How to Teach Teens & Children About Money

father and child sitting together

Teaching children and teens about money starts with demonstrating good habits and having an open conversation. Talk to them in simple terms and work with examples that can make sense to them. Remember, you’re not prepping them for an economics degree. Instead, you can start (and keep) talking to your kids about the importance of saving and smart spending. As a parent, you can set an example by talking about how you save money for items you purchase. You can also teach them about value by comparing product prices and how you make the decisions to purchase.

Have an ongoing conversation about needs versus wants, including how you save money for unexpected purchases that are needed. Talk to them generally about how you work so you can make money to make purchases or pay bills. With most transactions being done digitally, it is even more important to teach children about money since paper currency or coins are less present in everyday life.

Tips For Teaching Young Kids About Money

Identify age-appropriate chores they can accomplish, then pay them for completing them so they can understand earning money for work. Encourage saving money for items they want to purchase by using a clear jar or piggy bank, so they can actually see their progress.

As they save their money, talk to them about their coins or paper money and count it with them on occasion so they know their savings grows. “Look, you have 4 dollars! Last time we only had 3! One more and we can get that toy you want.” Take them to the store when they have saved enough money to buy something they want, then let them pick the item out and hand their money to the cashier so they'll be excited as they learn the value of “this money for that thing.”

You could even start teaching kids about loans—how you sometimes need to borrow money if you promise to pay it back. “I know you have 6 dollars at home, so I’ll loan you the money now, and you can repay me with six of your dollars when we get home.” And when you get home, let them give you that money from their bank.

Talking to Teens About Money

As kids get older, there is even more temptations to spend money. Knowing about saving money and avoiding debt is an important part of financial education. Open an interest-earning bank account to show your teen how their money is protected in the bank and how money can grow over time.

Talk about the difference between short-term spending money, saving for bigger items, and long-term savings goals. Help your teen split up any money earned from an allowance or job to get in the habit of “paying themselves first” by setting an amount aside for things like college or a car. And with online or mobile banking, they’ll be able to learn to monitor their savings and spending.

Having banking experience and foundational financial education will be invaluable when your teen begins making more money or needing to get a loan. With an account that includes online or mobile banking, your teen can check their account frequently. They can set alerts to help ensure they keep a positive account balance. Make sure your teen knows that using a debit card is like spending cash because the money comes directly from their account in real time.

Related: Credit Cards vs Debit Cards: What’s the Difference & Which You Should Use

You can also deposit checks by using your smartphone. It’s as simple as taking a couple of photos and following simple instructions in your mobile banking app. Additional reminders to help your teen understand their banking account:

  • Money in the bank is safe; it’s insured by the FDIC. Learn more about what this means.
  • Debit cards and checks can be used at most businesses and restaurants. But while they are safer than carrying large amounts of cash, you still need to protect them from theft. Make sure your teen knows how to contact their bank immediately to report a lost card or report a problem.
  • When you have an account at a bank, you can avoid some charges for services like getting a paycheck cashed. Places like check-cashing businesses will charge you a fee for this type of service.
  • Your bank will never call, email or text asking for personal information like an account number, personal identification number or account username. Beware of scammers who say something is wrong with your account. Never click on links in unsolicited email or text messages. Read more tips about scam safety.

Fidelity Bank has a Kids Savings account just for children who are 18 years old and younger.


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