10 Little Ways to Teach Kids Money Management


According to the University of Cambridge, children as young as seven can understand the basic concepts of money management.A

 

As a parent, one of your responsibilities is to prepare your child for an independent life. There are many lessons for a child to learn before they leave your care and sometimes lessons about personal finance are overlooked.

 

Thankfully, there are small, simple ways that you can teach your child money management skills that will ready them for adulthood. Here are 10 little ways to teach kids, from elementary to high school age, about money management.

 

Money Management for Elementary School Aged Kids

 

Start with a piggy bank

A piggy bank is a fun way to introduce money management to kids. A transparent piggy bank is ideal so the kids can physically see their money grow. You can also use a transparent jar instead. These are both good ways to keep money safe in one place. Encourage your child to save their change and dollars when they receive them. As the money grows, be sure to congratulate them for saving.

 

Teach them to wait

When you are at the store and your child eyes a new toy or outfit that they want, have them wait at least 24 hours before making the purchase Encourage them to think about their choice and decide if it’s really something that they want to spend their money on. Your child will learn about patience and the power of combatting impulse spending.

 

Model the behavior you want from them

It’s going to be harder to teach your child to practice good money habits if you aren’t following them. Our kids are watching us and learning from our behaviors. Reinforce good spending habits by avoiding making impulse buys and walking them through money matters, including buying groceries or visiting ATMs. Your child will feel like they’re being let in on a grown-up secret, and you’ll know you’re imparting important life skills in turn.

 

Show them how much things cost

Telling kids “that toy costs $10, which is expensive” may not be enough. Rather than telling your children, show them by bringing their piggy banks to the store. If they want to buy something, show them how much of their money it will take to make the purchase.

 

Start them on an allowance that’s earned

A regular allowance is a good opportunity to teach kids some money management skills that they will use throughout life. Determine an amount they may earn on a regular basis, ideally weekly. The key is that they must earn the money. Decide what chores they may do around the house to earn the money. Some ideas may include cleaning their room, putting away laundry, taking out the garbage, etc. When they see that hard work pays off, that habit is more likely to stick with them in adulthood.

 

Money Management for High School Aged Kids

 

Open a bank account

A savings account or student checking account will give them a place to store their money. If they start working a part-time job or have a babysitting gig, having a bank account will help them track their income. Many accounts have a mobile app that makes it easy to see how much money they have. You may also be able to view their account and set parental controls.

 

Many banks also offer a feature where you can create a savings goal that can be tracked or have a certain amount of a paycheck automatically transferred into a savings account. Have your teen download the app and show them how to see their transactions, deposit a check, etc. Also encourage them to set a savings goal.

 

Encourage them to give

Teaching your teens to donate will also provide them with both a financial lesson and a lesson in social responsibility. It’s not about the dollar amount that they give as much as it is about being appreciative of what they have. Let them choose a charitable organization that interests them. Talk to them about why they think that their chosen cause is important.

 

You can use a Flare Account Charity Debit Card1 to support the charity associated with the card4. Choose debit cards that donate to National Breast Cancer Foundation5, Homes for Our Troops6, Save the Children7, and The Humane Society of the United States.8

 

Create a budget with them

This is especially useful if your teen is working. As mentioned before, some mobile banking apps have a budgeting feature which can be used for this. Otherwise, there are plenty of apps available for free that include budgeting features. You can also have your teen create and keep track of a budget the old-fashioned way – using pen and paper.

 

Show them your household finances

Even as they grow closer to adulthood, few teens know much about flow of funds within their households. Show them how much you are bringing in each month from your paychecks. Then subtract your monthly bills (cell phone, internet, rent/mortgage, etc.) and weekly/daily costs (gas, groceries, tolls, etc.) and then show them what is left over. Show them what you plan to spend this residual income on and what you plan to save. This is a helpful hands-on experience that puts money management into real-world practice.

 

Help them set savings goals

Talk to them about how saving is an important tool in managing money. Your teen should set a goal to have a percentage of their income go towards savings. Start them off with a small, attainable goal like saving $50. Once they reach that goal, encourage them to go up one more level, then another. Explain why it is important to try to have a “rainy day” fund and how the money that they save now can help them overcome unexpected financial issues later.

 

Are you also wondering if it’s time to start saving money for your child’s education? Read our blog post “When (and How) to Save for College for Your Child” to learn more.

Discover More


Tips for Valentine’s Day Gifts on a Budget


Budgeting for Valentine’s Day can be challenging if you limit yourself to buying expensive jewelry and fancy boxes of chocolate. But just because a gift cost...

3 Quick Tips for Saving Money on a Tight Budget


If it feels like you’re living paycheck to paycheck, saving money may seem like a luxury you can’t afford. However, whether you’re breaking even or strugglin...

