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For Your Life Ben Joergens, Old National Bank's Director of Financial Empowerment July 25, 2024

The DO's and DON'TS to Teaching Kids About Money

As the Financial Empowerment Director at Old National Bank, I've seen firsthand the profound impact that parental money habits can have on the financial well-being of future generations. Teaching children about money from an early age is crucial for setting them up for a lifetime of financial success. Let's explore the do's and don'ts for parents. These actionable tips can help you instill positive financial behaviors in your children.

The Do's:

1. Lead by Example: Children learn by observing, so make sure your own money habits reflect the values you want to instill in them. Show them the importance of budgeting, saving, and responsible spending by practicing these habits yourself.

2. Start Early: Introduce basic financial concepts to your children as soon as they are old enough to understand. Use age-appropriate language and activities to teach them about earning, saving, and spending money wisely. 

3. Encourage Savings: Teach your children the value of savings by helping them set up their own savings accounts. Encourage them to save a portion of any money they receive, whether it's from an allowance, gifts, or chores.

4. Set Financial Goals: Work with your children to set both short-term and long-term financial goals. Whether it's saving for a new toy or for college tuition, having goals gives children a sense of purpose and motivation to manage their money wisely.

5. Talk About Money: Foster an environment of open communication about money in your household. Encourage your children to ask questions and share their thoughts and concerns about money matters.

The Don'ts:

1. Avoid Impulse Purchases: Resist the temptation to buy everything your child wants. Instead, use these moments as teaching opportunities to discuss the difference between needs and wants, and the importance of making thoughtful spending decisions.

2. Don't Shield Kids from Financial Realities: While it's natural to want to protect your children from financial stress, shielding them from financial realities can hinder their understanding of money management. Be honest with them about the family's financial situation and involve them in age-appropriate discussions about budgeting and financial planning.

3. Don't Use Money as a Reward or Punishment: Avoid using money as a tool for behavior modification. Instead of tying money directly to behavior, focus on teaching children about the intrinsic value of money and the importance of earning and managing it responsibly.

4. Don't Overspend on Extravagances: While it's okay to indulge your children occasionally, be mindful of overspending on extravagant purchases. Instead, prioritize experiences and activities that foster learning and personal growth over material possessions.

5. Don't Neglect Financial Education: Don't assume that your children will learn everything they need to know about money on their own. Take an active role in their financial education by providing resources, guidance, and support along the way.

Conclusion:

As parents, we have a profound responsibility and opportunity to shape our children's financial futures. By following these do's and don'ts of money patterns, you can lay the foundation for your children to develop healthy and responsible money habits that will serve them well throughout their lives. Remember, it's never too early to start teaching children about money, and the lessons you impart today can have a lasting impact for years to come.

Interested in getting a Student Checking account for your child? Click here to learn how.

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