Teaching your child how to be responsible with money can be challenging, especially when you feel like you don’t know what you’re doing. Erica Roberts, owner and mortgage broker of Parish Lending, lent us a hand on ways to teach children of all ages money mindfulness.

How do I teach my elementary and middle school children about money?

It can be really difficult to teach a very young child the value of money, especially with physical money becoming less and less prevalent with the rise of debit and credit cards. However, having these conversations and lessons instilled in them will help young minds be more careful with their money later.

Learning at the Grocery Store

Where else do we spend most of our time and money these days? The grocery store is a great place to show kids how to budget, spend money, use debit and credit cards, and more. The next time your child really wants something like a toy or candy, explain what the cost means and help them start saving.

“I believe the easiest way to begin showing kids the value of money is to start with their favorite things. Ask the kids what they think their favorite snacks cost to build a budget and then go in the store and see if they were close and have enough to buy their snacks,” advises Roberts. “If not, how much more do they need? Even better, have those kids do a couple of chores to earn the money!”

Get a Piggy Bank

Many children are visual learners who like to see the weight of items to appraise their value, making piggy banks an awesome starting point. However, it doesn’t have to be an actual piggy bank. Having a clear plastic jar can allow your child to see how much money is physically in the jar and begin to attribute value to the cash. 

Roberts understands the use of a piggy bank to be forming the idea of vision casting, a process used to set goals that very young children can grasp. If there is something your child really wants, she suggests printing a picture of the item and displaying it on or around the piggy bank. This item acts as encouragement by having them keep a goal in mind as they save, making little room for impulse buys.

Visit Your Local Bank

The best way for children to learn about money is to see you withdraw and deposit money at a bank or ATM. Additionally, plenty of banks offer financial literacy classes and resources for children of all ages to learn and ask questions. However, you would be surprised at how much banking can be done for children.

Roberts noticed a little-known fact that children can get their own checking accounts at 16 and credit cards at the surprisingly early age of 13 years old with parental supervision. She recommends starting with saving their birthday money in a checking account, and if the credit card is an option parents would like to try, parents can be authorized users on the account since personal credit cards aren’t available until the age of 18. 

Introduce the Idea of Credit

As your child gets older and begins to understand physical money, don’t forget to explain how using borrowed money through credit cards works. Roberts recommends that parents begin talking about credit cards and how to use them at around 13 years old. She understands that there is a certain age that kids can’t understand the idea of using money that isn’t tangible, but that doesn’t mean you shouldn’t start the conversation now.

What about high schoolers?

Many high schoolers are starting their first part-time jobs, making it that much more important that they understand the importance of giving, saving, and spending mindfully through discipline and responsibility.

Put it in the Bank

If your student doesn’t have their own checking account now, it’s time to open one. Even if they’re being paid under the table at their first job, it’s important to have a safe place to store their wage and watch the balance. Besides, this is also the best way to keep an eye on their spending and first taste of financial freedom.

“The first step to using money responsibly is to put it in the bank! I call it ‘fast cash’ when paper bills burn a hole in your pocket. It seems so much easier to spend bills in hand than it is to swipe the card and see the overall balance drop,” says Roberts.

Make Wise Purchases and Practice Patience

Life is boring without a package on the way, yes. However, wisening up and having a personal adage to keep in mind will prevent a lot of unnecessary spending. 

When I’m about to make a purchase, I ask myself if I can afford to buy it twice. If I can’t, I table the purchase for later. Roberts lives by a similar philosophy, that if you can’t buy it right now, it’s okay to wait a season or two until you can, instilling the idea that purchases are not always immediate.

Teaching your child the difference between needs and wants and how to make the most out of a dollar will save them heartache in the long run. Explain that there are smart things that you should spend a lot of money on like need-based items opposed to exciting purchases based on wants.

Grow a Giving Heart

It’s common to get greedy when you get that first-ever paycheck, so teaching your child to give a percentage of their wage to charity or through tithes and offerings can show them the importance of helping others without receiving anything in return.

To do so, Roberts suggests allocating funds for charity as a key component of their budget. She understands that this requires discipline in choosing how funds are routinely used. Help your teen seek out reputable charities and assist them in picking one that resonates with them.

And young adults?

Once they’re in the “real world,” young adults finally have complete control over their money, which can be both rewarding and dangerous. For the ones attending college, establishing and maintaining good spending habits while staying in the green can be challenging. Luckily, you can stand by their side without encroaching on their newfound freedom.

Paying for College

Figuring out how to pay for college is always a difficult and heated conversation. Paying tuition out of pocket can be risky to some students, and applying for student loans is dooming to some. However, there are plenty of ways to make smart decisions regarding payments and loans when caution is exercised.

“My biggest piece of advice would be to never take out more than the amount of the tuition itself through student loans–so many young adults finance their entire college careers including housing and extras through these loans, and it’s a slippery slope that can get out of control quickly,” explains Roberts.

Teach Them How to Budget (Again)

With the added expense of school, car, rent, and more, managing money can be a daunting task. Before your college student begins school, start helping them create a realistic budget. As they enter the adult world, the reality of how the basic cost of living and all their other miscellaneous expenses will affect their day-to-day lives will come to fruition a bit like being hit by a freight train.

Some beginner’s categories to start a budget with are groceries, gas, rent (or tuition and loan payments in their case), fast food, fun, and subscription services. Helping them see how much money they make compared to what they will spend will put everything into perspective.

Cast a Credit Line

Of course, this is the time for your child to finally have their own credit card and the responsibilities that come with it. After helping them choose a good card and get everything set up, make sure they understand that this is borrowing money. 

Roberts suggests starting small by using the card for gas, coffee, or groceries instead of a big spend. She recommends not exceeding 30 percent of the limit and setting up a mindful payment plan. A more serious payment plan would be making weekly or even daily payments to really dull the false illusion of still having money in the checking account for other purchases. She notes that this is a great way to train yourself not to over-utilize debt and to be more conscientious about spending.

Instill Caution, But Help Where You Can

Unfortunately, life is full of cruel surprises that eat up even the heftiest of savings. Everyone needs a little help sometimes, especially as they navigate the cusp of adulthood.

If your student is living away from home during college or commuting to school and work, surprise spending is going to be a big deal for them. Balancing student loans, tuition costs, school supplies, groceries, clothes, makeup, shoes, and transportation costs add up quickly. If your child is in a tight financial spot, it’s okay to help them now and discuss how to avoid going into the red later.