One Bite At A Time: Teaching Financial Responsiblity

I remember vividly the First Hawaiian Bank in Lahaina; I can tell you the colors of the carpet, walls and the layout of the branch. I was 5 years old the first time I went and even now I can feel the little menehune* savings passbook in my sticky fingers which contained the magical numbers representing my account balance. I remember feeling 'grown up' every time we went to deposit my grandparents' birthday check. Mom unintentionally demystified money for me while creating an excitement for saving every time she brought me to the bank. I also remember vividly the hollow feeling in my stomach 13 years later when I held a bank certified check to pay for my first semester's tuition at my local college. It was satisfying to have saved up that much money but I felt a little sick seeing how quickly it went away. My mom had done three bite size things to teach me financial responsibility: have a savings account and how to use a bank, set small and large savings goals, and open my own checking account.

Pre-School/Elementary Age: Open a savings account with your child. Bring them to the bank and go inside to make a deposit when possible (little kids think money comes from the 'magic wall') for a more tangible experience. At some point, when it's slow and if you have time, talk with the bank employees about one of your child's money questions.

Middle School Age: Encourage your child to set a short term savings goal (iTunes gift card or spending money for summer camp) and an achievable long term savings goal (a bike, I-pod, game console, camera). We had our kids look for opportunities to make money from other sources than the Bank of Mom  & Dad.  Lemonade stands (big success for my kids), lawn work for neighbors, helping friends who are small business owners and mother's helper are all things my kids have done. We also were up front about how much we were willing to contribute when certain goals were met.

High School Age: At 14 and 15 we opened checking accounts for our boys with debit cards. This teaches the basics of spending, how to use a bank, and avoiding over spending (over drafts). We have lots of conversations about spending and having a buffer (not spending everything you have). I didn't do this until my third year in college and am glad my boys will have 'mastered' the management of  a bank account before they go off on their own where the consequences of mistakes have greater ramifications.

What bite sized nuggets have worked in your family to teach financial responsibility?

*menehune is a small mythical Polynesian being usu. pictured as a dwarf living in the mountains and working at night as a stone builder (www.merriam-webster.com)