Introducing responsible money habits at a young age sets kids up for a future of financial stability and success. Without these skills, individuals may face debt, poor credit, and financial insecurity. Teaching your children about money empowers them to:
- Avoid Debt: Understanding saving helps avoid unnecessary debt.
- Build Wealth: Good habits lead to smart investments and money accumulation.
- Prepare for Emergencies: Ensure they can handle unexpected expenses.
- Financial Goals: Makes buying a home or starting a business achievable.
- Enjoy Retirement: Early education lays the groundwork for a stable retirement.
As a parent, teaching children all of life’s lessons can be challenging, especially when it comes to saving money. The good news is it doesn’t have to be. Here’s how.
Teaching Toddlers and Young Children About Money
Children start learning the moment they’re born, and as toddlers, they learn through imitation and repetition. You can begin by explaining what money is and where it comes from. YouTube videos, online games, and apps are excellent tools for a toddler because many use simple songs and cartoons to help them visualize the concept.
Educational Tools:
- Peter Pig’s Money Counter – An app designed to teach young children to count and sort coins, teaching budgeting and savings.
- The United States Mint – H.I.P. Pocket Change Kids Site offers educational games to help kids learn more about money. It includes more activities such as experiments, trivia, coloring pages, plus fun videos on their YouTube channel!
- PNC ‘S’ is for Savings Account: Created with beloved Sesame Street characters, this account turns saving into a fun adventure for young children. It starts earning interest with just $1, and kids can access it online and on their parents’ phones. Colorful jars marked ‘Save,’ ‘Spend,’ and ‘Give’ teach kids about managing money wisely. Plus, the account offers a variety of activities tailored for their age to help them learn more about finances in an engaging way.
You can also use a clear jar instead of a traditional piggy bank to visually show savings. Set goals, such as saving for a special treat, to reinforce delayed gratification.
Savings and Allowance Tracking for School-Aged Kids
As your child grows, introduce them to new methods of financial education. Consider giving them an allowance for doing household chores like laundry, mowing the lawn, washing dishes, etc. This not only teaches them the value of hard-earned money but also to reach their goals, they will need to save, save, save.
Here are a few fun allowance tracking and saving tools tailored for this age group:
- PiggyBot: An allowance app that teaches kids to track spending and savings in a fun, easy way.
- Bankaroo: A virtual piggy bank for parents to manage kids’ allowances. No money is actually exchanged; the app serves as a digital IOU to track how much they’ve earned.
- Capital One Kids: A fee-free account that makes saving fun. Parents can automate deposits or tie chores to payments, while kids earn a 2.50% APY on balances.
- Homey: Allowance app helps kids learn how to work for their earnings
- iAllowance: Family finance app for managing allowances and expenses. Supports multiple children with individual profiles and unlimited banks for tracking spending, savings, and more. Customize with real money, stars, or time-based accounts.
- BusyKid: Parents set the chores, kids complete them, and allowance is direct deposited each Friday!
Empowering Teens with Financial Independence: Top Banking Tools
Being a teen involves expenses like movies with friends, shopping, buying a first car, or planning for college. Introduce them to their own debit card and help open a checking and savings account, guiding them through ATM withdrawals and check-writing. Instead of watching over their shoulder or questioning their every move, most money apps for kids have parental controls that keep parents in the loop in real-time.
The good news is “teen” banking has really come a long way and there are options parents can set for customized alerts for transactions, spending limits, and even restrict spending at certain locations. Recommended money tools for pre-teens and teens include:
- Fidelity Youth: similar to the adult Fidelity account and allows teens to invest how they want. The brokerage account is for ages 13 to 17 allowing them to buy stocks, ETFs, and Fidelity mutual funds. It includes a free debit card for spending management while focusing on growing their balance.
- BECU Youth Savers Account: An easy-to-use savings account for kids where parents co-own the account. Kids over 13 get free online and mobile banking, with high APYs on the first $500 deposited (currently 6.17%).
- Chase First Banking: Provides kids with their own debit cards and integrates with the Chase mobile app for easy account management. Parents can set alerts, spending limits, and restrictions on transactions.
- Greenlight: A debit card for kids managed by parents, with up to five cards per subscription. Parents control spending and can opt for an investment feature where kids can invest in stocks or ETFs with guidance.
- GoHenry: A secure way to learn about money with features like direct deposit, online spending, and a choice of teen debit card designs. This card isn’t linked to a bank account, so you spend only what’s loaded on it—no credit risk or debt concerns.
- Current: A versatile debit card choice for teens accepted anywhere Visa is, with parental controls over spending limits and transaction locations.
Once they have an account, download Intuit Mint. This app enables users to link checking and savings accounts, set savings goals, and manage monthly bills, providing teens with a comprehensive view of their net worth, goals, and income.
Regularly discuss money and provide resources for financial success to build a solid foundation for their future. For more tips, visit the Slavic401k blog.
