Money Talks: How to Teach Your Kids About Money

With the start of the new school year quickly approaching, you may be thinking a lot about your child’s education. Part of that should include their financial education. You may think they’re too young to learn about money, but that is far from the truth. In fact, your child may already have their own ideas about money and how to manage it.

Research from the University of Michigan shows that children begin to form attitudes about money between the ages of 5 and 10. This is why it’s essential to start teaching them good financial habits as early as possible. To help you get started, the personal bankers at Citizens Bank in Nashville, TN, have compiled a list of financial literacy tips for kids. 

Six Tips for Teaching Your Kids About Money

While some schools do offer classes in financial literacy for students, this type of education often begins at home. Below, we highlight some tips you can use to teach your child about money and how to manage it. 

1. Lead by Example

Children often mimic their parents’ behaviors and attitudes, including those that involve money. Show your children how you manage your money. To do this, you can involve them in making a budget or setting a savings goal for a family vacation or another big purchase. This may even motivate you to improve your own financial habits in order to set a better example for your children. 

2. Talk About It

They say that you shouldn’t talk about money, but that is false. By having open, honest, and age-appropriate conversations about money with your children, you are helping them to learn about it in a safe, nonjudgmental setting. While you don’t have to share everything about your financial situation with them, you can encourage them to ask you questions about and discuss financial topics.

3. Create a Budget

Creating a budget for the household can help you see where your income goes each month and what your expenses are. It can also be a valuable tool in teaching your kids about money management. You have the opportunity to explain to them the difference between wants and needs by showing them how you prioritize your spending on various items in the household.

For example, while your child may want a new toy, you know that they need new clothing for school. Under that circumstance, you choose to prioritize spending money on the clothing instead of the toy. The clothing is part of the budget for this month, but the toy is not. Using this example, which is relevant to the child, can help them understand this concept better.

4. Give Them an Allowance

Your child needs to know that their money comes from somewhere. To do this, you can give them an allowance in exchange for doing chores around the house. This way, children learn the importance of working for their money. They also will then have their own money to save or spend as they wish. 

5. Open a Bank Account

You may think your child is too young for a bank account, but that’s not true. Many banks, including Citizens Bank, offer youth accounts. This account can be used as a savings account for your child’s future education or as a tool to teach them to manage the money they earn from their allowance or a part-time job. Your child will also be building a banking history that will benefit them in adulthood by owning this account. 

6. Build Their Credit

While a young person can’t get a credit card on their own until the age of 18, they can be added to a parent’s card as an authorized user before then. This allows them to practice using credit to make purchases, so they have good habits once they’re able to get their own credit card. Also, your child will begin to build a credit score that will help them access loans to purchase a car or home in the future.

Start Your Child’s Financial Education with Citizens Bank

If you want to give your child a head start financially, Citizens Bank offers a variety of tools to help you do that, including student credit cards and youth checking accounts. Our personal bankers will support you in educating your child about money. To get started, contact us online, call us at (615) 327-9787, or visit one of our branches in Nashville or Memphis.

Financial Literacy for Kids in Tennessee at Citizens Bank

At Citizens Bank, we support the youth in the communities we serve across the state of Tennessee. That’s why we offer tools to help them learn how to manage money, like student credit cards and youth bank accounts. To learn more, contact us online, call us at (615) 327-9787, or visit one of our branches in Nashville or Memphis.