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May 30, 2019

Beyond the Piggy Bank: Teaching Your Kids Healthy Money Management Skills

We cover a wide variety of topics in this blog, but regardless of which topic we discuss, there is always an underlying theme: the value of developing a healthy relationship with money is priceless. Parents are the first financial advisor children meet, but knowing when and how to teach them about money management may not always be intuitive. How young is too young to talk about finances? When should they start saving? How should teens handle money, and what will new college graduates need to know before they enter the workforce? Our experts have a few tips (and tricks) up their sleeves.

The Elementary School Years

Debbie Yearing, Branch Manager in West Scranton, advises parents to plant the seeds of money management when children are in elementary school. “It’s never too early to develop good money habits,” she said. Fidelity’s Teach Your Children How to Save program offers age-appropriate money management lessons to second and third grade students. This is an ideal age to talk about smart ways to spend, and more importantly, save, their birthday money or allowance. Simple strategies such as saving coins and using the coin machine at the bank illustrate the positive impact of a savings plan.

When they’re ready for a lesson in accruing interest, parents may enroll their children in a Green Team Savings plan. They’ll earn interest on funds deposited, and receive a bonus at the end of the year. Anyone under age 18 is eligible, and they can open an account with as little as $1.

Erin Walsh, Assistant Branch Manager in West Scranton, sees the results of these initiatives with her client’s children, and in her own family. “It instills good habits when they’re young, and then when they get to be middle school age, they have a much better understanding of budgeting and paying bills. It really prepares them for a better future,” she said.

Children carry the habits they develop now into adulthood. Jill Valentini, Assistant Vice President Retail Manager, in Dunmore, shared her parent’s philosophy on money management. “My mother and father said, ‘Here’s what you do with your allowance. Part of it goes to savings, part of it goes to spending, and part of it goes to charity’,” Jill explained. “So I had that mindset. I’m not going to say I always practiced that, especially during my college years, but I think that’s an important mindset to have to help build a healthy relationship with money. I can’t tell you how many clients I’ve had who have said to me, ‘if I had only saved money’.”

The Middle & High School Years

Full disclosure: we know you’re likely competing with social media and a bevy of electronic devices to capture just a few seconds of your teens’ and tweens’ attention, but have faith. Albeit brief, those teachable moments will present themselves. When they do, try employing a not-so-subliminal message focusing on setting goals for children between the ages of 13 and 15. “At this point, they need to understand how to set a goal for themselves, and how they will get there,” Debbie said. “Talk to them about what they want to do with their spending money. It may be something that you or I think is very trivial, but it’s important to them, so they need to know how to set a goal and achieve it.”

These conversations are the ideal time to discuss how they might earn some extra cash by doing chores around the house, yardwork for neighbors, or babysitting. “They don’t really have means at this point,” Debbie said. “But they should set goals: ‘I want to go to basketball camp this summer. I’m going to help make it happen. Maybe I’ll cut grass’. They’re participating in reaching this goal. As limited as it might be, that’s ok. They’re getting the concept.”

When Erin’s teens receive money during the holidays, she likes to work a few standard questions into their conversations. “I’ll ask ‘How much of this is going to the bank? How much is staying here? What do you want to buy? And I’ve found that my kids are really pretty good about saving at least some of what they receive.”

Message received. Mission accomplished!

Debbie encourages parents to fight the urge to buy all the “extras” teens may want because teaching them healthy financial habits now will set them up for financial success later in life. “If you’re able to set solid goals and develop good habits as a teenager, you’re going to be ok as an adult. If mom and dad are paying for everything and you never have to think about how you’re going to buy concert tickets or a new outfit because you know they’re going to do it, that’s not helpful. They’re not prepared once they get out into the world.”

And this brings us to another critical money management phase of life: graduating from college and entering the workforce full-time.

The College Years & Post Graduation

It’s important to open dialogue with your child about student loan debt before their freshman year to make a plan. According to CBS News, the average college graduate in 2019 is carrying $33,000 in student loan debt. That figure doesn’t include other expenses they may have, such as rent, auto loans and insurance, credit card debt, and cell phone bills.

Brittani Fenton, Retail Branch Manager, at the Keystone Industrial Park Office, said budgeting is absolutely critical for new graduates entering the workforce full-time. Student loan debt is an important line item on that budget because it’s federal debt that must be repaid. It is never forgiven, even in cases of bankruptcy. Defaulting on these loans will ruin your credit, your wages may be garnished, and your tax refund may be seized.

One of her favorite tips: “Start paying at least on the interest on your student loans now because it accrues over time,” she said.

It’s not always easy, but age-appropriate, open dialogue with your children about finances can make all the difference in their financial futures.


If you’re looking for more information on talking to your children about finances, we’re here to help. Fidelity Bank has multiple local branch offices throughout Northeastern Pennsylvania and the Lehigh Valley, and our full-service Client Care Center is at your service 7 days a week. Call or visit your local branch office today.