Teaching Kids the Value of Money

In the days where purchases happen with a simple swipe, it’s easy to see how some kids may not understand the way money works. While parents rely on the convenience of electronic payments and apps, they should still teach kids money management principles. And no matter the age, it’s never too late to learn smart financial habits.

“Most schools don’t teach children about money outside of basic math and counting skills,” says Wendy Kernan, Town and Country Bank’s Director of Branch Services. “To grow up with financial knowledge and think long term over that short-term gratification goes a long way.”

To start out, Kernan suggests laying the foundation with these real-life basic guidelines: 

1. Gather up all the piggy bank money and open a savings account. Town and Country offers youth accounts with no minimum balance requirements or service charge. While the child gets the hands-on experience of depositing money, a parent controls the funds and makes withdrawals.
2. Offer an allowance but only for going above and beyond. Kids should be expected to contribute to regular household chores without compensation. A good rule of thumb is $1 per age of the child each week. So a 10-year-old could receive $10 a week.
3. Teach your child the importance of financial patience with the spend, save and share system. By categorizing money, kids experience the payoff of saving up for something special and how it feels to give back to a special cause. This would also be a good opportunity to explain how taxes work.
4. Monitor their purchases carefully. As the digital revolution of cashless payments continues to grow, many parents now give teens money through apps or prepay cards. Many apps allow parents to see exactly what’s purchased and even block certain stores or categories. Take advantage of that service, and help your child make smart decisions.
5. Set an example. Kids naturally pick up habits from their parents. A simple conversation to explain why a purchase or vacation isn’t possible teaches kids about life’s realities. Understanding this concept and the value of saving helps put them on the right path to become financially successful adults. 

For more information on youth accounts at Town and Country, call a Solution Center team member at 1-866-770-3100.