grandfather with grandson showing cash

Are you talking to your kids about money?

If your answer is “not much,” you’re far from alone. According to a recent CNBC survey, many parents avoid discussing financial matters with their children. And a lot of these moms and dads say it’s because they’re not knowledgeable enough or because they haven’t always practiced the best financial habits themselves. But you don’t have to be an expert to show your kids how money works – and if you’ve made mistakes, just consider those teachable moments!

Wondering where to start? Here are five financial lessons you can teach your kids:

  1. Start Smart With the Three-Jar Method

This is a simple but effective way to teach your children the fundamentals of personal finance starting as early as their preschool years.

Help them divide their allowance and cash gifts into three jars marked SPEND, SAVE, and GIVE. You can get creative and decorate the jars together. Then help them decide on some savings goals and discover charitable causes to support that match their personal interests. Whatever’s in the SPEND jar is all they have for everyday treats and impulse buys.

For young kids, the visual and tactile experience of the three-jar method demystifies the concept of budgeting and ingrains good habits that will reward them throughout their lives.

  1. Head to the Bank – Together

Because we can’t keep our money in decorated jars forever, choosing a trusted financial partner is an essential step to financial success. As soon as they’re old enough, help your kids to open their own bank accounts.

Here at Citizens Bank, we have a Student Checking option that’s designed for tech-savvy youth ages 13 and up. Account holders get free eStatements, access to balances and transactions via app or text, a debit card with rewards, and the ability to send secure payments to friends – all while avoiding overdraft fees associated with paper checks. Meanwhile, parents can monitor account activity, establish debit card controls, and set up automatic transfers from their accounts.

Pair that with an EZ Savings account and your kids are on their way to financial independence.

  1. Let Them Earn Their Own Money

A Pew study found that fewer than a third of teenagers held a paying job in the summer of 2021 – compared to more than half of teenagers in most summers from 1948 through 2000. Yet many teens are concerned about being able to live on their own and not having to rely on their parents for support.

When it comes to learning the value of a dollar, there’s no substitute for earning it through your own hard work. Even before they’re ready for a summer or after-school job, kids can become neighborhood entrepreneurs, advertising leaf-raking services to the folks next door or selling ice-cold beverages by the soccer field.

Earning money can also start at home, with kids being given the opportunity to perform extra household chores or childcare duties for an agreed-upon hourly wage.

  1. Chat About Credit

Credit can be tricky – and teens are already worried about it. A recent Junior Achievement study of 13- to 18-year-olds found that staying out of credit card debt was a top financial concern, right behind paying for college and finding a well-paying job.

As your kids approach age 18, when they’re able to get their own credit cards and loans, it’s vital to help them understand the pros and cons of credit. They’ve got to realize that buying something on credit doesn’t mean it’s free. But it’s good to start building credit early, and a credit card can be a useful tool if it’s wielded responsibly.

To make sure your kids learn about credit, involve them in your household discussions and decisions. When you’re shopping for a new car, considering a home improvement loan, or just paying your monthly bills, talk openly about your current means and future goals.

  1. Never Stop Learning

Financial literacy is a lifelong journey – and the more you continue to learn, the more you can provide your kids with advice and encouragement as they take on new responsibilities.

With timely topics ranging from basic borrowing terms to energy-saving tips for homeowners, CB Insights is a great place to start. And if you’re looking for additional free resources, check out the nonprofit American Savings Education Council.

And – as always – if you have any questions about how you and your kids can make the most of your financial futures, our team is ready to help. We’ve served four generations of families across Tennessee, and we’re proud to continue that tradition.