Money and Kids: 5 Tips for Success

We are pleased to welcome guest blogger, Laura Edgar, senior writer for, a personal finance website dedicated to promoting financial literacy.

Money management is a popular topic for grownups, but it’s just as important for kids. Sure, your child may not have to worry about paying the mortgage, but she does need to practice budgeting, spending and saving. Kids who learn good money management habits are way more likely to make smart financial choices when they grow up; study after study confirms it.

Teaching your children good money skills isn’t as difficult as it sounds. You already know a lot about it! Here are 5 expert tips to get you started.

Start young
Your toddler definitely isn’t ready to count quarters, but she can still practice basic skills that set a good foundation for financial planning, such as decision-making (weighing competing desires and making trade-offs) and patience (delayed gratification). Don’t take these skills for granted; this type of emotional control will help her avoid debt later in life.

Practice, practice and practice
Like anything else, practice makes perfect. If your child is old enough to buy his/her own stuff, he/she’s ready to start managing money, too. Give him/her an allowance and help them set monthly and yearly savings goals.

Set a good example
You are a financial literacy expert, at least in the eyes of your child. You can turn your everyday money management decisions into teachable moments just by including your child in the conversation. The next time you go to the drug store, for example, make the list with your child and have her accompany you on the shopping trip. Be sure to discuss what items you’re purchasing and why. As you make decisions together, she’ll get good practice with budgeting and prioritizing.

Work with cash
If your kids are new to handling money, they need to be working with cash. It’s that simple. Kids need to understand spending and saving in the real world before they can understand account management or online banking. With cash, they can literally see and feel the money coming and going.

Open a bank account
At some point, your child will outgrow their piggy bank. When this happens, it’s time to get them a savings account so they have a safe place to store their money and watch it grow.

Our Kid’s Club savings account is perfect for youth age 12 and under. If you have a teen, get them a checking account so they can practice using their debit card and making deposits. They will find it especially useful if they have a job, like many teens. If your child is under 18, you’ll need to cosign the account application and assume full legal responsibility. That’s great for both of you. You’ll be able to monitor the account activity and provide guidance if problems occur.

If you’re looking for more money tips, be sure to check out The Learning Center, our online collection of financial literacy articles. High school and college students can check out NerdWallet’s free financial literacy orientation to learn more about money management basics.

If you have a teen, ask their high school staff if they offer Community Bank of Tri-County’s Financial Scholars Program. This web-based financial literacy program uses video, animations, 3D gaming, avatars and social networking to teach teens money management skills.

How do you teach your children about money?

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