April is one of a banker’s favorite months, as it includes Teach Children to Save Day, a day dedicated entirely to teaching kids not only why saving money is important, but also how to do it. Here at Availa Bank, we know financial literacy is one of the most important parts of a child’s education. As they learn and grow, they’ll continue to use those financial literacy lessons to become financially competent adults.

It's a growing problem in America: over 1 in 3 Americans are financially illiterate and many more are actually overconfident in their abilities, falling more into the financially illiterate category than they originally thought. You can break that cycle with your kids by starting early and being open and honest with all discussions on finances in the home.

How can I talk to my young kids about saving money?

Even if your kids are pretty young, you can still find opportunities to teach them about the importance of saving.

To start:
  1. Explain the difference between spending and saving.
  2. Explain why they should want to save money (ex. vacation, toys, clothes, food, etc.)
  3. Give them play money to practice “paying” for items and “saving” in the bank.

Modeling these behaviors can help them see the importance of saving before they even have money to save.

How do I put savings lessons into action?

Once you’ve developed a strong foundation on what savings are and why they’re important, take your examples into the real world!

  1. Giving them a small allowance or money for chores. When you give them their first “paycheck” also give them a piggy bank to put their money in.
  2. Developing savings goals with your kids. Ask them what they want to buy and explain the costs involved with those items. Create a simple chart to help them keep track of their saving progress and keep them motivated.
  3. Once they reach their goal, take them to the store to get their prize. OR, you can also use this as an opportunity to teach them about savings accounts at the bank and how that money can gain interest to buy something even bigger or better!
  4. Once your child has saved up enough money, you could also take them with you to open a savings account for them at Availa Bank. Just talk to your local banker for more information.

Helpful Tips When Talking to Younger Kids About Saving

  1. Always try to relate your lessons to real life examples. Give them something physical to hold, like coins or other objects. Take your kids with you to the grocery store to see how you choose items and pay for them, including price comparisons or deciding to use cash vs. card, etc.
  2. Use examples in your own home to teach your kids about saving money, like turning off the water when you’re brushing your teeth, turning off lights in rooms you’re not using, or waiting until there’s a full load to wash before doing laundry.
  3. Take your child with you to the bank. Introduce them to the tellers and encourage them to ask questions. The more comfortable they are in a bank setting, the easier it will be for them to establish a banking relationship as an adult.

How can I talk to my middle and high school age kids about saving money?

If this is the first time you’re talking to your kids about money, it may be helpful to give them a brief rundown of the basics: budgeting, credit, loans, etc. Even if you haven’t really had much of a conversation with them about money yet, it’s important to start somewhere. Something as simple as knowing the definitions of these terms can give your kids a leg up when it comes to their finances.

You can:
  1. Teach them about the general cost of living. Explain what a mortgage is and what it costs. Show them what you pay each month in bills (Utilities, phone, car payments, credit card payments, etc.) Ask them to try budgeting on their own using your real life example.
  2. If they have a part-time job, explain their paycheck to them, including taxes. Explain how direct deposit works and the importance of setting up a checking and savings account.
  3. Start talking to your kids about colleges. Explain how each college (Community, Trade, Private, State) has a different price tag and how they’ll want to consider their options before committing to the fanciest “name brand” university if that isn’t what meets their needs. Explain that college loans can be significant and shouldn’t be taken lightly.

How do I put savings lessons into action?

  1. Explain (and show) your kids how direct transfers work. Make sure they know that they can move money into savings at set times so they don’t have to worry about remembering to deposit money into savings each month. It can be done automatically.
  2. Make sure that when your kids are ready to open their first bank account, you go with them to make sure they feel comfortable and confident asking questions. You can be the model to show them how to interact with bank staff and ask the important questions.
  3. Ask your kids to develop a savings goal and a target. Whether they’re buying their first car, going to a concert with friends, planning a spring break trip, or just want to buy something nice for themselves, explain the importance of developing a savings timeline and a target date to reach that goal. If they miss the deadline, you can use that as an important lesson in discipline.

Helpful Tips When Talking to Middle & High School-Age Kids About Money

Middle and High school-aged kids are starting to learn more and more about how the world works. They’re training to be adults and will be experiencing new things on their own very soon. To help them not feel overwhelmed or “babied” by your advice, remember:

  1. Never believe that any financial topic is “common sense” and doesn’t need to be covered. School curriculums can vary wildly and your child may not have come into contact with a certain concept, even in their middle or high school years.
  2. Be ready for lots of questions about finances. Try to be as open and honest with your kids as possible and give real life examples using your own financial situation. Encourage them to be curious and let your local bankers help when you don’t know the answers. We’re here to help!
  3. Try to find budget templates online to help them practice managing their money. Fill it out with them using your own financial information to show them how you manage your money.
  4. Let them know that it’s okay to make mistakes early on, as they’re still learning and figuring out what works best for them. Give them space to learn from those mistakes, while giving support when needed.

In Conclusion

You may not be an expert in the financial world, but you don’t have to be to teach your kids the importance of saving and managing their money responsibly. The more knowledge they have at a young age, the more likely they are to make smarter financial decisions as they leave the house. If you aren’t sure where to start, reach out to your local banker! We have a comprehensive financial education platform for all ages and can help point you in the right direction, whether it’s guiding you to attend one of our upcoming presentations or providing helpful resources for your child. Give us a call, fill out our online form, or stop by the bank to learn more!