Discussing Money with Children
Most children look to their parents or guardians for cash, but rarely ask about finances. Be sure to have important financial conversations with the young people in your household, whether that’s sitting at the dinner table or during a road trip. It’ll help to encourage a lifetime of financial wellness.
Here are a few topics to get you started.
Cash Value
First things first: money has value. This is a simple but important concept that can be introduced to children as young as two years old.
Use pretend play, like imitating checkout at a grocery store, or showing them how you pay at a restaurant – whether it’s with cash or card. Offer a simple explanation like, “This money is a payment for all this food.” For a more interactive lesson, you could let your child hand the money to the cashier. Just be careful, toddlers have a knack for putting little objects into their mouths.
Pro tip: While learning the value of money, children can learn where it comes from, too. The hard work that you put into obtaining money is an important part of understanding money’s value. After all, it doesn’t grow on trees!
Budgeting
If you’ve given your child an allowance or taken them to an arcade, this could be part of your conversations already. You can use such opportunities to let them manage a small budget. While spending the afternoon at a carnival, let’s say you’re planning to spend up to $25 on your child. At the beginning of the event, tell them about their limit. Then, help them stick to it. Whether they’re attracted to the food, games, rides, or souvenirs, they’ll start to think twice before spending. You can even challenge them to save a portion of it for another day, especially if they have a future purchase in mind.
Savings and Loans
Even before their teen years, children can start to understand how savings and loans work. They may not qualify yet for a loan product at a financial institution, but you can simulate the learning experience at home.
Perhaps they’re interested in a pricey item that’s not being considered for a birthday or holiday gift. Create a savings plan or provide a small loan they could reasonably pay back over time. Eventually, small chores or weekly allowances could add up to a full repayment. Show them the repayment plan and check in regularly to hold them accountable. It’s also an opportunity to reflect on cash value: which purchases are worth the time and effort?
Account Management
When it comes to storing your assets securely, the sock drawer has its limitations. At some point, your child should learn how to make deposits and withdrawals at a financial institution. As they grow their savings and open a Flex Checking account with debit card, it’s a good time to offer them guidance on how to manage and monitor accounts.
Our online resources, such as digital banking and Wallet Wellness, are excellent partners for educating your child to manage funds responsibly as they grow toward adulthood. Take time to learn about these tools and offer your teenager support as they get started.
Help them discover the benefits of our services:
- To instill good budgeting habits, review eStatements together during a monthly check-in
- To reduce the chance of overdrafts, set Alerts for low balances in their checking account
- To prepare for the inevitable, discuss the Card Controls features for lost and stolen cards
- To help them protect their accounts, share our Security articles and tips
- To encourage them to continue with financial literacy, challenge them at Zogo®
With digital banking, our Visions FCU Mobile app can put these resources and more at their fingertips. If you need help with any of our digital banking features, please call our Contact Center at 800.242.2120 or visit visionsfcu.org/digital for more information. If they’re between the ages of 13 and 17, they’ll need your permission to set up digital access.
Support for All of Life’s Stages
As you set the groundwork for your family’s financial future, we’re here to help.
Learn about our accounts for youth and young adults, including our Kirby Kangaroo Club (ages 0-12), Focus account (ages 13-17), and Forward account (ages 18-25).
For support with your family’s financial goals, connect with our Financial Wellness Officers at education@visionsfcu.org.
This article first appeared in MoneyMatters Magazine. Click here to continue reading our current publication.
