Teaching your child financial lessons, including saving strategies and money-management skills, is crucial to help your children achieve long-term success. So make it a pandemic project to impart the importance of smart money management.
“We as a society don’t like to talk about money,” said TCU’s Director of Financial Wellness and Wellbeing Jeff Sobieralski. “For many people and families, it’s a taboo topic.”
Sobieralski says he and his wife started teaching their kids about money at an early age, and that we shouldn’t be afraid to talk about our finances.
“The same way we want them to understand the importance of saying ‘please’ and ‘thank you,’ we also want them to understand the importance of money,” Sobieralski said. “What it’s worth, why it’s important and how to practice smart habits that lead to success.”
Sobieralski adds that children are “little sponges,” learning and soaking in everything, and ages 3 to 6 can be a great time to introduce key financial concepts. While they may not understand everything at this age, he says, building a foundation in finance is crucial since money habits are formed by age 7.
Financial education begins at home — children’s economic choices are often shaped by their parents, either through direct learning or simply by being in the same environment — and TCU offers resources to help parents teach their kids financial responsibility.
TCU has a Kids Club to encourage kids to save. When a youth account is opened, TCU gives the child a piggy bank. Each time a child visits TCU to make a deposit, they can choose a Kids Club prize to reward them for taking care of their money. He also encourages parents to help their kids set a goal of something they would like to use the money on. (Sobieralski says his kids are saving for a car!)
He also routinely includes his children in discussions of the family budget and asks them to help decide on spending priorities. Teaching pre-teens the difference between wants and needs can help build day to day habits that will shape how they earn, save and shop as adults.
Weighing decisions such as “if you buy this, you will not have enough money for that,” helps teach budgeting and savings skills that prepare kids for a successful financial future, he says.
For young people ages 14 to 23, TCU offers a Student Rewards Checking account which includes special benefits, such as no minimum balance. Sobieralski says first-hand experience with a checking account is a great way for teens and young adults to learn the basics of budgeting.
“From age 14 to 18, kids’ eyes are on the future,” Sobieralski said. “At this age, we are preparing them to go out into the world. We want to make sure they are equipped with those life skills that will yield success.”
He believes that a checking account tied to a debit card is a necessity. It helps teach teens that money comes from somewhere. And as teens begin to earn money, setting up an account is a great way put a real budget plan to use.
He also recommends some formal personal finance training. If it’s not offered at your child’s school, TCU offers FoolProof tools to members — and the entire community. FoolProof is a free online learning program designed by consumer advocates to deliver financial literacy programs for middle- and high-school students to retirees.
“Young people have to get student loans. They have to pay their grocery bill,” Sobieralski said. “There are a lot of things that we need to know about money for, and it’s not always taught in school.”
Technology is also making it easier to introduce financial concepts to children. FoolProof has an app called “The NeighborMood” where players learn the importance of research before buying and why it's beneficial to stop impulse purchases.
While apps can be a useful way to introduce some of the concepts related to managing money, Sobieralski says apps shouldn’t solely be responsible for educating children on financial concepts. Just like personal finance curriculum in school, these tools should only be used as supplements to lessons taught at home.
“It’s important to teach kids at a young age that money is a tool that can enable you to live any life you choose,” Sobieralski said. “But you need to know how to use money as a tool correctly.”
This article is for educational purposes only and doesn’t constitute tax, legal or accounting advice. No material here is a recommendation. Please consult with an attorney or tax professional for guidance.