Set your kids up for a positive relationship with money. Use our age-by-age guide as a road map for talking and teaching financial responsibility.

By Cari Wira Dineen
August 13, 2019
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Like it or not, parents and guardians are often tasked with teaching kids about money. These lessons in financial responsibility may start at an early age (teaching delayed gratification while shopping by not caving and buying an action figure at the checkout) or later on (helping a college-bound student establish a budget for monthly fuel and entertainment expenses).

Today's parents have an extra hurdle to consider, too. Thanks to conveniences like debit cards, Apple Pay, and automatic bill pay, money can be invisible to kids. There are a few simple ways to demystify money matters, though, like using cash as much as possible to help them grasp the real value of a dollar. You can also show kids how online banking and bill-paying work so they see that there’s not a never-ending supply of money to buy things. (Money still doesn't grow on trees, after all.)

Whether you have a young child or a young adult, it's important to raise and educate your child to have a healthy, positive view of money management. These age-appropriate financial lessons can help them grasp important skills like saving, budgeting, and even financial giving as they grow and become more self-sufficient. Here's how to get started.

Elementary School

“Kids in elementary school are often fascinated by earning money,” says Beth Kobliner, author of Make Your Kid a Money Genius (Even If You’re Not), $15.46, Amazon. A great way to focus this energy and foster a sense of achievement is to help them start a project like a lemonade stand—from buying the ingredients to counting the day’s earnings. At the end of the day, sit down and review what they spent versus the dollars that came in. Just don’t micromanage; you’ll deny kids a chance to make mistakes and learn from them, says Alec Gorynski, vice president of community development and corporate philanthropy at First National Bank of Omaha. You can also help your kids earn cash by paying for one-off chores outside of their normal routine, such as organizing photos or washing the car.

Have your child set a goal like saving up for sneakers or jewelry supplies. For every dollar she saves, match it by 50 cents. Let them see their money grow by using a clear jar. Money from gifts and those one-off chores should go in as well. After the goal is met, deposit the remaining money into a savings account. Head to an actual bank rather than online, Kobliner says. Many banks offer a no-fee youth account or waive minimums if the account is linked to yours. “Call and see if someone who’s good with kids can help you open it and even give your child a peek at the vault,” she says. This is a good chance to explain how the bank is the safest place for money and how their savings will earn some interest.

Middle School

“Finances tend to be a top stressor in adults’ lives. Letting your kids know that it’s OK to talk honestly about money can help them deal with money anxiety down the road,” Kobliner says. Also, talk about your job and how you feel about it. “If you love your job, tell your child; if not, at least say you enjoy having one because it allows you to support the family,” Kobliner says. Having conversations with your kids about work and money not only will help them understand the nuts and bolts about personal finance better but also will make them more comfortable asking questions. One warning: Shield kids from disagreements with your partner or family over money. Keep the conversations instructional and positive.

Teaching kids to be charitable givers is also important at this age. “Giving back is a key component of a healthy relationship with money,” Gorynski says. Seeing the difference charity makes is a lesson that becomes more tangible for kids in their preteen years. Have your child choose one charity that they’ll donate a portion of their earnings or gifts to. Don’t worry if your child isn’t super enthusiastic at first: What’s important is the good deed itself. “You’re letting your kids know that giving back is a family value,” Kobliner says.

High School

If your teen's schedule allows it, encourage her to get a job. “A job provides spending money and real-world experience,” Kobliner says. Ideally, it’d be a summer job. If it’s during the school year, keep the hours in check; research shows that high schoolers who work more than 15 hours a week tend to get lower grades—presumably because they have less time to study.

High school is a good time to get smart about savings. Have your teen put some of their earnings into an individual retirement account (Roth IRA). “Roth IRAs allow money to grow tax-free,” Kobliner says. A bonus: Federal rules for college financial aid require kids to chip in based on assets, and retirement accounts, like IRAs, aren’t counted.

Related: The Best Ways to Organize Finances After Taxes

College

At this stage, your college student ought to understand a few budget basics before enjoying a taste of independence. Sit down and map out daily, weekly, and monthly costs with your college student. Debit cards eliminate trips to the ATM, but kids can easily run through the money (Uber rides, pizza) without a tally. Free budgeting apps like Mint can also help your student stay on top of spending.

A sit-down chat about how to build credit is key, too. “Young adults should understand the consequences of using credit poorly,” Gorynski says, “but they also need to know that credit can be good.” Talk about how credit helped you buy a car or house but emphasize that credit comes with a huge responsibility. Discuss an example of someone who has misused credit. And Kobliner doesn’t recommend cosigning on a card for your child; he can get one when he qualifies on his own.

Helping your child have a positive view of money management early on will set her up for success down the road. And with these expert tips, you'll have a financial guide every step of the way.

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