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Special 10th Anniversary Edition - Fall 2003

Teaching Kids the Financial Facts of Life
Ideas for raising financially responsible children

We try to teach our kids to be street-smart, musical, athletic and even computer-literate. But teaching them the value of money can be more difficult than getting them to clean their rooms. Experts who specialize in money matters for children generally agree on the need to teach them "the three Ss:"

  • Saving. Putting some of their money aside so it's there to protect them in the future.
  • Spending wisely. Living within their means and being educated consumers.
  • Sharing. Being generous and charitable.
FDIC Consumer News offers the following suggestions:

Give an allowance.
This can be one of the best ways to teach kids, even as young as five or six, about money, taking pride in their management skills, and becoming more charitable. Consider giving the allowance money each week in small bills or coins that can be apportioned into three clearly marked envelopes or containers — one for each of the three Ss. Help your child start a savings account or invest in a mutual fund or stock. You may also want to consider rewarding your child for sticking to a savings plan by matching or adding to the child's contributions.

Encourage the right kinds of "child labor."
Jobs can teach kids to be responsible and to enjoy earning and saving money. One way is to pay a child for extra work around the house — the kind you might hire someone else to do.

Play "show and tell" while you manage your own money.
Examples: Take your child along to the bank or as you shop for the best values in everything from clothes to cars. Or, when using your credit card, explain that it's important to pay your credit card bill — and all your bills — on time. Around the house, let your child perform simple tasks associated with preparing deposits or investments, paying bills or balancing the checkbook, sending off a complaint letter to a company or consumer protection agency, or stuffing checks into envelopes for charitable contributions.

Excerpted from "Teaching Kids the Financial Facts of Life," Winter 1997/98.

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Last Updated 12/12/2003 communications@fdic.gov