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5 Ways to Raise Financially Savvy Kids in An Instant Gratification World

April 11, 2024

Money may seem like a challenging topic to discuss with your children (especially when they are little) but it’s important to start having money conversations as soon as possible. There’s no better place to start than at home!

The best part is, when you first start teaching kids about money, it doesn’t have to feel like a lecture. It can be experiential, fun, and as engaging as you make it. Your goal is to help them develop the kind of healthy spending habits that will turn them into grown-up savers and investors you’ll be proud of.

Let Toys Lead the Way

The experience of buying a toy can be a great way to teach children about money. When you and your child are in a store together and they ask for a toy, you can explain that they’ll need to save their money in order to purchase that item, and that hard work will be necessary in order to make it happen. Then, you can give them a job or chore they can do to earn money to put towards their goal.

It’s important for your children to understand early on that it’s okay — and necessary — to wait to purchase something they want. Everyone in the family needs to save up for their goals. You can illustrate this by explaining to them how you save to buy things you want, too. Look for ways to teach these things in everyday life rather than in a formal setting. These values can be shared while shopping for groceries, or even when buying things online.

Save & Budget

By the time your child is in elementary school and learning more about how much things cost and the concepts of working and saving, you can help your kids open a savings account at your credit union. And by middle school, children should be able to set and achieve financial goals like saving for something specific.

Once kids see their accounts growing, it becomes a self-fulfilling prophecy — they feel confident about their ability to accumulate money, so they become motivated to get more. This can translate to having more self-esteem in their own ability to grow their savings.

It’s also important to teach them the “pay yourself first” rule of personal finance so they know what it takes to gain security and to be self-reliant. When your child gets an allowance, earns a first paycheck, or finds $10 in a coat pocket, their first order of business should be to stash away a portion in savings. (But it’s up to you, mom and dad, to make that happen!) While older children can save money in their credit union account, younger children could put their money in a piggy bank as a visual reminder for saving part of the cash and coins they receive.

And as your children mature, make sure they learn about the life-saving properties of having an emergency fund to fall back on. You can do this by sharing a situation where having a little cash on hand saved you from disaster. A youngster’s “emergency” can be, for example, not having enough money to pitch in for a friend’s birthday gift.

Model Good Behavior 

Teaching children about the importance of saving at an early age allows them to develop good saving habits and grow into financially healthy adults. You want them to have a positive relationship with money. Part of that is how you explain it to them, and the other part is the behaviors that you model. Your child is watching everything that you do. Practicing good financial habits, having an open dialogue with your children about money, and identifying “teachable moments” are all vital to cultivating a strong financial education for your children.

As they get older and start thinking about college or a job of their own, it’s a good idea to talk to them about your investments into funds like 401(k)s, IRAs, and other retirement savings plans. This is an excellent way to show your kiddos the magic of compound interest. The magic is really due to time (which they have plenty of) and patience (which can absolutely be learned). Also, once your child is earning an income with their first real paycheck, you can help them open their very own IRA at your credit union and get them on a path to saving for the future.

Give Real-Life Examples

As we strive to talk more openly about money at every level with our children, it’s crucial to explain the “why” behind family money decisions when appropriate. Don’t make your own financial uncertainties become the reason that money is a taboo topic in your household. All of us learn by example, and we learn even more when others share the mistakes they’ve made.

Why it’s Worth it

Ultimately, teaching your kids about money management extends well beyond just turning them into grown-ups who know how to save and invest their paychecks. It can help build your child’s confidence in a major way.

Saving money is crucial to a kid’s confidence because it’s a skill they can master at an early age. They don’t have to fear it. And when they master it as a child, it’s ‘rinse and repeat’ as they grow older.

If you would like to open a savings or checking account for your child or have questions about your own personal finances, reach out to a Town & Country representative by emailing us at, calling 800-649-3495 or book a consultation here.

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