By Hannah Johnson
It’s never too early to teach kids about financial matters. Sure, children aren’t going to understand the ins and outs of a Roth IRA, but small things like opening a savings account with them—even if their total balance is only enough to buy a couple of candy bars—and taking them to the bank while running errands can help foster healthy money habits later in life.
Considering the overwhelming amount of student debt—more than $1 trillion, according to the Consumer Financial Protection Bureau—and the fact that more than a third of American adults didn’t have anything saved for retirement in 2014, according to a Bankrate poll, developing a healthy relationship with money as a child will be beneficial for the rest of his life.
“Research shows the sooner you get to children, and teach them about money and money management, the better for later in life,” said Lourdes Montes-Greenan, vice president, community development banking at PNC Bank in Baltimore.
In an effort to reach kids earlier, PNC has partnered with Sesame Street to introduce the fundamentals of dealing with money. This includes a school curriculum, videos and programs intended for kids as young as preschoolers.
A child in preschool isn’t going to understand the concept of budgeting, said Montes-Greenan, but if you frame it as an option of “for me, for you, for later”—as one of their programs is called—kids will surprise you by how quickly they catch on.
Even the act of putting coins into a piggy bank is a good start to show kids the value of money, and how to save it. Children grasp the concept of spending right away, though, said Montes-Greenan. After all, they see people—especially their parents—do it all the time.
Montes-Greenan encourages parents to get their kids a savings account early on. Even if a child is putting very little money in it each time, it’s the habit of saving that’s important—a habit that will continue long after childhood.
And it’s not only big banks that have child-friendly options. MECU Baltimore, a credit union, has various savings/checking account choices, depending on a child’s age.
The credit union has a Youth Week, where members are encouraged to bring in their kids and start accounts. MECU Baltimore also has online resources for helping parents talk to their kids about money.
As a way to ensure financial matters are being taught—and taught well—in schools, MECU Baltimore was also one of the founding members of the Maryland Council on Economic Education, a group focused on professional development for teachers on providing the best financial education.
Kids can open bank accounts at MECU Baltimore with as little as $5. Dorothea Stierhoff, public relations manager for MECU Baltimore, said that kids often accompany their parents on weekend errands and deposit their dollars at the same time their parents are depositing money.
Credit unions can also offer a more local alternative to bigger banks. Anyone who lives, works, worships or attends school in Baltimore is eligible to be a member at MECU Baltimore.
“But the biggest thing—and I would especially stress it with kids—is that you’re the owner,” said Stierhoff, since a credit union is member-owned. Kids take it very seriously, she said, the idea that, as a member of a credit union, they’re responsible for everyone’s money.
Both Montes-Greenan and Stierhoff stressed that the main takeaway is to just be open with children about money. If it feels like a secret or taboo subject, they’ll never learn the skills they need to deal with money in a healthy way.
Money can be a stressful topic in the best of times, but starting good habits early will make for better money managers later. But parents shouldn’t be too hard on themselves, said Montes-Greenan. No one’s saying it’s easy.
“You also teach them by example,” she said. “[But] don’t be afraid. No one is perfect. All parents make mistakes.”
If it doesn’t feel like a chore, kids will probably do it—and be the better for it.
“It’s something that’s very important, but can also be fun,” said Stierhoff. BC
