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Children and Money

By Debbie RobinsonMarch 13, 2019Financial Planning, Investing

It is never too early to start teaching kids about saving money. Here are some great tips on different ways you can educate children about money and saving.

During the Younger Years

  • Teach them the concept of earning money. When your kids see you paying for groceries or buying something online with a credit card, they probably don’t associate those actions with you going to work each day to earn that money. A credit card is an intangible idea for most young children. Paying your kids to do extra, age-appropriate chores can instill in them that money is earned and doesn’t just magically appear on a small piece of plastic.
  • Practice goal setting. What do your kids really want? A new bike? A new video game? Instead of buying it for them, have your son or daughter save for that special item.
  • Open a savings account with your child. Most banks and credit unions offer savings accounts for children under 18. With a little research, you can find accounts that offer no monthly service fees or minimum opening deposits. There are also many online tools available so your child can track their savings progress and set new goals.


  • Learn to budget. This is the perfect age to understand how to make and follow a budget. Back-to-school shopping, the holidays or spending money on vacation are great times to demonstrate budgeting. For example, give your kids a set amount for new school clothes. They can buy whatever they want; but once the money is gone, it’s gone. Your son or daughter may find that they have to make some hard choices about their purchases, or use their own money to make up the difference if they decide to go over budget.
  • Help kids understand how to spend smarter. Children may not be aware of the many ways there are to make the value of dollar last. For instance, a child who wants a new cell phone may not know that last season’s model is less expensive than the current model. Point out sales or how using coupon codes can help you save money on purchases.
  • Encourage entrepreneurship. Whether it’s watering a neighbor’s plants while they’re on vacation, having a lemonade stand or starting a dog-walking service, pre-teens can learn a lot from coming up with creative ways to make money. Being entrepreneurial may spark a new interest for your child that lasts for years to come.


  • Introduce investing. If your kids have been building up their savings since they were young, now is the time to show them how investing can grow their hard-earned money. There are plenty of online tools available that demonstrate the power of compounding interest, understanding risk, and the importance of asset allocation.
  • Talk to teens about smart credit management. Credit rules our lives. It is relatively easy for older teens and college students to receive multiple credit offers from department stores, their financial institution or other credit issuers. Teach your teen what a FICO score is and how credit usage can impact that score. Another credit management tool is to link your credit card to one for your teen. Monitor spending together and reinforce the importance of paying the balance in full each month to avoid interest charges.
  • Allow your kids to make money mistakes. By experiencing the sting of an overdraft charge or a late fee when they don’t pay a bill on time, they become comfortable asking questions and learning from their financial choices. This will help prepare them to seek guidance in the future when they are faced with much bigger financial decisions.

Of course, the best lessons you can teach your kids about money is through your own actions. Every family handles money differently so there is no one-size-fits-all approach to financial education. By being open about your values and financial philosophies, you can help your kids develop a solid financial foundation to carry into the rest of their adult lives.

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