Children typically start asking questions about money around age five when they notice adults handling cash or paying for items. Once your child begins to develop a curiosity about money, it’s a great time to start laying the foundation for smart financial habits. Unfortunately, many teens lack basic financial skills, which can lead to trouble with budgeting and saving once they become adults, and can put them at risk of damaging their credit or racking up debt. That’s why it’s so important to help your child develop good money management skills while they’re young.
Here are some fun ways you can teach your child the financial skills they’ll need to succeed:
1. Play interactive financial games. There are many online games for children that teach money management concepts. The Washington State Department of Financial Institutions website offers free online finance games for young children and teenagers. Websites like ABCYa.com also offer financially-focused games such as Money Bingo, Break the Bank, and Dolphin Cash. For a more “old-school” approach, you might consider financial literacy board games such as The Allowance Game, The Game of Life, or Monopoly.
2. Complete worksheets and activities on financial topics. For a more straightforward approach to financial literacy, you might consider printing out some worksheets for your child to complete. BankFive has a Banking Resources for Parents page that features finance-themed coloring sheets for small children and budgeting worksheets for older kids. The Washington State Department of Financial Institutions website has some printable worksheets for elementary students and middle schoolers, and MATHWorksheets4Kids.com offers downloadable worksheets on writing checks, earning interest, and spending below your means.
3. Create real-life scenarios and incentives. Sometimes kids learn best by getting some hands-on experience. Consider giving your children an allowance for completing chores or helping around the house. You can also introduce the concept of a loan by making them write out an IOU if they’re looking to borrow money from you, and then teach them the importance of paying it back. Take them to a store so they can spend birthday money so they can see how prices work, and how they might receive change if they purchase something that’s less than the amount they have.
4. Help them open up their own bank account. Some banks offer savings accounts designed specifically for children. At BankFive for example, the Nickels Savings Account for Kids makes it fun for kids to save. This account is a passbook savings account, meaning the child will receive a physical book where their deposits and withdrawals are recorded. This account also earns interest on balances of $10 or more, so kids can see firsthand how their money can grow. When kids open a Nickels Savings Account, they also receive a stuffed animal of BankFive’s mascot, Nickels the Dog, and they even get a birthday card from Nickels in the mail every year.
5. Teach them how to budget and save. Once your child gets older and has a job, their financial needs will grow. You might consider helping them open a Student Checking account so they can have their paychecks direct deposited, and they can gain practice using a debit card and writing checks. They can use online banking and mobile banking to keep an eye on their available account balance, so they don’t accidentally overdraw their account. You should also urge them to regularly deposit money into a savings account as well, so that they’re not spending everything they make, and instead saving for the future. BankFive has a handy Savings Goals Calculator that they can use to help them save for a specific purpose, and a Budget Calculator that they can use to start understanding how much money they have coming in versus going out each month.
By teaching your child the skills they’ll need to become financially independent, you’ll be setting them up for success. By being comfortable and confident with their spending habits and money management skills they will have a great chance at a bright financial future.
As a community bank serving Massachusetts and Rhode Island, we here at BankFive want to see our customers thrive from the very beginning. Whether you’re looking for financial literacy tips and resources, or looking to set up a bank account for your child or teenager, we can help. Contact us today or visit a BankFive branch near you.