Ways to Help Your Kids Build Better Money Habits

4 Min. Read

Do you remember how you first started learning about money? Was it by setting up a lemonade stand? Selling your “art” or other homemade items? Or maybe just watching how your parents budgeted and shopped for groceries?

Our upbringing plays a big role in shaping our relationship with money.

As parents or guardians, we all want our kids to grow up with a healthy understanding of money, and teaching them good financial habits early on can set them up for a lifetime of economic success. But how do you go about it?

This blog looks at some practical and fun ways to help your kids build better money habits so they can be ready for the future.

How to Teach Kids About Finances

Teaching kids about finances can be achieved in many ways, and most of them are simple, everyday actions:

• Lead by example. Kids learn a lot by observing their parents or guardians. Demonstrate good financial habits like budgeting, saving, and making thoughtful purchases, and talk to them about why you make certain economic decisions.
• Involve your kids in everyday financial activities. Take them grocery shopping and explain why you choose certain items over others, showing them how to compare prices and look for deals.
• Give your kid an allowance. Use this as an opportunity to teach them about good money management. Encourage them to divide their money into categories: saving, spending, and giving.
• Consider a course. Age-appropriate books, online resources and apps, and workshops or classes on financial education offered by some communities can be helpful ways to teach kids about money. Here are other specific resources:
  • Consumer Finance, “Money as You Grow” tool
  • FDIC “Money Smart” Catalog
  • gov Online Money Games
  • Khan Academy
  • BizKids
  • Practical Money Skills
  • Zogo App

• Play money games. There are many educational games and apps designed to teach kids about money! Board games like Monopoly or online games can make learning about finances fun and interactive.

Here are some fun online financial games:

• Hit the Road: Manage your vacation budget while on a cross-country trip.
• Financial Football: A game sponsored by VISA and the NFL.
• The Uber Game: Manage your money as a full-time Uber driver!

If you want to learn more about the benefits of teaching your kids smart money habits or take a look at specific resources tailored for children, check out this FDIC article for more information.

What is the Best Age to Teach Kids About Money?

You can start teaching your kids about money as early as preschool. At this age, they can begin to understand basic concepts like counting money and recognizing coins and bills.

As they get older, introduce more complex ideas like budgeting, saving for specific goals, and the importance of not spending more than they earn. Adjust your lessons to their age and maturity level:

• Preschool (3-5 years old): Basic concepts like identifying coins and bills, understanding that things cost money, and the idea of saving.
• Elementary (6-12 years old): More detailed lessons on budgeting, saving for goals, and understanding needs vs. wants.
• Teens (13-18 years old): Advanced topics like managing a bank account, understanding credit, and planning for larger expenses like college or a car.

Learn more about age-appropriate money topics with this Parents.com blog.

What You Should Teach Your Kids About Money

You should teach your kids about the value of money, helping them understand that money is earned through work and explaining different jobs and how people earn money. Show your kids how to create a simple budget, explaining that a budget helps plan spending and saving for future goals.

Teaching kids smart spending habits, like thinking before making a purchase and researching to find the best deals, is also important. You can also emphasize the importance of giving back and encourage your kids to set aside a portion of their money for charity or to help those in need.

How to Set an Allowance

An allowance can help kids learn to manage money while you’re there to guide them through mistakes. Here are a few simple tips to get started:

1. Decide what works for your family. Look at your budget and think about what the allowance will cover. Will it be for small treats or saving for bigger goals? The amount you give will likely grow as your child does.
2. Set clear expectations. Will the allowance be tied to chores or behavior, or is it simply a tool to teach money management? For older kids, consider having them use their allowance for some of their own expenses, like clothes or activities.
3. Choose a schedule that makes sense. Younger kids might do better with a weekly allowance so they can practice managing smaller amounts more often. Older kids could benefit from a monthly allowance to learn how to stretch their money over a longer period.

Bonus tip: For teens, consider using a prepaid debit card like Greenlight or a family-friendly money app like FamZoo. These tools can teach them how to track spending and get comfortable with digital money management.

It’s Never Too Late to Teach Kids About Money!

It’s never too late to start talking to your kids about building good financial habits. Regardless of your own financial situation, consider the future you want for your kids and the financial goals you want them to achieve. The timing doesn’t have to be perfect—just start the conversation.

Remember, the key is to make learning about money fun and engaging, and to be patient as they develop these important skills. Happy teaching!

How Marine Credit Union Helps with Financial Education

Marine Credit Union is here at every step on your financial journey. While we don’t have a specific kids’ account, we do have plenty of online resources for educational education:

• In Digital Banking, go to Financial Planning and click Financial Education to access our KOFE (Knowledge of Financial Education) platform
• MCU Financial Education (Greenpath Financial Wellness)
• MCU Learning Hub
• MCU Webinars

If you have questions about teaching your kids financial education or about your own finances, reach out to us today!