skip to main content
Search Search Investors Icon Investors Careers phone 1-800-318-8997

A mother gives her young daughter a quarter as she teaches her about money.

Teaching kids about money management and the fundamentals of financial responsibility is crucial to their overall growth. By instilling these values in your kids early on, you prepare them to make informed financial decisions and develop smart spending habits throughout their lives.

As we approach National Teach Your Children to Save Day on April 27, it’s an opportune time to explore the essential financial concepts to instill in your kids at every stage of their childhood. This blog from the expert team at Landmark National Bank will provide some tips to follow over your children’s lives, including advice on budgeting for kids, money management for teens, and more.

How To Teach Kids About Money

Understanding how to teach kids about money requires a thoughtful approach. Before we dive into strategies for specific age groups, it’s important you remember the key is to make learning enjoyable and relatable. By guiding them along at a comfortable pace, you can help your kids build a solid relationship with money from a young age.

Early Childhood (Ages 3 to 6)

The path to financial literacy begins in the early years of your child’s life. While it may seem premature, introducing basic concepts during early childhood can help build a solid understanding of money. Start with simple lessons, like how coins and bills have different values. Engage in simple activities like counting change or setting up a pretend store to make learning fun and interactive.

You can also teach your kids the importance of savings through the power of a piggy bank. Let your child pick out a design they like, then encourage them to use it to save a portion of their allowance or gift money to introduce the concept of delayed gratification. Use straightforward language to explain why saving money is important and get them excited about eventually spending it on a big toy or treat.

A young boy puts money from his allowance in his piggy bank.

Elementary School (Ages 6 to 11)

As your children progress into elementary school, take the opportunity to wade deeper into financial education with them. Incorporate an allowance system tied to household chores or other goals. Encourage them to save a portion, spend wisely, and possibly allocate another portion for charitable giving to foster a sense of social responsibility.

Once your kids understand the value of having their own money, introduce the concept of budgeting for kids by creating a basic spending plan. Help your child distinguish between needs and wants, allocating money for smart purchases while leaving room for discretionary spending on fun items.

It can also be wise to consider opening a savings account for your child. Take them to the bank, involve them in the account-opening process, and explain the concept of earning interest on their savings. Use this opportunity to discuss the idea of setting financial goals, whether it be saving for a specific purchase or building up an emergency fund.

Middle School (Ages 12 to 14)

Once they reach their middle school years, your children can grasp more complex financial concepts. Introduce them to the basics of investing by discussing simple investment vehicles like stocks and bonds. Explain the potential risks and rewards associated with different investment options, helping them understand the concept of risk management.

You can also consider involving your child in family financial discussions. Share age-appropriate information about household expenses, bills, and budgeting. This transparency provides insights into the real-world implications of financial decisions and prepares them for independent financial management.

As your kids seek ways to make money, encourage them to develop an entrepreneurial spirit by supporting any small business ideas they may have. Whether it’s a lemonade stand or a pet-sitting service, these ventures instill valuable lessons about earning income, customer service, and managing expenses.

A woman teaches her teenage daughter about how to examine her finances.

High School (Ages 15 to 18)

As your teenagers near adulthood, it becomes crucial to equip them with the skills needed for financial independence. Introduce the concept of credit and debt, explaining the responsible use of credit cards and debit cards along with the potential consequences of accumulating debt. Show them how to check their credit score, and then emphasize the importance of maintaining a good number for future financial endeavors.

Once your kids are ready and as their school schedule permits, encourage them to seek out a part-time job or internship. This will provide teens with hands-on experience in money management, as they’ll have to stay on top of their income, taxes, and workplace expectations. As their paychecks come in, help them manage their direct deposit payments by using mobile banking services and apps.

It’s also vital you introduce the basics of financial planning, including setting short-term and long-term financial goals. Discuss topics like budgeting for college, understanding student loans, and making informed decisions about higher education costs. This knowledge equips them to make informed choices about their financial future as they spread their wings and grow.

Post High School Transition

As your child transitions into adulthood, the lessons learned during their formative years will play a significant role in orienting them toward financial prosperity. Emphasize the importance of continuing to learn and stay informed about evolving financial trends. Encourage them to seek out additional resources to deepen their understanding of more complex financial concepts, such as financial literacy courses or workshops.

Get Professional Advice From Landmark National Bank

Landmark National Bank is here to help as you figure out how to teach your kids about money. We have the tools and resources needed to help you reach your financial goals, including standard services like personal savings accounts and checking accounts. With us on your side, you and your loved ones can attain financial prosperity. Contact Landmark National Bank or locate a bank branch near you to get started today!

Leave a Reply

Your email address will not be published. Required fields are marked *