Teach Children to Save Day is celebrated each April and encourages children to foster and grow good financial habits. Teaching children the basics of money can help instill a firm financial foundation that will support them in their future financial health. We’ve put together a list of six ways you can help teach the children in your life about money.

Instill a habit of saving
Saving money is an important lesson to share with children, whether they are four or fourteen. A good starting point is to teach them to save ten cents of every dollar they make. This basic lesson will teach them the importance of paying yourself first.

Set an example and model good financial behavior
One of the best ways to teach your children about money is by modeling good financial behavior in your personal life. When you are building your emergency fund, budgeting your monthly finances, paying down debt, or completing other financial tasks, be sure to share this with your children. Many children learn by watching what you do, and having your finances in order could help your children with theirs later in life.

Teach them how to budget
Teaching your children how to budget will help better prepare them for adulthood, as they will already be familiar with this basic building block of good financial health. Teach them to track the things they buy and their income, or more likely allowance, for one month. After that month is over, go through the purchases together and sort similar items by category. For example, if they purchased any toys with their money throughout the month, then they should have a “Toys” category. As your child gets older, the number of their categories will likely grow, as will their income. After determining where their money is coming from and where it has been going to, it’s time for your child to create some goals. These goals should include both short and long-term wishes, like saving for a bicycle (short-term) to saving for their first vehicle (long-term). While goals are meant to provide something to strive for, they should always be age-appropriate and achievable. Finally, have your child review their budget and goals every few months to ensure they are staying on track.

Keep it age appropriate
No matter your child’s age, teaching them to be financially fit is important, but sometimes it’s difficult to know which lessons to teach them that are age appropriate. For younger children, like preschoolers and kindergartners, consider teaching them through shared experiences – like a trip to the grocery store. They’ll learn that money has value as they see you select items that align with your budget and pay accordingly. If your child is 6 to 11, this is a great time to introduce them to the concept of an allowance, which is a set amount of money they receive in exchange for completed tasks. For middle school aged children, focus heavily on teaching them about the basics of income, budgeting, and saving.

Finally, if you have a high school aged student, it’s time to start teaching them about financial independence. This stage is all about putting the lessons you’ve instilled in them throughout the years to the test. They should know how to create a budget, possibly have their own personal checking and savings accounts, and have a plan for paying for college if they plan on attending.

Pay an allowance for designated chores
It’s important that your child have access to funds in order for them to effectively make money decisions in the future. One way to accomplish this is by instituting a weekly or monthly allowance for your child based on their completion of certain tasks. This is a great way to teach some basic, but smart financial lessons for your child. It’s no secret that most people find earning their own money more rewarding than receiving it without merit, and children are no different! Allotting an allowance for your child can better introduce them to money concepts they’ll carry forward to their first jobs and beyond.

Discuss establishing credit and the importance of borrowing wisely
Teaching your children about money is about much more than just cash. As your children grow older, the money lessons they’ll need to learn will become more complex and elaborate. Older children in high school should know the importance of establishing credit and borrowing wisely. They should know what factors impact your credit score and how, the different types of credit, how credit is reported, and ways to build their credit. You’ll want to express to them the importance of keeping your debt threshold low while also paying all bills on time.

Teaching children how to handle money is important, but it doesn’t have to be overwhelming! Simply start teaching them little by little, while they are young, and watch their knowledge grow. DCCU is proud to support the youth in our community in a variety of ways, from our Minor Lending Program, youth financial education courses for classes and organizations, school education, and more. Our goal is to teach financial responsibility through positive habits that will last a lifetime. If you are interested in learning more about how to start the conversation about money with your children, please click here.