It's Never Too Early to Start Talking to Your Kids About Money

Drop some coins in your piggy banks!

Thursday was Teach Your Children to Save Day. A part of Financial Literacy Month, it is a day to encourage your children to develop good saving habits.

It’s never too early to start teaching your kids proper money management skills. If they are old enough to ask for a toy, they are old enough to start learning how you pay for it.

The Cooperative Bank gave a little financial lesson to some Boston kids at the Parkway Community YMCA in West Roxbury this morning. They read a couple of books with a money-saving theme, handed out piggy banks and a saving-themed coloring book to help them get started.

TCB is launching a financial education program and they will be offering free classes on financial literacy and education to people of all ages. The first was geared toward young kids.

“While it doesn't always seem that they are getting it, they do understand it as little tidbits. It just helps them build a better relationship with money,” says Kate Sullivan, vice president of marketing and communications for TCB. “It helps them understand how parents spend money and how money affects their families. And those in turn will help them and shape their opinions and how they manage money as well in the future.”

Sullivan says it’s never too early to start teaching your kids about money.

“Some of these kids today were as young as three, and they were very engaged,” said Sullivan. “They were very excited to tell me that they had piggy banks. Are they, you know, have some money. And one of them was saving for a pink scooter. So they have goals. They do understand it and just, you know, tapping into that and getting them excited about money in a very child-friendly way."

Parents should look for opportunities to talk about money, play games that center around spending money wisely, and discuss their financial experiences good or bad with their kids.

TCB recommends taking advantage of these teachable moments:

At the bank

• When you go to the bank, bring your children with you and show them how transactions work. Get the manager to explain how the bank operates, how money generates interest and how an ATM works.

On payday

• Discuss how your pay is budgeted to pay for housing, food and clothing, and how a portion is saved for future expenses such as college tuition and retirement.

At the market

• It’s easy to give clear examples of “needs” and “wants” using different kinds of foods at a grocery store. Milk (for strong bones) is a need; soft drinks are a want. Explain the benefits of comparison shopping, coupons and store brands.

Chores and allowances

• Assign chores and give them a monetary value. Discuss ways to budget and divide allowances. Encourage children to set a financial goal, such as saving for a bike, and figure out how to achieve it.

Paying bills

• Explain the many ways that bills can be paid: over the phone, paper or by check, electronic check or online check draft. Discuss how each method of bill pay takes money out of your account. Be sure to cover late penalties, emphasizing the importance of paying bills on time. Explain and show how to write out a check.

Using credit cards

• Explain that credit cards are a loan and need to be repaid. Share how each month a credit card statement comes in the mail with a bill. Go over the features of different types of cards, such as ATM, debit and credit cards.

Browsing the Internet

• While online, explain to your children how valuable their personal information and privacy is to you, to them and to online predators. Discuss the risks and benefits of sharing certain information. Then, as a family, make a list of rules for keeping personal information safe online.

Planning a vacation

• Whether you are planning an outing to a local amusement park or a once-in-a-lifetime trip, emphasize the value of saving as a family. Set a family savings goal that involves your children. Figure out the cost and discuss ways everyone can help to reach the goal.

Teach the 3’s of Money

• Spend - Buying things that we need and want right now. We all do this, but it’s important to balance this with the other two Ss.
• Save - Setting aside money to buy things in the future or bigger items. For example, saving for something you want for your birthday or that video game you’ve had your eye on. Saving also gives you time to think about it and make sure you still want it in three weeks’ time or more.
• Share - Donate money to help people, animals and the environment. Think about what you are really passionate about — say animals — and find an organization you can donate to or get involved in activities that help animals in need. There are so many ways to help — from the homeless, to school children that can’t pay for lunch at school or animal shelters. But it should be something you are passionate about.

Below is a list of six great books (both nonfiction and fiction) recommended by the bank that explain the basics of finance while starting children off on a path of successful money management as they grow.

“How the Moonjar Was Made” by Eulalie Scandiuzzi

Noom (moon spelled backward) and Raj (likewise, jar) become friends and along the way, they learn about how to save, spend and share through the use of a special jar. The book has its own website where children can purchase a “moonjar” of their own. Suggested ages: 2–7 years

“Lemonade in Winter: A Book About Two Kids Counting Money” by Emily Jenkins

This lovely picture book tells the story of two young siblings who use all their money one winter day to buy supplies and open a lemonade stand. What happens afterward is a lesson in counting, spending and earning, and the risks and rewards that come with starting a business. The book’s last page show backs and fronts of coins and explains how much each one is worth. Suggested ages: 3–7 years

“The Go-Around Dollar” by Barbara Johnston Adams

Ever wonder what happens to a dollar bill when you pay for something? It keeps moving on to the next person and the next until, in this case, it winds up somewhere really special. This nonfiction book tracks the complicated path of a single dollar bill and contains a wealth of information about the basics of America’s paper money. Suggested ages: 6 years and up

“A Chair for My Mother” by Vera B. Williams

A Caldecott Honor award winner, this beautifully illustrated book tells the story of a young girl, her waitress mother and her grandmother – who lose everything in a fire. When they move into a new home, the daughter and grandmother save coins (by budgeting food money, among other ways) in a jar in the hope of one day buying a comfortable chair for the girl’s hardworking mother. Themes include saving, budgeting and working together to give someone a gift. Suggested ages: 5–10 years

“Neale S. Godfrey’s Ultimate Kids’ Money Book” by Neale S. Godfrey

This author knows about money and kids. She’s not only a mother and a grandmother, but she was one of the first female executives at Chase Bank. Godfrey has compiled practically everything about finance in one, kid-friendly comprehensive guide. Charts, illustrations, photographs, and bite-sized facts and sidebars make it easy to use and fun to read. A great resource for parents who aren’t sure where to start when explaining things like credit cards, savings accounts, banks, the Federal Reserve and practically any topic regarding the money you can think up. Suggested ages: 5 years and up

“Pretty Penny Cleans Up” by Devon Kinch

One of four Pretty Penny titles by author/illustrator Devon Kinch that wraps money lessons into an entertaining story. When young Emma spends all her allowance and doesn’t have any money left to go to a concert, her entrepreneurial friend, Penny, comes up with an idea (La Perfect Pup Salon) to raise funds for the concert – and for charity too. Many good lessons in here about friendship, charitable giving and why it feels good to earn money to spend and share with a friend. Suggested ages: 5 years and up

The financial education program offered by The Cooperative Bank will be offered in several different languages, free of charge. You can go to their website for more information on how to take part.