Family Finance: Kids and Money

Teaching Children about Money

Children are not born with "money sense." Children learn about money by example and experience, beginning at a very young age. Parents are an important influence on what and how children learn about money.

Start early in teaching sound money management skills. Begin teaching basic principles of money as soon as children can understand that money is needed to buy the things they enjoy.

Children grow and learn at different rates. It will be frustrating to both the parent and children if parents try to teach money skills or concepts too early. What follows are some general developmental guidelines for you to use in helping your children become money wise.

Elementary School Children

Lessons to use with second and third graders to help them gain an understanding of the basics of money management and develop sound financial habits for life are available in the 4-H project, Making Cents Of It - order your copy here.

Personal Finance for Youth

By the time your children reach high school they need to have learned some of the basics of personal finance. This is the time when they are developing their financial habits that will shape their future. Some of the specific things they need to learn include:

• Creating a financial plan
• Making the most of their money by budgeting or using a cash flow plan
   
• Handling credit and managing debt:
  • Choosing the best card
    Advantages and disadvantages of using credit
    Using credit cards wisely
    Setting a reasonable debt limit
    Consequences of excessive debt

• Keeping their money and identity safe

Banking for Teens

Checking and savings accounts are great ways to help young people learn to manage money.

By teaching your children to manage a checking account, you can also pave the way to good financial habits such as careful money management, paying bills on time and handling credit cards well.

• A bank account-savings or checking is handy for cashing paychecks.
• Writing checks is a safe alternative to carrying cash.
• An ATM or debit card, which comes with many checking accounts, can serve as "training wheel" for using credit cards. ATMs are convenient, but teach your child to stick to your bank's ATMs. Using other banks' ATMs may expose them to hefty fees.
• See also ATM Safety Tips

Financial Planning for College & Career

Education Quest Foundation provides free college planning services. Information about financial aid, preparation tips and colleges in Nebraska. Includes some Spanish language sections.

High School Financial Planning Program
This is a six unit curriculum for high school students to learn about financial planning, budgeting, saving and investing, financial services, insurance, credit, and career choices, from the National Endowment for Financial Education (NEFE).

This article has been written and reviewed by UNL Extension Educators and Specialists.