Make Your Child a Financial Superstar

Start kids on the path to money mastery with these age-appropriate tips.

By Navy Federal March 29, 2018

Imagine a teenager who never learned to use his inside voice or a 10-year-old who still doesn’t wait her turn. Life is a little more difficult when you don’t know the basics, and the same goes with financial fundamentals. Teaching kids the basics of finance from an early age can prepare them to make smart decisions that will affect the rest of their lives.

Trying to explain compound interest or proper use of credit to a 4-year-old probably isn’t going to help lay the foundation for a strong financial future. It’s important to be sure the lesson is appropriate for their age. Here are some great ways to teach your kids lessons on finance at the right time.

Preschool (Ages 3-5)

Learning to wait. One of the first lessons your children will benefit from is how to wait for something they want. Whether it’s as simple as waiting their turn in line to go down the slide or saving up for a special toy, teaching young children to accept a delay between wanting something and getting it is important. It can help lay the groundwork for learning to save money.

Try this:

  1. Have your child pick out a toy she really wants. Tell her she’s going to buy it herself.
  2. She can save allowance if you use it, or money from birthdays or other gifts. Consider matching the amount she saves for more expensive toys.
  3. Count her savings together often, so she remembers what she’s saving for and can see her savings grow.
  4. Once she has enough, go buy the toy and congratulate her on her big accomplishment.

School Age (Ages 6-12)

Making choices. At this age, kids are able to understand that resources are finite—including money. That’s why it’s a good time to reinforce the importance of making smart choices when it comes to spending.

Try this:

  1. Involve your child heavily in your next food shopping trip.
  2. Explain your choices as you make them. Whether you choose an item that's comparable but cheaper or prefer a higher-quality item that costs a bit more, it’s important he understand the thought process behind your choices.
  3. After your trip, sit down with him and look at your receipt. Note how the things you bought added up and any areas where you were able to save money. Encourage him to ask questions and make suggestions for your next trip.
  4. On your next trip, let him take the lead in choosing items. See if he can replicate your decisions and give him suggestions to steer him in the right direction.

Teenagers (Ages 13-18)

Using credit responsibly. By this age, it won’t be long until your kids are out on their own, which means they may have credit offers pouring in. Many people make mistakes with credit when it first becomes available to them. During the teen years, consider getting your child a prepaid card to encourage responsible use of plastic.

Try this:

  1. Load a prepaid card for your child, such as Navy Federal’s Visa® Buxx Card.
  2. Explain what sort of purchases she can make with the card and ask her to track her spending.
  3. Once she reaches her limit, talk with her about the choices she made with the card. Was she smart? Frivolous? If she made good choices, consider reloading the card. If she blew through it in a hurry, set new rules and expectations to encourage smarter use in the future.

Smart Money Habits Start Young

Start early to help build your child's financial future. The future comes all too quickly! We can help you introduce smart money habits and ensure you’re preparing your child to become a financial superstar.

This article is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.