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How to raise money-smart kids

Give your children the tools they need to become financially savvy.

Good habits start early—and that includes financial habits. While your children are young, introduce them to key concepts such as saving, spending and credit.


Children can be surprisingly enthusiastic about saving. Irene Hatziantoniou of North Olmsted, Ohio, says her son Jacob, age 6, "loves setting aside the money he earns for keeping his room clean."

  • Give your kids their allowance in small bills or change and help them portion it out for savings, spending and charity.
  • Set up a savings account for your child so he or she can learn about deposits, withdrawals and account statements. Once a month, Jacob and his five-year-old brother, Nicholas, go to the bank to deposit their money. Jacob is a saver, with $103 in his account. Nicholas likes to spend his cash right away. He has $19.
  • Encourage older kids to save for college.

Savings Calculators
What does it take to become a millionaire? Knowing how much to save—and where to save it—could get you there.


Teach your children the difference between spending responsibly and buying on impulse.

  • Shop with your kids and teach them to compare prices. If you're with little ones, pay with cash so they can count the money spent. Hatziantoniou brings her sons to an everything-for-a-dollar discount store to make their purchases. That gives them more to choose from in their price range, and they can pay with small bills.
  • Open checking accounts for teenagers.
  • Try teens out on a student debit card — a prepaid account that parents can fund and monitor — and help them learn to use financial tools wisely before they're on their own.

Budgeting Calculators
Use our calculators to determine how much money you'll save by creating a sound budget, postponing purchases, or paying off your credit card balances early.


When your child asks for money beyond the allowance, it may be time to offer a loan.

  • Introduce kids to loans and other types of financial transactions once they understand the basics of spending and saving. "Right now we go to the bank to save money, but in a few years, we'll start talking about borrowing," says Hatziantoniou.
  • If you offer a loan to an older child, develop a repayment schedule together and explain how interest works.
  • Use the opportunity to teach teens about credit cards and how consumers should use them responsibly.

Credit Card Calculators
Use our calculators to figure out how interest rates affect your account and what types of card work best for you.

Did you know?

Fast Fact: Seventy-five percent of the high school students surveyed in the 2010 How Youth Plan to Fund College survey by the College Savings Foundation said they plan to fund part or all of their college costs.

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