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Your Life

How to Teach Good Financial Habits to Your Children

It’s never too early to learn financial health skills. Teaching children the value of a dollar at a young age is an important lesson that you can start at home.

Your children learn a lot in school, but are they being taught enough about how to be savvy savers and wise spenders? The value of a dollar is a lesson you can start with them as post-toddlers by showing them the basics of earning, spending, and saving.  Things may get a little more complicated as they begin to make financial decisions for themselves as teenagers. Hopefully, some of those early-learned basics will stay with them into adulthood as they plan their own budgets and set their own financial goals. 

Start early

When your child has learned how to count, you can begin to introduce them to money concepts. Start with a piggy bank or a clear jar – where they can see coins and bills being deposited – to show them how to not only count money, but how to save it. If you take them to the grocery store, explain in a playful manner how much things cost, introducing the most basic of budgeting concepts without going into too much detail and keeping it fun.

Online learning may be an option here as well. Atlantic Union Bank’s financial partner Banzai has free and fun interactive courses for children of all ages and skill levels that may help.

Spending vs. saving

When your child sees that shiny new toy on TV, take the opportunity to help them realize the difference between wanting something and needing something. Your child’s earliest inclinations will be to spend and have you spend for them.

Use the piggy bank or coin jar to show them how easy it is to put money aside, instilling the value of a dollar in them by introducing the concept of saving. Keep it light and interesting and help them to achieve short-term, small goals to illustrate the benefit. Saving money teaches children to be disciplined with their funds – like their allowance or the birthday money they receive from a relative.


Once children are of the age to begin doing chores around the house or mowing the neighbor’s lawn, they should begin to understand their earning potential. Consider paying them an allowance based on their work. Make sure the chores aren’t the sort of daily tasks they should do anyway – assign them projects like raking leaves or cleaning out the garage, for example.

With earned money of their own – whether it’s in a savings account you manage or in their piggy bank – they’ll need to learn how to make the right spending decisions. They don’t necessarily need to start saving for college or to buy a home at this point, but helping them understand what they can do with their earned money is important. Is there a big purchase on their radar like a new bike or an electronic device? Do they have a regular need for cash while out with their friends or friends’ families? This is where they can also learn to budget and put all the basic concepts of earning, spending, and saving together.

Teens and money

By the time children become teenagers, you should begin to think about getting them set up with their own starter checking account and debit card. As much as you can, and at least early on, you should co-manage their account to make sure they are on the right track with their habits. They should have learned enough basics about managing money that they won’t splurge on everything they see and deplete their account. If they do, they’ve learned a valuable lesson on what not to do. To be cautious, you can always keep some of the money they’ve earned in a separate savings account that you still manage.

Teaching them that they can’t have everything they want or what their friends may have will go a long way in showing them the value of a dollar. Once they begin driving, dating, and thinking about higher education or their career, they’ll be faced with a whole new set of financial responsibilities and will want to be prepared.  

All about credit and debt

Aside from saving, one of the most important aspects of financial health is managing debt. For many, if not most, it’s impossible to avoid.
  • Teach your older children about debt and how using credit – and credit cards – contributes to it.
  • Show them how carrying large amounts of debt will impact their ability to save and might also harm them when they need to apply for what might be essential credit (a mortgage or car loan, for example).
  • Explain the differences between what might be considered necessary debt (mortgage, business or student loan) and what some may consider unnecessary debt (credit card).  Later on, you can teach them the importance of a credit score and why it might be a wise idea to monitor theirs and make sure it’s accurate – and that they haven’t been a victim of fraud. (SavvyMoney is a free tool within Online Banking for those with Atlantic Union Bank checking accounts that can help users keep tabs on their credit score and financial footprint). 

Path to a healthy financial life

It’s definitely no simple task to raise and teach children. When it comes to financial literacy, though, instilling in your children the value of a dollar is the most basic element in helping them grasp the concepts of earning, spending and saving.

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