This content was originally featured in the Batavia Daily News
As a community banking professional and father of two children, I often think about the importance of teaching them financial literacy. During Community Banking Month, we celebrate National Teach Children to Save Day on Thursday, April 22—a perfect opportunity for both parents and caregivers to begin having conversations with their children about how to manage money. It’s never too early to get started!
Every family’s situation is different, but there are easy, actionable steps that all parents can take to teach their children the value of a dollar. For example, around holidays and birthdays, our family opts for smaller gifts and encourages our relatives to give money instead of “stuff.” I always had one rule for my children when it came to receiving money; it goes right into their savings accounts. This is just one quick way to get the conversation started.
I often talk to my kids about the benefits of saving, and how over time, they could plan for larger expenses down the road. When your kids’ savings starts to grow, it’s crucial to show them how their work is paying off by reviewing their statement and balances with them.
Starting small is key. Compensating them for basic (but important) tasks is a great way to teach them about earning their own money. When my children would finish a book, I would ask them a few questions, have a conversation about what they learned or enjoyed, and give them a dollar once it was done. This was a fun and easy way to teach them about earning cash, while expanding their horizons from an early age.
Allowing your kids to redeem the family’s recycling for the cash, giving them a budget when you take them back-to-school shopping, or even discussing prices at restaurants and stores are all little things you can do over time to instill the value of saving. By simply being open about the concept of money, little ones will start to develop their own savings habits.
As children get older, these conversations can become more complex. For example, learning the differences between debit and credit cards. It sounds simple, but it can be confusing for kids and teens to understand the differences between the two types of plastic. This conversation is a good time to bring up impulse buying and if they have enough money in their account to cover certain expenses. It’s important to discuss whether or not the purchase is worth dipping into hard-earned savings, or if it can wait.
Lastly, always keep an eye out for educational opportunities that support and augment the learning your children are enjoying at home. I teach two Junior Achievement classes a year that equip students at various grade levels with personal finance skills they’ll need to be successful at various stages of life. I encourage all families to advocate for a Junior Achievement program in their school if they do not already have one.
Teaching kids about the value of money starts with the adults in their life. Always lead by example. It’s never too early to help youngsters gain a better understanding of saving, and to develop good habits as they grow into adulthood.
Mickey Hyde is vice president and branch manager of Tompkins Bank of Castile’s LeRoy branch. He can be reached at email@example.com or 585-768-2525.