Money & Career
How to Teach to Your Kids About Money
11/1/2020 1:00:00 PM

Learning wise money management should begin in childhood when life-long habits and mindsets are most easily formed. Chris Foster, Senior Vice President of Lending at Merchants and Farmers Bank, has seven children at home. "It’s going to be important to include our kids in conversations about savings and other aspects of money management because we want that to be a normal part of their lives.”


Here are seven tips to help your kids establish a firm financial foundation.


Talk openly—and equally


When teaching kids about money, speak openly, and equally with both your girls and boys. Studies show that parents are more likely to talk to girls about household financial topics like budgeting and to boys about more sophisticated topics like long-term financial planning and investing. Ensure you have the same money conversations with your daughters and sons—whether it’s about paying for groceries or saving for retirement.


Get kids involved


Taking a trip to the store? Even a young child can learn to handle money, comparison shop, and choose between a need and a want. Planning a family vacation? Get everyone involved in a cost analysis and savings plan. Have a teen headed for college? Teens should be aware of the costs and how they’ll be covered—including possibly contributing some of their own earnings to a college account. 


Make equal pay for equal work a given at home


Women still earn only about 80 cents to a man’s dollar, and often that pay gap begins at home. If you expect your kids to earn their allowance by doing chores, pay an equal amount for equal work. Don’t divide chores by gender (i.e., girls clean the kitchen, boys mow the lawn) and don’t value one type of work over the other. Help your daughter gain confidence to negotiate a fair salary in the future by showing her at an early age that a job well done has the same value no matter who does it.


Give kids financial responsibility early on


Once kids have money of their own, they should learn how to manage it. Schools often don’t include financial education as part of the curriculum, but you can teach this at home. "My wife and I have built money management into her homeschooling curriculum and an old-fashioned piggy bank is actually a great tool,” adds Foster.


Start by having young kids set aside a portion of their own money for something special. Later, open a savings account in their name, and teach them to deposit a percentage of allowance and gift money into the account. Watch the balance grow together. Encourage your older kids to get a part-time job and encourage responsibility for sharing the cost of some of their own expenses. When it comes time for big-ticket items like a car, include your kids in the process from researching to financing. These are real-world situations that everyone needs to learn to navigate. 


Set a good example

Kids learn as much by what we do as what we say. The example you set, consciously or unconsciously, will send a message about how we spend, save, and invest. The kids will notice.


For more information, call Merchants & Farmers Bank at 337-479-2086 or visit them at 4091 Nelson Rd, Lake Charles, Louisiana 70605, https://www.merchantsandfarmers.com.

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