Teaching the Road to Financial Responsibility
The path to helping your kids build a strong financial foundation that will last a lifetime begins at home! Starting by saving for them is an important and great first step, but teaching them the value of saving on their own is a powerful early lesson that will yield lifelong benefits. It also helps pave the way for additional lessons and great conversations as they grow to understand important financial principals that will play a vital role in their future financial success.
To help parents take advantage of age-appropriate lessons, the American Bankers Association developed an infographic with tips for every stage of your child's education. Click here to download The Road to Financial Responsibility infographic. These tips and more are listed below:
Pre-school through 2nd grade
- Start saving early by opening a youth savings account or exploring 529 college savings plan options, available in every state.
- Ask relatives to contribute to a college fund instead of giving toys.
3rd through 5th grade
- Take your kids to the bank to introduce them to depositing money and making basic transactions.
- Use allowance to teach kids about saving and spending money early on.
- Create a saving jar, spending jar, sharing jar, and investing jar to show the different ways that money can be organized and used.
- Explain the differences between needs and wants
- Take your kids to the grocery story. Have them help make decisions about what to buy based on your budget.
6th through 8th grade
- Help your kids find simple jobs, such as babysitting or car washing, to start earning and saving money.
- Introduce the concepts of income, expenses, and budgeting
- Create short and long-term savings goals with your children to help reinforce their savings habit
- Include your children when planning finances that involve them (such as planning vacations, paying for school tuition, and buying a new vehicle) so they can learn how to make sound financial decisions.
9th and 10th grade
- When starting a first job, help your child create a realistic savings and spending plan so they learn smart strategies for using their money now and in the future.
- Research scholarships and other post-secondary education funding resources with them now to cover the rising cost. Share the benefits of early high-school academic performance on future scholarship opportunities.
- There are a lot of expenses when your child goes off to school. Set a goal and start saving together for housing, travel and other costs.
11th and 12th grade
- Talk to your teen about credit and avoiding identify theft. They should understand the implications of accumulating debt and aim to pay off their monthly balance in full.
- Help your teen learn about scholarships, investments and funding plans now so they're better prepared to make decisions on what college, trade school or university to attend.
- Ask relatives and friends to contribute to a savings fund as a graduation gift.