Tips for your talks

Most kids are interested in money and want the rewards of having money management skills. Here are teaching tips you can use to help them learn.

Make it a (daily) conversation

Engage your kids in age-appropriate conversations about money. Include your kids in your family’s shopping. Share your thoughts with them about how you make your daily spending and saving decisions. Explain your money management strategies to your children, whether it’s saving for a family vacation or borrowing against your home equity to remodel the kitchen. They’ll also benefit from hearing about your past money mistakes and what you learned from them. Let your kids know they can always turn to you for financial information and advice.

Start young

A father talking to his son.As soon as your children can count, you can introduce them to money — dollars and cents. When they’re old enough to shop with you, you can introduce them to the ideas of spending, saving, and how money is used to store, measure, and exchange value.

Discuss the fundamentals

Once kids understand the idea of money, introduce them to basic concepts about how to use money wisely. The Hands on Banking program offers money management education designed for students from 4th grade through college.

Encourage your kids to:

  • Set goals and save for them
  • Make money grow with interest
  • Recognize needs vs. wants — and make tradeoffs
  • Be a smart shopper
  • Keep good records

Let kids make decisions

Giving kids an allowance provides them — on a small, manageable scale — to make their own decisions and their own mistakes — and live with the consequences. Consider an allowance in an amount sufficient to cover essentials and discretionary items. This approach will help the child recognize the difference between needs and wants and set spending priorities. Help your child to create a personal budget and map out a spending plan. Encourage your children to routinely save part of the allowance they receive.

About jobs and pay

Having a part-time job can be a good way for young people to learn more about earning money and how to manage it. However, be sure that school remains their top priority.

Start slowly with credit cards

Credit cards can provide financial flexibility and convenience, but many young adults get in trouble with credit card debt. One option to consider is getting a low-limit credit card for your teens while still in high school. You can teach them how to manage a credit card account, including how to save receipts, check their monthly statements, and charge only what they can afford to pay off completely each month. By learning to be responsible with credit early, your children may be less likely to have debt problems in the future.

Teach a commitment to charity

Encourage your kids to make a habit of giving to charitable causes. Ask them to consider what causes they care about personally and how they would like to make a difference in the world around them. Save solicitations you receive in the mail and ask your kids to help decide where your family should make donations. Also, encourage your kids to volunteer and consider volunteering with them. Volunteering can be a powerful experience for both parents and kids in terms of recognizing community needs and the benefits of giving back.

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