Good Money Habits for Children

This article is from Thrivent Financial for Lutherans.  You will find excellent resources for financial education and stewardship at their website: www.thrivent.com

Give Your Kids the Gift of Good Money Habits

Kids these days. They’re constantly bombarded with information from all directions on every topic imaginable – except money.

In fact, basic understanding among teens of practical financial tools like bank accounts and credit cards continues to drop. The 2011 Charles Schwab Teens & Money Survey reveals that fewer teens today know how to check the accuracy of a bank statement or how credit card interest and fees work than in 2007 when the survey was previously conducted.

Who is responsible for teaching kids money basics?

More than half of parents (54%) say they need to do more to teach their children about money.1 But teens report their parents talk more about cleaning their rooms than smart money management.2

Tips to Talk about Money

The key with kids is find some lessons that work and then repeat them until they sink in. Money skills are learned over time, and the best lessons are taught by what you do, rather than what you say.

  • Here’s a fun activity to try when you’re watching TV together as a family. Mute the sound during commercials and take turns creating your own “voiceovers” to go along with the images on the screen. It’s fun to see that what is said on ads hardly ever corresponds to what is shown. It may spark some conversations about wants vs. needs with your kids, which could lead to some money lessons along the way.
  • Clipping coupons is an easy, money-saving activity for families. Not only do little kids love to use scissors, but since store receipts often itemize how much you saved with coupons, you can readily show your kids the savings.
  • Remember cash? With credit cards dominating our wallets, kids simply are not ‘in touch’ with money. Help your kids see what money is by showing them coins and dollars and talking about their worth. Help them understand what money does by using cash for your purchases whenever possible.
  • Brainstorm a short-term goal the family can reach together, such as saving change in a jar and donating it to charity or on a family fun night. It’s smart to write down your goal(s) to help keep each other accountable.
  • Demonstrate the idea of ‘interest earned’ by adding a small amount to what your kids save. Or match the amount they save to double their effort. Better yet, open a savings account for your child, either online or in person at a bank, and make the effort to talk about the value of saving over time.
  • Try this when shopping with your older kids. When they want to buy something now, ask them to ‘Stop, think and choose.’ Stop to consider whether they want or need it, think how the money could be used more resourcefully and choose if the item is more important than other wants and needs.
  • With online bill pay and electronic bank statements, you have to be intentional about showing your kids the regular income and outflow of your family budget. Make a point of sitting at the computer with them to demonstrate these tasks.
  • Visit an ATM with your kid(s) in tow and talk about where the money you are dispensing is coming from. Tailoring the conversation to their age, mention it’s your money and what a bank account is.
  • Volunteer as a family and share your values in a rewarding way. Spending time together helping others in your community offers a guaranteed return on your investment.

More Resources

  • Read “The Secrets of the Blue Pig” (PDF, 359K) for more ideas on teaching your kids about money.
  • Bring your child to a free workshop and learn together about sharing, saving and spending. We offer educational workshops in communities across the country for parents and kids (ages 6-10) or parents and teens (ages 11-14). Find a workshop in your area.
  • If you’re looking for ways to save money here or be smarter there, go to free daily tips. There’s a new tip every day of the month especially for your age bracket.

 

1 T. Rowe Price Parents, Kids & Money Survey, 2010.

2 Charles Schwab Teens & Money Survey, 2011.