wisely, like the Stock Market Game or StockTrak.
