Before you know it, your kids will be out on their own making financial decisions that will affect their lives. Here are tips on how give them a basic education on being financially responsible.
Teach the basics
Teach your kids that budgeting is simply a way to manage the money they have—to pay for what they need. (Or afford the things they want).
Pre-Teen:
- Show them how you stay on budget while grocery shopping. Ask them to help add up the items in your cart. They’ll learn why certain items (like candy or snacks) won’t make it into the cart without going over budget.
Teen:
- By the time your teen reaches high school, he or she knows what things cost. Sit down with them as you pay your monthly bills. This will give them a reality check on how day-to-day money management works.
Create their own budget
Help your children add up any income and expenses and discuss their goals for developing their own budget.
Pre-Teen:
- Whether they receive money from an allowance or family gifts, kids can start learning the value of creating a budget they control.
Teen:
- Show your teen how to create a budget from a part-time job or allowance. It’s never too early for them to save money for a major purchase like a car.
Open a bank account
Once they have money to save, help your child open an account. This is a great time to teach banking basics like interest rates and withdrawal limits.
Pre-Teen:
- Saving: best for learning basic banking and when working toward a goal. Your kids will learn the basics of how interest rates work.
Teen:
- Checking: best for learning day-to-day money management. Teach them how to use debit cards responsibly and how to use tools like online banking.
Track and monitor progress
Once you help your kids create a budget or open an account, sit down and monitor their progress.
Pre-Teen:
- If they have already have an account, show them their balance in online banking so they can see their progress.
Teen:
- Most banks have online banking and a mobile app. Sit down once a month to review their checking and/or savings accounts. Discuss what adjustments need to be made to reach their goals.
By teaching your kids the value of managing their finances now, it will help them grow into money-savvy adults.
Fulton Bank, N.A. Member FDIC.
