From the American Bankers Association
Whether your kids are simply doing a few chores around the house to earn an allowance, or if they are old enough to have a summer job, ANY age is appropriate to teach your child financial lessons that will last a lifetime.
It's never too early to begin teaching children the basics of finance. The American Bankers Association (ABA) encourages parents to expose their children to experiences like visiting the bank, budgeting and paying bills.
To help you get started, the ABA has offered the following list of teachable moments:
- Needs vs. wants. Explain the difference between needs and wants, the value in saving and budgeting and the consequences of not doing so.
- At the bank. When you go to the bank, bring your children with you and show them how transactions work. Ask the manager to explain how the bank operates, how money generates interest, and how an ATM works.
- On payday. Discuss how your pay is budgeted to pay for housing, food and clothing, and how a portion is saved for future expenses such as college tuition and retirement.
- At the grocery store. Explain the benefits of comparison shopping, coupons and store brands.
- Paying bills. Explain the many ways that bills can be paid: over the phone, paper or by check, electronic check, or online check draft. Discuss how each method of bill pay takes money out of your account. Be sure to cover late penalties, emphasizing the importance of paying bills on time.
- Using credit cards. Explain that credit cards are a loan and need to be repaid. Share how each month a credit card statement comes in the mail with a bill. Go over the features of different types of cards, such as ATM, debit and credit cards.
- Set an example. Be an example of a responsible money manager by paying bills on time, being a conscious spender and active saver. Children tend to emulate their parents' financial habits.