Skip Header
U.S. flag

An official website of the United States government

FDIC Consumer News - Summer 2018
25th Anniversary Edition

[2015] From Preschool to College: Teaching Young People About Money

mother and daughter looking at a computer screen

Excerpted and updated from “For All Ages: Teaching Young People About Money,” Spring 2015.

It's never too early or too late to introduce everyday financial concepts to a young person. Here are tips from FDIC Consumer News to help parents, guardians and caregivers show a child — from a preschooler to a college student — why and how to become responsible with money.

Engage in regular conversations about money-related topics. Discuss with your child what you are doing, and why, when you manage money at home, around town or with the bank. For example, consider talking about similar products that have noticeably different prices at a store, and how you decide what is a good deal. You can explain that having a savings account at a bank has advantages such as income from interest, peace of mind of knowing the money will be there when you need it, and FDIC deposit insurance coverage for each customer up to at least $250,000 if the bank fails.

Consider giving an allowance as a teaching tool. It can be a positive way to teach children, even those who are preschool age, about money management. There are many approaches to giving an allowance, including whether to tie it to work such as household chores, so each family will need to decide what is best for them. But before you give the first allowance, help your child decide how much he or she will spend now and how much to save for future goals. Also talk through the tradeoffs involved with spending decisions, such as how buying one toy may mean foregoing the opportunity to purchase another item the child also wants. And for younger kids, consider paying an allowance in smaller denominations to make it easier to learn counting skills.

Help your children develop a healthy skepticism of advertising and unsolicited inquiries. In general, teach them how to analyze advertisements; they need to know that “special offers” often are not the great deal they appear to be. Even young consumers are targets for identity thieves and among the victims of scams and rip-offs. Information for parents is available at the Federal Trade Commission website.