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Smart Tips And Tricks For Teaching Kids Good Financial Habits
As kids across the country are gearing up to head back to school, parents and caregivers are looking forward to their children learning new lessons and skills, full of fun and education. While school is a primary place for students to learn, some of the most impactful lessons actually start at home — particularly about money and developing healthy financial habits early.
“A good understanding of how to be responsible with money starts with what kids see and learn at home,” says Radhika Duggal, CMO of Community & Business Development at Chase. “It’s important to bring your kids into conversations about money and include them in family financial decisions to help them understand how to budget, save and spend responsibly. What we do as parents today can help position them to understand money in the future.”
Duggal shares some simple things you can do today to help with the money talk:
Start with the basics
Have an open discussion as a family about how money is earned and spent. Discuss “needs” versus “wants” and how to balance both while also saving money for the future. Kids may realize that it costs money to buy groceries from the store, but may not understand other monthly household expenses, like water, WiFi or electricity.
Build a budget
Discuss budgeting basics in age-appropriate language and get kids involved. For younger kids, bring them into the conversation when making a grocery list and show how you plan, budget and buy ingredients for a family meal. For tweens and teens, discuss how to plan and budget for their summer activities with friends. Show them why it’s important to revisit your family’s budget as priorities or expenses may have changed.
Set goals and make a plan
Share some of your financial goals with your children, whether it’s something in the near future like saving for a new TV or a longer-term goal like saving for 529 plans. Then, help kids make a list of things they would like to save for— an item or experience — and create a plan for achieving those goals. Beyond individual goals, families can also work together to set and achieve common financial goals, like saving for a big vacation or college.
Consider kid-friendly financial tools
Consider helping your kids learn through real financial tools — like a debit card, bank account or investment account. Chase offers Chase First Banking — a debit card for kids ages 6 to 17 with no Monthly Service Fee that gives parents the control they want and kids the freedom they need to learn. Parents can set spending limits, track their child’s purchases and even help them with savings goals. Tools like First Banking offer set parameters to give parents peace of mind, while helping your child learn how to be responsible with their money. For more information go to www.chase.com/firstbanking.
Create a system for earning money
Help kids understand the relationship between work and reward by setting up a system for them to earn money. Every family is different in what works best for them, but some common approaches are weekly allowances for chores. Other ways to earn money include setting up a side job like a lemonade stand, mowing lawns or babysitting in the neighborhood. Because the child’s Chase First Banking account is connected to the adult’s checking account, transferring money earned is easy through the app.
Be a role model
Children absorb what you say and do. Kids will often mimic your financial habits, so remember you are a role model. Keep financial topics a regular part of family conversations and ensure your kids feel comfortable coming to you with any money questions they have, no matter how big or small. For example, if you are eligible for the current Child Tax Credit — which Chase and non-Chase customers can cash at Chase with no fee — consider discussing with kids where the money came from and how you wish to spend/save it.
A version of this story originally appeared in The Dallas Weekly.