Teaching Kids About Money at Every Age
It’s never too early for children to start learning about money, and as a parent, your kids are going to learn from you first. You don’t have to do it alone, though. We’ll show you a few ways to teach your kids healthy financial habits at every age.
Under Age 12
Start their first savings account
Piggy banks or clear savings jars are a great introduction to saving for kids. Once their piggy banks are full, you can take it one step further with their first real savings account. Youth savings accounts introduce children to the banking environment, and open up a way to begin teaching financial literacy. Our Savertooth Savings accounts are designed specifically for our junior members 12 and under.
Let them spend their own money
The things we want cost money, and it’s more effective when you show your children this concept rather than simply telling them. Try letting your kids use their own hard earned dollars to buy something they want. Let’s say your child really wants a specific toy. Take them to withdraw money from their savings account or piggy bank, then help them buy the toy and have them physically hand the cashier their money when checking out. True understanding comes from real life experiences.
Treat allowances like paychecks
It’s common for children to receive allowances. But when allowances are given rather than earned, the concept of working for money can be clouded. Try giving your kids a set list of chores or tasks to complete around the house, and pay them a paycheck when they’re finished. Your kids may complain about chores now, but they’ll thank you later!
Ages 13 to 18
Give them the responsibility of a job
Your teenager is now old enough to get a job – so let them! Teens can start working at age 14, and having a job teaches responsibility, commitment, and time management. There are plenty of options for your child, like working in food service or retail, working a summer job, or working at a grocery store or movie theatre. And for teens that aren’t quite ready for their first big gig, consider helping them find work in babysitting, dog walking, lawn mowing, or even tutoring.
Let them open their first checking account
Once your teenager has a job they’ll need a safe place to deposit their newly earned wages. Opening a checking account and owning a debit card takes money management to the next level. It’s time for your kids to begin managing their own funds in preparation for budgeting as an adult.
When choosing a checking account, look for a free account that doesn’t charge a monthly service fee, like the Kasasa Cash Back checking account. With this account your teen can earn cash back on debit card purchases each month, and will have convenient access to their account with our mobile app and online banking. What teenager doesn’t want to earn a few extra dollars?
Start building their credit, while teaching about credit cards
Your teen will be graduating high school soon. They’ll be a young adult before you know it, and their credit score will start to matter. One of the main factors in determining a credit score is length of credit history, so giving your teen a credit card for emergencies, or adding them as an authorized user to one of your existing accounts, gives them a head start on building credit.
It also gives you an opportunity to teach your child about using credit cards responsibly. A safe practice is teaching them to never charge more than they can pay off within a month. You should also explain how interest and minimum payments work, so that they can avoid credit card debt. These cards can be a great tool, but early education about both the positives and negatives of credit cards can help your child establish strong credit in the future.