Make Your Kids Money-Smart

We teach our kids about academics, sports, and table manners. Yet the subject of money management remains unbroached—and at a monumental expense. The time to teach your kids about money is now, before bad habits set in. Here’s how to do it.

By Sara G. Stephens

I bounced my first check as a college freshman. Despite a semester of personal finance in high school, financial management eluded me. Many years have passed since I opened that cryptic letter from the bank. What did it mean? I didn’t have enough money in my account to cover a $2.50 check to Wings ‘N Things? That couldn’t be right. I still had checks—how could my checking account be empty? And on top of the shame for what I could only be called chicken-wing theft, I had to pay the bank something called an NSF fee, as well as pay Wings ‘N Things a fee for the insufficient funds.

Mired in guilt and confusion, I phoned my dad. He’s a CPA—and probably the most financially responsible person on the planet. I can only imagine what he was feeling—shock and utter disgust, most likely. Undoubtedly, he would have preferred my perpetrating just about any other crime than this dark, financial deed. He warned me that careless regard for money management has a way of spinning out of control, potentially crippling my “credit score” (whatever that was) for life, before I had even made it out of the starting gate. The problem was, it was too late for me. I was out of the house and planted right in the big, messy middle of independence—consumed by the complexities of a new life, the dogged demands of studying, on top of a part-time job at the campus Financial Aid office (ironic, I know). I had neither the time, nor the mental processing power left to absorb yet another lesson, no matter how important it was. Sadly, I see now that my priorities were much misunderstood.

My college years continued with repeated bouts of bad-check writing, followed by the debilitating NSF fees that led to more bounced checks—eventually landing me in the District Attorney’s office. I had also managed to pick up one of those credit cards that banks love to dangle in front of college students who champ at the bit to break free of their budgets and splurge on things they have no business buying. In my case, I was not even living large. I ate a can of Ravioli every day for lunch, chicken wings for dinner (for $2.50, I think I got 4 wings and a smattering of fries). And still my finances were out of whack. It’s a mystery to me even now how this could be the case. All I know is that, by the time I had graduated from college, my credit score had taken heavy fire, and it made the next 10 years of my life much more difficult than they had to be.

My dad did what he could to teach us about managing our money as kids. He gave us our allowance each week, and any amount we chose to drop into our piggy banks, he would match 100 percent. He kept a register for each account, showing us the deposit and how it added up to an increasingly larger amount of savings. This was good stuff, and it taught me about saving. But there is much more to the world of finance for which there were no additional educational tools in those days. Happily, things have changed, and today, many resources are available to help parents immerse their kids in the financial concepts that weave themselves so intricately into our lives, our entire lives.

Here are some things parents can do to get their kids money-wise before bad habits are set, using readily available resources and/or a little time and creativity:

Give your kids an allowance.
What you pay them for—chores, chores done exceptionally well, good grades, whatever—is a personal decision, based on your principles as a parent. The important thing is to give your children actual currency they can use in the real world to learn valuable financial management lessons.

Set up bank accounts for your kids.
Many Houston banks, especially the smaller ones, and credit unions, in particular, offer kid-friendly accounts designed to teach kids to save early and spend wisely.

Primeway Federal Credit Union ( presents several youth banking options. Children 12 and younger can join the BigDogz club and learn how fun it is to save. Benefits include a savings account (but no checking), special offers on certificates of deposit (CDs), a club newsletter, and more. Teens ages 13-17 can join JAM (junior adult members), to get additional financial guidance as they begin working and setting goals for the future. This membership includes a free checking account with ATM card; at age fourteen, kids can open a joint checking account with a parent who qualifies. Young adults ages 18-23 can benefit from a MyFunds membership, which offers helpful financial advice as they begin living on their own. Members enjoy a flexible checking account option and a credit card with MyFunds. PrimeWay Federal Credit Union scholarships are also available to MyFunds members.

Bank of Houston offers student checking requiring an initial minimum deposit of $100.00, and $10 monthly services fees that are waived with monthly direct deposits or if a parent banks with the institution. The student checking accounts include unlimited check writing, monthly image statements, Visa debit card, and free online banking and bill pay services.

Children under the age of 21 are eligible for Kids Count, a program offered by First National Bank of Texas. It requires only $1 to open an account and a minimum balance of $100.

These are just a few examples of local financial institutions with kid-oriented banking options. Check out our website for more:

Set up an investment for your kids.
Surprise your kids with a New Year’s investment—perhaps a stock certificate representing a company that means something special to them, like a favorite video game developer, clothes designer, or toy company. This investment can ignite your kids’ interest in a way that has relevance and meaning to their lives as children. Whether you do this for a birthday or as a New Year’s tradition, this action will serve as investment in your kids’ financial savvy for the rest of their lives. Alternatively, you can suggest to your kids that once their savings reach a certain level, they invest it. Having them go online to research performance and ratings of various investment options is, in itself, a fantastic learning experience.