Sources:

A. https://mascdn.azureedge.net/cms/the-money-advice-service-habit-formation-and-learning-in-young-children-may2013.pdf

 

Disclaimers:

1. IMPORTANT INFORMATION FOR OPENING A NEW DEPOSIT ACCOUNT: To help the federal government fight the funding of terrorism and money laundering activities, the USA PATRIOT Act requires us to obtain, verify, and record information that identifies each person who opens an Account. WHAT THIS MEANS FOR YOU: When you open an Account, we will ask for your name, street address, date of birth, and government ID number. We may also ask to see a copy of your driver’s license or other documents at any time. All Accounts are opened subject to our ability to verify your identity by requiring acceptable types of identification. We may validate the information you provide to us to ensure we have a reasonable belief of your identity. If we are not able to verify your identity to our satisfaction, we will not open your Account or we may close the Account if it was previously funded. Your Account is subject to fraud prevention restrictions at any time, with or without notice.

2. The optional Savings Account linked to your Flare Account is made available to Accountholders through MetaBank, National Association, Member FDIC. To open a Savings Account, consent to receive communications from us in electronic form is required. Interest is calculated on the Average Daily Balance(s) of the Savings Account and is paid quarterly.

• If the Average Daily Balance is $2,000.00 or less, the interest rate paid on the entire balance will be 5.87% with an annual percentage yield (APY) of 6.00%.

• If the Average Daily Balance is more than $2,000.00, the interest rate paid on the portion of the Average Daily Balance which exceeds $2,000.00 will be 0.49% with an APY of 0.50%, and the interest paid on the portion of the Average Daily Balance which is $2,000.00 or less will be 5.87%. The APY for this tier will range from 6.00% to 0.60%, depending on the balance in the Account.

The interest rates and APYs of each tier may change. The APYs were accurate as of 1/1/2022. No minimum balance is required to open Savings Account or obtain the yield(s). However, you must receive direct deposit(s) totaling at least $500 within one (1) calendar month to be eligible to open a Savings Account. Savings Account funds are withdrawn through the Flare Account (maximum 6 such transfers per calendar month) and transaction fees could reduce the interest earned on the Savings Account. Funds on deposit are FDIC-insured through MetaBank, National Association, Member FDIC. For purposes of FDIC coverage limit, all funds held on deposit by the accountholder at MetaBank, National Association, will be aggregated up to the coverage limit, currently $250,000.00.

3. No charge for this service, but your wireless carrier may charge for messages or data.

4. Populus Financial Group donates $0.05 for each $100.00 in purchase transactions (net of refunds and chargebacks) made with a debit card branded with your chosen charity: Home for Our Troops, Inc., Humane Society of the United States, National Breast Cancer Foundation, and Save the Children Federation, Inc..  Populus will donate to each of Home for Our Troops, Inc. and Save the Children Federation, Inc. up to $150,000 per year, after taking into account donations generated through Flare Account transactions and other debit card programs associated with Populus.  Populus and Netspend will donate to National Breast Cancer Foundation, up to $350,000 per year, after taking into account donations generated through Flare Account transactions and other debit card programs associated with Populus.  Each of the foregoing beneficiaries is a 501(c)(3) corporation. MetaBank®, National Association, Netspend®, and Visa® do not endorse or sponsor these offers.

5. ACE Cash Express and Netspend donate a percentage of every purchase transaction made with the Pink ACE Flare Account by MetaBank Visa Debit Card  or Pink ACE Elite Visa Prepaid Debit Card (up to $350,000 per year) to the National Breast Cancer Foundation, a 501(c)(3) organization.

6. Populus Financial Group donates $0.05 for each $100.00 in purchase transactions (net of refunds and chargebacks) made with a Home For our Troops branded debit card associated with an ACE Flare Account by MetaBank (up to $150,000 per year in the aggregate) to the Home For Our Troops, Inc, a 501(c)(3) organization. MetaBank, Netspend, Visa do not endorse or sponsor this offer.

7. Populus Financial Group donates $0.05 for each $100.00 in purchase transactions (net of refunds and chargebacks) made with a Save The Children branded debit card associated with an ACE Flare Account by MetaBank (up to $150,000 per year in the aggregate) to the Save The Children Federation, Inc, a 501(c)(3) organization. MetaBank, Netspend, Visa do not endorse or sponsor this offer.

8. Populus Financial Group donates $0.05 for each $100.00 in debit card purchase transactions (net of refunds and chargebacks) made with a Humane Society of the United States branded debit card associated with an ACE Flare Account by MetaBank to the Humane Society of the United States, Inc, a 501(c)(3) organization. MetaBank, Netspend, Visa do not endorse or sponsor this offer.

 

The ACE Flare™ Account is a deposit account established by MetaBank®, National Association, Member FDIC. Netspend is a service provider to MetaBank, N.A. Certain products and services may be licensed under U.S. Patent Nos. 6,000,608 and 6,189,787.

 

© 2022 Netspend Corporation. All rights reserved worldwide. Netspend is federally registered U.S. service marks of Netspend Corporation. All other trademarks and service marks belong to their owners.

The Flare Account® is a deposit account established by Pathward, National Association, Member FDIC. Netspend is a service provider to Pathward, N.A. Certain products and services may be licensed under U.S. Patent Nos. 6,000,608 and 6,189,787.