Financial Lessons at Every Age & Stage
by Kelly McCandless
From coins and bills to Venmo and direct deposit, the landscape of even the most basic financial lessons can become pretty complex. What was fairly simple to explain has become rather muddled – but no less important. Teaching kids to be financially literate is a critical part of their upbringing, and it largely falls on parents and caregivers to lead the education.
“Teaching kids about money should start from a fairly young age,” explained Melissa Yackley, Vice President of Stockman Bank. “As soon as they start asking questions or asking to buy things, it’s time to start talking about money.” Breaking down how much something costs and showing a younger child how many dollar bills would be needed to purchase the item can help build a mental connection that things cost money. “The more questions they start to ask, the more you should be answering and growing their knowledge,” Yackley continued.
One of the best ways to teach children is to talk with them about what you’re doing when you spend money yourself. Demonstrating personal habits is a powerful way to start conversations and build understanding.
While financial education is not necessarily a built-in part of the school curriculum, many financial institutions work with schools to bring curated content to the classroom. “At Stockman, we offer curriculum for different ages. These lessons teach students about how to earn money, budgeting, saving and checking accounts, debt, and credit. We talk about identity theft and taking care to protect your information. We cover why you might have rainy-day savings. We keep it age-appropriate but cover a lot of ground.”
These lessons are built by the American Bankers Association (ABA) and offered for use by financial institutions across the country, but each individual banking organization likely has its own offerings for youth. “Stockman offers a Savings Club, which is a savings account for anyone 10 and under. When they open it, they get little gifts, including a coin bank, and throughout the year, they get newsletters and little tidbits from the bank about money and a coupon for ice cream to keep it fun.”
The ABA says, “The best financial lessons are part of everyday experience. Look for opportunities to talk about money, read books aloud and play games that center around spending money wisely. Be open and honest when you discuss your financial experiences—good or bad.”
To start working with your children, here are a few guidelines on breaking it down by age and stage:
Toddlers – Pre-School
- What is Money?
- How do you use it?
- Play Store.
- Keep it fun!
Kindergarten – 2nd Grade
- Explore Needs versus Wants.
Talk about payday and the decisions you make each month:
- What Needs do you pay first?
- How do you determine which wants to indulge?
Set Up 3 Piggy Banks: Spend, Save, Give:
- Decide together how much goes in each bank.
- Use four quarters to illustrate how much goes into each and why.
- Discuss your values around spending, saving, and giving.
Start chores and allowance:
- Age = allowance (6 years old = $6.00).
- Allowance per chore ($0.50 for dishwashing).
- Discuss responsibility, hard work, and earnings.
3rd – 5th Grades
Visit a bank
- Why it’s used.
- Consider opening an account for your child.
- According to the ABA, many banks are willing to offer kids tours (including the vault!).
Set a savings goal:
- Identify the want (video game, new toy, etc.).
- Set a budget.
- Illustrate how long it will take to achieve and how much faster they’ll reach their goal if they save a little extra each week.
Start talking about debt.
- What is it, and when do you take it on?
- Importance of paying it off.
- Discuss Internet Privacy and Identity Theft.
6th – 8th Grades
Get your child a debit card and/or electronic payment method (Venmo, PayPal, etc.)
- Connect the transaction with the reality of spending.
Add to their responsibilities and ability to earn (babysitting, lawn-mowing, dog-walking, etc.)
- Provide guidance on spending/saving/giving, but allow them to make mistakes, too.
- Keep parental controls in place and work with your bank to oversee your child’s account.
- Share where you invest (retirement, education accounts, the Stock Market, etc.) and why.
- If you work with a financial advisor, bring your child along to learn at your next meeting.
- Continue with many of the items above, but with more independence and continued guidance.
Consider setting your child up with a credit card with a very low limit to help build credit.
- It should only be used for things approved in advance (i.e., gas or a monthly subscription).
- Set it to auto-pay the balance each month.
- Talk with them about what happens if you don’t pay it off and why building good credit is so important
Start talking about taxes:
- Who pays them and why?
- How to get help with them.
If you want guidance for your own conversations, connect with your bank. “Anyone can walk into a Stockman Bank and work with a banker to build their financial understanding,” noted Yackley. “We make it fun for children, talk to the entire family, and help adults by answering questions.” You can also find tips posted on Stockman’s Facebook and Instagram. If you want to schedule an appointment for a tour or to meet with a bank, call 406.655.2700 or visit www.StockmanBank.com.
In addition, the FDIC offers excellent resources for all ages and stages. Learn more at https://www.fdic.gov/resources/consumers/money-smart/teach-money-smart/money-smart-for-young-people/index.html.
Financial literacy is a critical skill, and the conversations need to be ongoing to encourage learning, trying new things, and supporting kids through inevitable mistakes. Keep it simple, talk about what you do when you spend money, share your values and invite questions. With a little effort, you’re sure to raise financially savvy kids!
Kelly McCandless is a Billings native who loves a well-planned adventure, being outdoors when the weather is nice, historic fiction and hot coffee. She’s passionate about writing, cooking, education, travel and doing all of these things with her husband Ryan and their two incredible daughters
Raising Financially Savvy Kids
Raising financially savvy kids in the 21st century means recognizing that banking has mostly stayed the same, but technology has made things easier and more convenient. Let's use the tools available in the hopes of starting a generational wave of financial education and responsibility.
Real Estate Realties: The Truth Behind Today’s Market
Billings, Montana, is a desirable place for many to call home, so the real estate market is thriving. With that being said, the market in the magic city has its fair share of challenges as the business is ever-changing. Real Estate agent Sheila Larsen, and Marketing Manager, Riley Cook, give some great advice and insight into the market of yesterday, today, and tomorrow.
The Financial 411: How the Economy Is Affecting REAL People in Billings
Like the rest of the nation, Billings is feeling a financial crunch. Inflation, gas prices, interest rates, home and rent prices, and a low-performing stock market are all interconnected and creating the perfect economic storm. We hear about it on the news, but it’s not just a headline. The economic crisis is impacting real people here in our city – businesses, schools, and families.