Preparing kids to achieve financial freedom is a big responsibility for parents, but there are plenty of ways to help kids of all ages get started with creating good money habits. Staff at SAFE branches love helping families work with their kids on money matters, including opening accounts, making them grow, and using them responsibly.
In a recent episode of the Perfect Cents Podcast, Dominic Davenport, Work Team Lead at the East Sacramento branch, and Louis Mariner, Assistant Vice President of Retail branches joined hosts Brit Kelleher and Alex Becerra to discuss the various ways grown-ups can help the kids in their life get a good start with money.
Tiffany Bryan, Relationship Officer at the SAFE West Roseville Branch adds to their conversation.
Making Good Decisions
Louis suggests talking to kids consistently about money and showing them what YOU do to manage your own finances makes a big difference and that getting kids involved in understanding how to make good choices at the store instills an awareness that they will carry with them for life.
“I love it when our kids go to the store and I'm about to buy something, and they say, ‘No, that's too expensive. We don't need that. Put it back.’ It's fun to play that game when we go to the store.
Podcast host Brit Kelleher says kids notice what their parents are doing. Her mom modeled responsible management of her finances at home when she was growing up.
“My mom showed me that you pay your bills every week and you look at your finances often, and that was the model that I saw. I think that's probably a big part of why I am the saver that I am. So, thanks mom, for teaching me about paying your bills on time.”
Understanding the Value of Money
Participating in purchases helps kids understand what things cost. Helping kids save, and practice spending a little, is a powerful way to learn by doing it themselves. Tiffany shares an example of getting her kids involved:
“Whenever I have loose change, I'm popping it into the kids’ piggy banks, and I can tell that they think it’s rewarding. Like, the ice cream truck came by last week and I suggested my youngest buy us all an ice cream, which got her so excited. Together, we took a little money out of her piggy bank and bought ice cream for the four of us. And she got to see the correlation between wanting something and getting it.”
Dominic advises parents to be aware of the importance of addressing the disparity between what kids may see online versus what they experience in reality.
“Many kids are watching all these YouTube stars with millions of dollars and that isn’t how real life is for average people. So, showing kids the reality of earning, saving, and spending responsibly could make a huge impact on their lives as they grow into adulthood.”
Savings Account Options
Tiffany disputes the common misconception that kids are not old enough to have their own banking accounts.
“It's never too early to open an account for your child. Some may not realize that newborns up to up to the age of 13 actually qualify for a savings account. If new parents have relatives that want to give money, or kids who get money for birthdays, chores, or special occasions, it’s the perfect way to teach your kids how the money they save can really add up.”
Dominic says it’s also worth considering opening other accounts that may be a great fit for your kids, including the benefits of a SAFE Add-On Certificate.
“So whenever someone comes in to open an account for their children or young adult, my mind automatically goes to the add-on certificate. It's super beneficial for the children to save because you can put money into it, but you can't really take any money out.”
“Another thing I like for teenagers 13 and up is the Perfect Cents Checking. With this account, each purchase is up to the nearest dollar. So if you make a purchase for $5.50, it rounds it up to $6 and it'll put that 50 cents in savings for you, so it basically helps you save without saving. And I always tell people at the end of the month, you can transfer the money that was put into the savings, back into the checking, or you just leave it and let it grow.
To hear more on this important topic, including when to start talking about the responsible use of credit, how to start a college savings account, and more, listen to the August 17, 2023 episode of the Perfect Cents Podcast here or wherever you can find podcasts!
To get started on saving with your children (or grandchildren, nieces and nephews, step children, or bonus children), visit a SAFE branch near you. You can make an appointment to sit down with a Relationship Officer to discuss your family’s banking needs.