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TEMPLE, Texas — Children begin to form their lifelong money habits as early as preschool. Behavioral researchers from Cambridge University encourage parents to start teaching their kids about money as young as three.

Certified financial planner Neil Vannoy says it’s never too soon to work with your children on the value of a dollar, telling 6 News, “You can use piggy banks to help young children start to learn about money. Once they learn the value of each coin, you can have them set aside amounts for giving to charity and spending on fun things like toys now, while teaching them that it’s important to leave some of the money in the bank for the future.”

When your kids become teenagers, try this trick. Write an amount on a piece of paper. Let your child keep the paper, and when he needs the money, he can trade in the paper for that amount, which is waiting in the bank. Your child will see that the money in the bank is no longer there after the check is presented, but that the paper still exists. 

Vannoy said when you have the checkbook out, invite the children to learn, saying, “For older children you can use a checking or savings account to teach them how to balance a checkbook and the importance of saving for a rainy day. Many institutions offer custodial accounts for children that aren’t old enough to have individual accounts, or you could open an account under your name and let your child treat is as if it were his or her own account.”

Also, make saving for a goal a priority, by getting them involved with investments that will affect that child. 

“Saving for college is something that most parents want to do for their children, so why not turn it into a learning experience?,” said Vannoy. “Children that understand bank accounts can relate to 529 plans as a savings account with a specific goal, and you can bring teenagers in on the investment selection process.”

And the saving and investing habits that you stress to your kids, will serve them well for life as Vannoy mentioned.

He continued, “Older children with earned income can set up a Roth IRA to get a head start on retirement planning. And the money doesn’t even have to come from their earnings; as long as they are eligible to make a Roth contribution, you can make the contribution for them up to the maximum dollar amount they’re eligible to contribute. If you want to gift money to your child, but don’t want to dedicate it toward a specific goal, a UTMA custodial account is a great option. These accounts are available at most financial institutions and allow the custodian, which is usually a parent, to maintain control of the assets until the child turns the age of majority, which is 21 for UTMA accounts in Texas.”

Just under 30% of teens age 16 to 19 had jobs in 2020. But that number has shrunk due to the pandemic.  

The share of teens participating in the labor force peaked 40 years ago and has declined ever since. In 1979, nearly 60% of American teenagers were employed, not anymore!

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