Even before they’ve hit their teen years, kids are thinking about money. Specifically, young kids are thinking about how to spend money on the latest apps, games and everything on store shelves. So, teaching your children simple money lessons that will last a lifetime is key. Here’s how you can do it.

1. Show children the value of saving

Give your child a piggy bank for saving allowance and gift money. Or use coin jars and label them as “save, spend, and give.” Help your child determine short- and long-term savings goals.

What if your child is saving for something big, like the latest video game console or the newest toy on the market? That’s when you explain how long it will take to save for that item and show your child how much will be taken out of the piggy bank or jars to make the purchase.

Explain how buying this item now will reduce available money to buy another item later. Seeing how the money is used (and taken away) might make your child think twice about the purchase, and better understand how spending and saving work.

2. Lean on the credit union

Jars and piggy banks can only go so far! Remember, you have the added benefit of your credit union to help with lessons on good money habits.

Help your child open or contribute to a savings account designed for kids aged 12 and younger. Be sure to show your child the monthly statement when it becomes available online and go over the activity in their account.

3. Let your child try (and fail, if necessary)

Show your child how to set a savings goal and let them work toward achieving it. Determine how much your child will need to save from allowance or birthday money, and for how long, to meet the stated goal. When the time comes, if there is not enough money saved, don’t bail your child out! Revise the plan to focus on continuing to save.

4. Be a positive money role model

It’s one thing to tell your kids about the importance of being money-wise. Showing your child that you follow the same rules will leave a better impression.

Let your child help make the grocery list for the week by planning meals and snacks. Once at the store, teach them how to comparison shop. Discuss why you’re buying the $2.50 pack of cookies over the $4 pack. Explain that now you have enough money for ice cream since you’ve spent less on one purchase.

5. Create a money contract

It’s not as tough as it sounds. It’s really about accountability. Having a shared agreement about money between you and your child can help them be more invested in repaying borrowed money or sharing the cost of things.

You can create a simple contract or download ours to get you started. Put it in a visible place, like on the refrigerator, to remind everyone of the commitments you made together. You can even customize it with kid-friendly language and stickers, or drawings related to money. 

It is never too early to share valuable money experiences with young kids. After all, they watch how you interact with money more than you might think. Using these smart money habits can help strengthen your child’s understanding of money management as they grow up.

The advice provided is for informational purposes only and not intended to replace a financial, legal or accounting advisor.