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Help your kids find their financial footing

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The four steps to finding financial footing

Oh, our kids grow so quickly. Trite, but true. And when they are grown, they’ll need to know how to navigate financial waters. So while they are still in your boat, how can you get them ready for their own voyage? Talk about money. And get them familiar with four financial activities: earning, spending, saving, and borrowing. It’s never too early to start having financial conversations with your kids. The more you can be appropriately transparent about your family finances, and demonstrate money moments, the more they have a chance to learn to be financially independent.

Let’s break down four main money actions kids should learn how to do, and how you can help:

Earn

Giving your kids an allowance affords them the opportunity to learn that money does not, in fact, grow on trees. Some families tie specific tasks or responsibilities to allowances, others don’t. Whichever way your family does it, you can use it as a learning tool. Your kids will begin to understand how it feels to earn, and just how far their money will go. If you want to set restrictions on their spending, be sure to discuss what their allowance can and can’t be used for. Over time, they may graduate to neighborhood jobs like babysitting or raking leaves, and then to a first job outside the house like working at an ice cream shop or summer camp.

A young boy working at the grocery store

If you are doing a chore-based allowance, be sure to discuss the tasks that should be completed before the allowance is paid. You may not want to associate all expected household chores with the allowance, so that if a kid doesn’t care about earning money (yet) or gets a job outside the house, they still will pull their weight in the household. And maybe, just maybe, they’ll clean their room. For some ideas about age-appropriate chores and jobs, check out this blog post!

Any way your kid earns, Till is there to help.

And buckle up for the very real possibility that your kid may burn through their allowance and ask for more. Stay strong, people. It’s difficult, but they should learn that money is finite. From time to time, a kid may have a goal in mind, or may want to increase their earnings, so, if you’re up for it, think about some extended tasks they can complete to earn more (just as long as they save time for homework).

Any way your kid earns, Till is there to help. You can pay their Allowance with the Till app, and set an automatic payment schedule, or pay for specific Tasks they have completed. With money in your Parent Wallet, you can do a Quick Give, or instant transfer when needed. For those neighborhood jobs, they can be paid via a community member payment, and when they have that first job, their employer can even deposit their pay into their Till account.

Spend

Let’s take the stigma out of spending. We spend every day on things that are necessary, and not so necessary, and since it’s impossible to avoid, how about shining a light on it? If you show your kids your everyday finances, and involve them in your own budgeting, they have a chance to understand some of the tough choices that have to be made, and how they can make wise decisions.

A family viewing a laptop together and talking

Next time you pay bills, have them sit with you at the computer for a few minutes and explain your budget. Show them how your budget breaks down, where the money comes from, and where it goes. In addition to sharing your spending, let your kids learn by doing by making their own purchase decisions. Find more ideas on how to help your kid learn about spending with Till.

We want our kids to feel empowered about money learning.

Help your kids establish a budget of their own, and have them stick to it for a month. At the end of the month, take a few minutes to collaboratively review their spending history on the Till app to see where their money went. How did their budgeting go? How could they have done better? It’s important to keep the conversation shame free. We want our kids to feel empowered about money learning.

Let’s talk about a possible monster in the closet–modeling good behavior. Maybe you aren’t talking about money with your kids because you don’t feel particularly savvy about it. Well, when we become parents, we learn things we never thought we would: the names of all of the members of the Paw Patrol, where pandas sleep, or that rainbow unicorns are very, very important. So, here’s your chance to learn about money. Learn together. Take your own shame out of the equation.

Save

It’s important for kids to learn to save. When you talk about a budget, ask them about the things they want, and let them take the lead on how much they want to put away to save for it. You can help with the calculations if needed. With the Till app and debit card, you can collaboratively set savings goals, and kids can practice independently. You can both track progress, and discuss the results of their efforts. Start the habit early, and when they are able to put some money aside, check in about how satisfying it feels to watch their savings grow.

Discuss how they can increase their allowance, like finding extra tasks that could be done for more money. It’s easy to pay for specific tasks with Till. You could also incentivize savings by offering to pay a bonus or by matching funds when they hit a savings goal.

Borrow

While it’s a nice idea to not be a borrower, in today’s world, it’s pretty necessary for most folks.

There’s that old saying–neither a borrower nor a lender be. Shakespeare was wise, but he may not have had to send his kids to college. Or buy a house. And he definitely did not buy a car. While it’s a nice idea to not be a borrower, in today’s world, it’s pretty necessary for most folks.

Young kids think in the present, and money is abstract: it comes out of the air and magically replenishes itself. So when kids want to borrow money, they may not have any actual way of paying it back. And older kids may not connect the actual amount of burden they are embracing. It’s important for kids to understand how borrowing works, but they may not really practice it until they’re older.

If your kid seems mature enough to practice paying money back, you could set up a small loan, and then sit down and discuss a payment plan. Will it be paid weekly or monthly? How long will it take to pay back? Will there be interest? It’s a low stakes way for them to learn the valuable skill of repayment.

A young man thinking about college

The biggest financial decision you and your kids may face together is the cost of an education. Start talking about this early. Do a little research on how much college costs. Have a conversation about student loans, interest, and how long it may take to pay it back. Raise awareness of the real numbers so you can both go into this major decision with open eyes and a clear idea of future financial responsibilities for both of you.

Make finances a family activity, and you’re putting your kids in the best position for fair winds and following seas, while giving them the ability to tack to calmer waters when necessary.

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Banking services provided by Coastal Community Bank, Member FDIC. Till accounts are FDIC insured up to $250,000 per depositor through Coastal Community Bank, Member FDIC. The Till Visa Card is issued by Coastal Community Bank pursuant to license by Visa U.S.A. Inc. Apple®, App Store®, and iPhone® are registered trademarks of Apple Inc.