The best time to start teaching kids about money? Today!

Money management isn’t part of the curriculum in most American schools, but it’s an important skill set for every child to develop. There are lots of ways parents can incorporate financial management lessons into daily life, and the best time to start is now. Here are a few tips from financial experts on how to put children on a path to financial success at any age.

Pre-school & Kindergarten

• Teach by example. That old saying, “children learn what they live,” is so true, and it applies to financial habits, too. Even when children don’t appear to be watching and listening, they are. Leading by example is critical as some of the most powerful messages parents send about money management may be the ones not spoken. Financial experts suggest parents do their best to avoid impulse buys, save for large purchases, reserve credit cards for emergencies, and stick to a budget. All of these actions will not only help the family bottom line, but they’ll send positive messages about money management to the children as they start to develop their own financial habits.

• Creative play. A great way to start introducing the most basic financial concepts to young children is through creative play. Financial expert Beth Kobliner suggests parents encourage children to play store or bank. “Through pretend play and everyday activities young children can develop thoughts, attitudes, and behaviors that will lay the foundation for their later financial well-being,” she explains. Kobliner’s website and the Consumer Financial Protection Bureau’s website, Money as You Grow, are excellent resources for age-appropriate financial lessons and activities.

Elementary & Middle School

• Wants vs. Needs. When it comes to money management, it’s all about choices. Children between the ages of 6 and 10 can really benefit from learning how to make good choices by distinguishing between their wants and needs. When they want to buy something that isn’t a necessity, help them to reach this conclusion on their own by asking a few key questions. In a com article, “The 5 Most Important Money Lessons to Teach Your Kids,” Lauren Shin offers insight for parents. She suggests asking questions such as, “Do you think this is something we really need now, or can we wait? Do you think it may be less expensive online or in another store?” Help them develop the habit of stopping to consider if they need something before they toss it into the shopping cart. This is a skill they will carry with them into adulthood that will serve them well.
• The art of saving. Learning how to budget, and how to save, are critical financial skills for every age. Getting started can be as simple as encouraging younger children to save some or all of their birthday money or allowance in a piggy bank or clear jar. Learning to save with physical currency is one of the 6 Important Money Management Lessons for Kids outlined in a com article. The experience of working with tangible money will introduce them to the basics of money management, and help prepare them for a trip to the bank when they’re a little older. Many banks, including Fidelity, offer special savings programs just for children. Fidelity’s Green Team Savings plan is designed to make learning about saving fun. For a minimum deposit of $1, any child under age 18 can open an account. Green Team Savings offers exclusive events with the program’s mascot, Sammy Saves-A-Lot, special products, and discounts.

High School & College Bound

• Earning the extras. For the “extras” a teen may want – the latest video game, name brand boots, or concert tickets – encouraging them to earn and save is a great life lesson. Financial guru Dave Ramsey suggests parents help their teens find part-time jobs or start their own business. Not only will this help teens understand the value of a dollar, it will also help them develop budgeting and time management skills.
• Beware of credit cards. College bound students may receive countless offers for “pre-approved” credit cards once. As soon as they turn 18, they’ll be inundated with one glitzy credit card campaign after another. These offers can be hard to resist, and that’s by design. Be sure to discuss the appropriate use of credit cards, encouraging them to establish credit by opening one account for emergencies. This will help them avoid a scenario after graduation in which they are trying to pay down credit card debt and make student loan payments at the same time.

Learn More

Fidelity Bank has built a strong history as trusted advisors to the customers served and is proud to be an active member of the community of Northeastern Pennsylvania. With branches located throughout Northeastern Pennsylvania and the Lehigh Valley, Fidelity Bank offers full-service Trust & Investment Departments, a mortgage center, and an array of personal and business banking products and services. The Bank provides 24 hour, 7 day a week service to customers through a variety of digital banking tools, branch offices, online at www.bankatfidelity.com, and through the Customer Care Center at 1-800-388-4380.

Daniel J. Santaniello, President, and CEO, of Fidelity Bank, publishes Financially Fit with Fidelity, your guide to financial well-being, every Thursday. If you’re interested in a financial topic we haven’t yet covered or want to subscribe to our emails, please feel free to drop us a line at blog@fddbank.com. We would love to hear from you.