Back to School Money Talks
From allowances to online safety, these five conversations around finances may help prepare kids for the independence that comes with a new school year.
For many families, a new school year means new expenses. Beyond school supplies, there are technology fees, lunches, club expenses, and the daily temptations of vending machines and in-app purchases for kids with access to mobile devices.
Only 25% of U.S. parents who live with children say they talk with their kids about finances, according to Forbright Bank’s recent survey of more than 1,800 U.S. consumers. And as kids start a new school year, it’s a great time to help them build money confidence as they gain more independence away from home.
Parents teach by example, and deliberate conversations about finances can help make all the difference. These don’t have to be formal chats; they can happen while you drive to the store or take a walk. Before your kids return to school, consider having these five money conversations.
1. Where Does Money Come From?
In today’s world, when we complete transactions with a smartphone or a tap of a card, even older kids can miss that money is a real, tangible thing with limits.
Show younger kids the different denominations of bills and coins and teach them how to count and divide money. Give them chances to pay with cash so the transactional element really sinks in. Explain that bank cards and digital wallets connect to real money in a bank account.
Share how your household earns money. If your kids are old enough, give them opportunities to earn some of their own. Consider a small allowance tied to specific chores to demonstrate the link between effort and reward.
2. How Do You Save Money?
Encourage your children to save money as an important step toward security. If your middle-schooler wants to join the group that walks to an ice cream shop after school, consider allowing them to join once they save enough to buy their own cone.
With guidance, school-age kids can set weekly or monthly savings goals. If they want to buy a gaming pass next month, help them figure out how much they’ll need to save to get it.
Teach older kids about the power of compound interest with a savings calculator. They may better appreciate saving for long-term goals, such as buying a car or paying for prom next spring.
3. How Do You Spend Money Wisely?
The foundation of healthy financial habits is learning to tell essentials from nonessentials. Shop with your kids and give them a small allowance to help them weigh their options.
If your kids have access to a mobile wallet for purchases at school or during after-school activities, discuss your expectations for what they can buy and how much they can spend. Show your kids how to monitor their spending in the app or digital wallet and consider placing a limit on the linked card if needed.
Kids who feel pressure to keep up with friends’ spending may need help talking about their budget without embarrassment. It’s easy to say something like, “I’m not going to buy that because I’m saving for the new video game coming out next month.”
4. How Do You Make Smart Money Decisions?
Financial decisions are personal, and it’s a good idea to share yours with your kids. For example, you choose the more expensive laundry detergent because it has fewer harsh chemicals. You buy cotton balls on the two-for-one sale. You go to the farmers’ market for eggs and peaches, but to the grocery store for bananas and milk. Explain your choices so kids see money management in action.
When your kids ask for an item you can’t or won’t buy, give them more insight than a simple “no.” Try “We have other expenses right now,” or “It’s not a wise use of our money right now,” with a basic explanation to help them understand the value of money.
Consider sharing your own experiences with money, both good and bad, to make an impact.
5. How Do You Keep Your Money Safe Online?
Kids are not immune to online financial scams. Scammers may reach out to kids through texts, social media, and gaming platforms, hoping to gather parents’ financial information or use kids’ information to open credit cards or take out loans.
Talk with kids about how scammers gather information. Tell them to come to you if something feels off and stress the importance of strong passwords.
Teach kids to watch out for common signs of a scam, such as:
- Messages or texts from strangers.
- Requests for a fee to win a prize.
- “Get-rich-quick” schemes and deals that sound too good to be true.
- Pressure tactics that rush decisions.
- Instructions to pay with cash, gift card, wire transfer, crypto, or a payment app.
- Personal email domains paired with claims of representing a business.
- Misspelled web links.
- Generic greetings like “Dear Customer” or “Dear Member.”
Back-to-school season is a great time to start — or continue — a dialogue with kids about finances. Keep the conversation going as they gain more independence and more opportunities to manage money. Financial missteps may happen, but more knowledge can translate into fewer, smaller stumbles later down the road.
Disclaimer: This article is for general information and education only. It should not be considered financial or tax advice.