Key Takeaways

• • • • • • Leverage an allowance to teach budgeting and saving.
          • Show them how to comparison shop and spend smartly using a prepaid debit card.
          • Have them pay part of shared expenses like phone bills.
          • Let them borrow money for big purchases.
          • Manage everything with a “family bank.”

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    Raising kids to be smart with money now will set them up for success later. The best way to do this is by using real-life situations to teach them smart money habits. Here are some easy ways to start.

    Give an allowance with a purpose

    Instead of picking a random allowance amount, help your child create a simple budget. This will help them learn from their allowance. Talk with your child about things you expect them to pay for on their own, based on their age. Include an amount for regular savings. Help them follow the budget when they’re spending and adjust the amount as they get older.

    Save for emergencies

    Everyone needs money set aside for unexpected expenses. Help your child build a separate emergency fund by setting a goal together, like saving $100 (or more). If they ever need to fix a bike, replace lost headphones, or pay a parking ticket when they start driving, they’ll have the money ready.

    Encourage comparison shopping

    When purchasing a big-ticket item for your child, offer to cover the cost of a budget-friendly or used version. If they prefer a new or name-brand option, they can pay the difference. On the flip side, if they find a better deal than you, reward their smart shopping by giving them the savings. This approach teaches valuable lessons—thinking carefully before buying, understanding that brand doesn’t always mean better, and recognizing that saving money increases future spending power.

    Try a prepaid card

    A prepaid debit card is a great way to teach kids about money before they have their own bank account. Get one in your name and add them as a user. They can track their balance online, practice responsible spending, and even earn “interest” from you for saving. FamZoo*, available through Lake City Bank Digital, is a good option for kids of all ages.

    Share the bills

    Teaching kids to pay bills on time is an important lesson before they leave home. Go over recurring expenses like streaming services, internet, and phone plans together, and decide on a fair portion for them to cover. Having them contribute each month helps build responsible money habits and reinforces the importance of paying bills on time.

    Loan your kids money for big purchases

    When your child wants a big item like a laptop or gaming system, consider lending them the money. Before finalizing the purchase, set up a simple repayment plan based on their allowance or extra jobs. Your kids will learn about paying off debt on time and be more invested in taking good care of their purchases.

    Manage it all with a “family bank”

    Help your child learn about banking by creating a family bank. Use a simple spreadsheet, an app like FamZoo* or other options like these. This hands-on experience makes managing money more real and fun.

    Start now for a strong financial future

    Using these real-life money lessons will help your kids develop good financial habits. The sooner they start, the better prepared they’ll be to manage their own money in the future!

     

    *Terms and conditions apply to using FamZoo. Please read FamZoo’s terms of use agreement here. Please read FamZoo’s cardholder agreement here. Additional fees may apply. Please read FamZoo’s fee disclosure here.