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Teaching Your Kids About Money Management

Studies show that children tend to mimic their parents' money management habits. If you show them you pay your bills promptly and put aside money for savings, there's a good chance your kids will, too. Below are some tips to help your kids become responsible money managers.

Allowance

  • Start giving your kids a small allowance
  • Allow spending in several budgeting categories (spending, short-term savings, charity)
  • Increase dollar amounts with age

Additionally, look for ways to make your kids comfortable with handling money. For example, have your children figure out the tip at a restaurant or ask them to sort out your grocery coupons and mail-in refund offers.

A Part-Time Job

  • Encourage part-time work for your teenagers who are old enough to work
  • Educate them on important topics such income taxes, wage laws, hourly pay, etc.
  • Make sure the job hours are flexible enough to not interfere with school and other extra-curriculars
  • Guide them in spending and saving their earned money wisely

Savings, Checking and Credit for Kids

  • Help your kids set up a savings account as early as grade school, such as a Holiday Club or Passbook account
  • When they’re older and earning their own money, encourage them to consider a checking account and ATM or debit card. A No Overdraft Checking Account is a good first account. No Overdraft Checking offers the perfect blend between a prepaid card and a traditional checking account. There are no overdraft fees ever with the safety and convenience of a bank. (Note: Children under 18 with a Dollar Bank checking account must have a parent listed on the account as well.)
  • Explain basic investment concepts when your teenagers reach high school
  • By age 18 or 19, educate your kids about the proper use of credit cards and good credit

Teaching your kids about wise money management will pay dividends for years to come.

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