mother with kid in window

Teaching kids about money has become increasingly difficult as plastic cards and smartphones replace counting money and, dare we mention, writing checks.

So, how do we teach kids the value of a dollar, if we rarely use them?

Well, the first step is simple. In order to teach your kids about money, you have to talk about money.

It’s never too early to introduce or reinforce positive money habits for your kids. If you’re not sure where to start, here’s a mix of simple concepts and activities you can try to set your child up for a life of smart money management:

1. Create a budget

Begin your money education with the basics. Show your older children how to manage their income (whether it’s an allowance or a paycheck) by designating different portions for savings and spending, creating categories for different types of spending (e.g., entertainment, eating out, etc.), and suggesting limits for those categories.

2. Teach them to ‘Pay Yourself First’

Pay Yourself First is a financial concept based on the idea that, every time you receive income, you immediately put some towards your necessary costs. Your children don’t have bills, but they should treat contributing to their savings as necessary. Pay Yourself First will remind them to always save money before spending it.

3. Start a savings match

To illustrate the idea of a retirement account with an employer match, you can match a portion of their savings. For example, for every dollar your child saves, you contribute a quarter. They’ll surely appreciate the way their money grows in savings.

4. Shop together

Involve your kids in the shopping process. Supermarkets are a good place to start with this. From making a list of items to comparing costs on similar products and finding coupons, involving them will highlight the financial aspects of buying food.

5. Let them spend their own money

It’s important to let your younger kids spend their own money. You can make suggestions, but try to avoid setting strict rules about what they can and can’t buy. You can do this by setting them up with a starter checking account or by giving them cash, both will teach them how to manage money they have earned. After all, the best way to learn something is through real-world experience.

6. Let them make mistakes

It might be hard to watch your children make unwise spending decisions, but mistakes can provide valuable lessons. So, if they blow their whole allowance on comic books and don’t have anything left to go to the movies, they’ll likely understand how to make a different choice with their money next time.

7. Show them different ways to pay

Once your kids start to understand how money works, explain the different ways to make purchases. Discuss credit cards, checks, and digital payment methods like online transfers and Apple Pay.

8. Reward good behavior

Whether you have a toddler working on her first steps or a teenager working his first job, the Chartway Student Rewards program is an easy way to teach kids good financial habits as they earn rewards for smart behavior. Start them off early and as they get older, new rewards will be unlocked! Visit a Chartway branch or call to open a savings account for your child and deposit just $5 to get started.

9. Plan a field trip to your credit union

Planning a trip to your local credit union may be very insightful for your children. Introduce them to the team, show them the ATMs, and open an account for them. Having their own account gives them a direct experience with money.

10. Include them in financial planning

If you’re doing any kind of financial planning, solicit input from your kids. Enlist them in your saving goals—no one watches you more closely than your kids, so they’re natural accountability partners! If you’re uncomfortable revealing too much of your financial picture, you can keep the discussions high level, but involving them makes money less abstract.

The key to raising financially successful adults, is to bring money and savings into the conversation early. Start small using everyday examples, like the cost of a toy they’ve been wanting and how long it will take to save up for it. We know that it can be difficult to come up with fun ways to teach your kids how to save so we’ve put together some activities that might just peak their interest!

Eventually, you’ll be able to explain how to save for a car, college, and even buying a home!