4 Ways Parents Can Teach Their Kids Healthy Financial Habits

Most parents are very involved in their children’s lives and are committed to helping them succeed. A survey from Pew Research shows that about 71% of parents think their child’s success and failures reflect their parenting¹. The younger you start building healthy habits with your kids, the more likely they are to stick with them for the rest of their lives. A study by Brown University revealed that “routines and habits in children, including household chores and responsibilities, are unlikely to vary after the age of 9.”² With financial health being a major component of overall success, here are four ways you can start teaching healthy financial habits to your kids:

The classic piggy bank

Younger children have a hard time understanding something digital and learn better through something they can feel and touch. That’s why buying a classic piggy bank is a great way to teach the concept of saving and managing money. When your kids have something that they can take ownership of, they’re more likely to get excited about saving their money.

To make the most of the piggy bank lesson, help your child identify something they want to save for and routinely give them coins or dollars to put into their bank. Make a rule with them that no one can open the bank until your goal is met or until the bank is full.

If you want to modernize the piggy bank experience, there are all kinds of digital safes and piggy banks for kids. These digital bank toys sometimes have better ways to engage your kids than a traditional piggy bank.

Start an allowance

Teach the traits of stewardship and build work ethic alongside healthy financial habits by establishing a weekly or monthly allowance with your kids.

Many families create chore charts or assign specific duties to each child for them to do each week in order to earn their allowance. Sometimes parents offer their kids additional chores or jobs to choose from to earn more money.

As your child earns money, walk them through their options for spending their allowance. You could even create a budget with them, making sure that every dollar has purpose and direction.

Open an account with them

As your child gets older and is ready to graduate from a piggy bank to an actual account, it’s important to open a bank account with them and help them understand how managing finances works digitally.

You can opt to get them a debit card and set up parameters in Card Controls in the Southside Bank app to prevent them from overspending or spending in places where they shouldn’t.

Let them plan and budget their own trip

When your child becomes a tween or teen, consider letting them plan and budget for their own trip. Give them a max budget and let them decide how they will spend it.

Be sure to ask them questions to help them make good decisions but try not to get too involved so they can learn from their successes and failures. Part of this exercise is to give them the freedom to fail in a safe place. If you must rush in to spend extra money in an emergency that they forgot to budget for, be sure that they are aware of what you are doing.

Remember to be overly encouraging and complimentary of their plan and enjoy your trip with them!

Conclusion

We want to encourage you to make the most of your time with your kids. With only 18 summers, no teachable moment is too small. The little moments you take with your kids today will set them up for success in the future.

Explore more family resources from Southside Bank at https://www.southside.com/resources/family-resources/.

¹ https://www.pewresearch.org/social-trends/2024/01/25/parents-young-adult-children-and-the-transition-to-adulthood

² https://www.psychologytoday.com/us/blog/school-thought/201502/study-finds-habits-in-children-take-root-age-9