Good money habits for kidsPosted: Updated:
It is never too early to start teaching your kids about the value of a dollar. But when can you teach your child good money habits? Nancy Tengler from the Arizona Bank & Trust says you should start teaching your child by the second grade to start learning the difference between the "needs" and "wants."
Start your kids young in understanding that money is a tool. For example, at second-grade level, children learn differences between needs and wants, costs and benefits of personal saving.
Open a savings account with your kids at Arizona Bank & Trust. The bank has a kid's "Passbook" program which allows them to track their interest earnings, withdrawals and deposits.
At the seventh-grade level, students learn the different types of personal investments such as stocks and bonds.
At high school level, they learn the advantages and disadvantages of using various forms of credit as well as credit score .
Talk about money with your children. For example, in order to purchase this item, parents need to work 10 extra hours. The brand name costs $10 more than the generic name for the same product. If you want to purchase this, there isn't money for that. Talk to them about choices, that every choice has a cost. Children model after parents' behavior. Set model examples of saving, budgeting and spending behavior.
Adults respond to incentives, so do children. For example, by matching your children's savings or paying an interest on their saving, you give them incentives to develop good money behavior early on. Paying your children reasonably for productive work can teach them that money must be earned. They are not entitled to money.
Arizona Bank & Trust
Camelback Banking Center
2036 East Camelback Road
Phoenix, AZ 85016