Help kids set financial goals. 

The next time your kids talk about wanting a toy, clothes item, camp, or vacation, suggest that they save their money and pay for the expense themselves. Like hanging that bikini you want to fit into for the summer, displaying a picture of their coveted item will serve as a pleasant and motivating reminder of their goals. To keep a spirit of encouragement, create a thermometer out of poster board and mark their progress with every dollar saved. The imagery reinforces for kids the very real idea that such items cost money, but that, with diligent savings practice, all goals are achievable.

Open a “Bank of Mom” with kids checks.
Children don’t need checking accounts to benefit from the experience of writing checks. Consider giving your kids an old check book or creating your own checks (go to for some templates). Every time you go to the store, remind your kids to bring their checkbooks. If they see something they want, they can write you a check at the store for the item’s dollar amount, which you will then withdraw from their piggy bank when you get home. Encourage them to describe their check-based purchases in the memo line, as a visual reminder of how they’re spending their hard-saved money.

Have your kids pay the bills.

Rather, your children can help you with the actual task of paying bills. Invite your kid to sit next to you as you pay bills, to enlighten them with the real cost of living. This activity can also serve as a math exercise, if you ask your child to subtract the bill amount from your bill-paying budget or checking account balance. Or she can divide a car loan balance by monthly payment amounts to calculate when the vehicle will be completely paid, freeing up funds for a fun vacation down the road. This is an excellent opportunity to show how paying more each month would pay the debt off sooner and might prompt your kid to think creatively about which other budget items could be scaled back—and with what impact to the household—to make this happen. Have your kid present her budget ideas at the next family meeting.

Use the Internet’s vast resources.
Too numerous to count, I’ve included a few of my (and my kids’) favorites.

The Great Piggybank Adventure ( This free, online game, for all its beautiful animation and fun-with–a-capital-F activities, is deceptively educational—think of it as the Frosted Shredded Wheat of online educational tools. Players get to choose a character, then set a goal (based on the currency of truffles). The player is then presented with a number of truffles, which he pours into the piggy bank (making a delightful coin-clinking sound as it deposits). A trip to the store then allows the player to buy items or to save money and continue the game. The “board” game involves “rolling dice” (another fun animation) and landing on a square that presents a question like, “You have to take cookies to school. Do you bake or buy?” If you choose to bake, you save money and earn extra truffles, which you get to deposit in your piggybank (more fun clinking!) A leaderboard displays high scores among players. Along the adventure, players learn about a variety of financial topics—from saving money to inflation, asset management and diversified investing—in easy-to-understand language and context.

MoneyInstructor ( This website offers online tools and worksheets that help teach kids about everything from how to count coins and save money to how to create and adhere to a budget. A full membership of $29.95 (sometimes tax deductible for qualified educators) gives you access to all the site’s tools. Some of them are also available for free.

Money Milestones for Kids—A Timeline: This is a great tool for grown-ups. As a parent, knowing which age is appropriate for specific forms of learning or knowledge can be a challenge. This website ( taps the brilliant mind of Erica Sandberg, national personal finance expert and author of “Expecting Money: The Essential Financial Plan for New and Growing Families,” to lay out money milestones for every age. The timeline extends from age 3 to 18. Just click on your child’s age to read about his or her financial milestones for that year, followed by fantastic activities that will facilitate learning enriching and valuable financial lessons.

The Mint ( Do you know what the power of 72 is? Backed by Northwestern Mutual Foundation, this website explain the magic—and so much more! The Mint is a font of saving- and earning-related tools, games, and quizzes, with special sections geared for kids, tweens, and even parents. Kids can take the Entrepreneur Challenge, tap a calculator to determine when they’ll become millionaires, and take a quiz to find out what kind of spenders they are. Tweens can take the “Be Your Own Boss Challenge,” try out the Compounding Calculator, and test their Credit IQ with a quiz. And parents can take the “Financial Future Challenge,” “Topics for Talk Challenge,” or the “Daily Opportunity Challenge,” as well as check their financial habits and attitudes. The site also offers a parenting guide, teaching tools, and a parenting blog to fully equip you with what you need to raise your kids’ financial IQ. And it’s free!

These are just a few ideas for how to embark upon the critical lesson for kids that money matters a lot in life, so they need to learn to manage it carefully and wisely. Choose a teaching curriculum that works for you and your family. You can’t go wrong with any of these ideas. The most important thing is just to get started, and to do it now. The alternative is to learn the hard way, as I did.