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How To Teach Your Children Good Money Habits

As a parent, your children mean the world to you. There is no greater joy in seeing your bundle of joy grow up to be confident, successful individuals.

This is why we go out of our way to protect them from the mistakes we’ve made and empower them with the right foundations to live a wonderful life. One great way you can do that is to teach your children good money habits now.

What Are Good Money Habits? 

Let’s be honest, much of who we are and what we do are determined by the habits we have formed. Many of these habits are unconscious, and others are intentionally developed.

Building the right habits will set your children on autopilot to take the right steps when needed. Good money habits are habits formed around having good financial knowledge and practices that keep a person away from financial pitfalls.

And this is important to you as well as to your children. They may only think about money now in terms of a new doll or game console, but money is essential nonetheless.

How Do Good Money Habits Benefit Kids? 

Kids can benefit from good money habits when they learn to both save and earn. 

The Importance Of Savings

You can impart the age-old habit of saving early enough in your children. This will help them understand how money grows and can be accumulated over time.

As children, they naturally expect to get everything they ask for. Learning how to save and creating a routine out of it will imbibe the culture of patience and delayed gratification now to get what they want later.

The Power Of Earning

Money does not grow on trees. You might know that, but a child staring at the latest PlayStation at the shop doesn’t understand why he can’t go home with it.

Good money habits will teach your children the place of work in earning the money they need to do or get the things that they want. Ultimately, you are preparing them for life outside the security you offer as a parent.

They will be better equipped to take on life.

Why You Should Create a Solid Foundation

There’s a popular saying, “The best time to plant a tree was twenty years ago. The next best time is now.” This rings true in building the right foundation for our children.

You may not have gotten a solid foundation as a child, but you can make sure your children never have to face the pitfalls you faced without the right foundation. Think of your children as a building. The foundation will determine just how much weight they can carry.

The strength and depth of the financial foundation you lay will determine how high and how far they can go. In school, children are taught about concepts surrounding finances, and many times they are the ones that will never really matter.

If you could go back in time to when you were younger, you would have a boatload of things to teach your younger self. Guess what! You can now- with your children.

Steps for Teaching Your Kid Good Money Habits

Like all habits, they don’t just appear in our lives, and neither will good money habits randomly appear in your kids. As a parent, there are essential steps you can take to teach your children these good money habits.

Step 1: Starting at a Young Age

At a young age, your children are more impressionable. They are also in the formative stage of their lives.

What this means is, this is the best and easiest time for them to learn things. They can easily pick up on languages, talents, and, yes, even habits.

And as they grow, these habits become a natural part of their lives. This is a great time to teach and embed good money habits in your children.

Step 2: Learning the Basics

Start with Basics. Remember, they are children, and certain concepts will not come easy to them. You can begin with the ABCs of money. And the older they get, you can proceed to more complex concepts.

Step 3: Instill Budgeting & Saving Habits

Show your children how to practically how to budget the money that they have from a young age to instill good money saving habits at an early age. Money is finite, but the things they will need it for are often also infinite.

By teaching them budgeting, you are teaching them how to manage resources effectively. You will also teach them how to set priorities and not waste money on things that do not matter.

Teach them how to save as well. Let them see how the money they keep away is growing and increasing with time.

Teach them how to hold money and not spend it and enjoy the feeling of having money. This way, they will learn that money isn’t only for spending.

Step 4: Give Opportunities to Make Money

Depending on how old your children are, you can create different opportunities within your home for them to earn. Give them specific tasks to perform and offer to pay them for doing it.

When they do it, pay them for it. When they are exceptional at it, pay them more. This is wiring their subconscious in the way they relate to money. 

Can I Open a Bank Account for My Child? 

Another significant step you can take is to open a bank account for your child. This step moves them one step away from using the good old piggy bank to a more formal way of saving and managing money.

Children by law cannot open a savings account on their own. But as a parent or guardian, you can set up an account for them as either a custodial or joint account.

As a custodial account, the savings account still belongs to your child but is managed by you until they turn 18. If you go for a joint account, you and your child will have access to the account, but as a parent, you get to control your child’s actions on the account.

How Old Does a Kid Have to Be to Open a Debit Card/Savings Account?

Typically to open an account, your child would need to be 18 years old and above. This may seem like a bump in the road, but most banks now have bank account policies for kids below 18 to own debit card accounts.

Some banks allow children as old as 12, while others operate with stricter policy. Ideally, from the age of 13-17, you should open an account for your child.

What Are the Benefits of Having a Debit Card as a Kid?

There are many benefits your child can enjoy by having a debit card. They will learn financial skills in having and managing money in their accounts.

It is also a lot safer and easier to handle a card than to carry physical cash around. They will learn how to save and the benefits that come with it.

Also, debit cards are not credit cards, so you never have to worry about them building debts at such a young age.

How Do I Open a Debit Card as a Kid?

As a kid who isn’t up to the 18-year standard, you would be required to work with your parents or guardians to set up the account. As mentioned before, there are several great options available for minors under 18.

Your parents and guardians would be required to provide certain essential details about you, such as your social security number, your birth certificate, and a valid means of identification for your guardian as well.

Where Should I Open an Account for My Child?

The next best question you need to answer is where you should open an account for your child. There are many great options of accounts you can open for your child.

The important thing is doing your research and choosing the best platforms that cater to your needs. Here are five great options you can choose from and the reasons why we selected them.

Capital One

Capital One offers a superb Kids Savings Account that pays interest on any balance in the account. The savings account also comes with mobile-friendly banking tools and a number of great options in creating savings goals.

Best For: Parents looking for secure and friendly banking structures for their children.

Benefits: A well thought out mobile app that simplifies banking for kids and gives parents the necessary control. There is also no minimum balance required, and interest is paid on the balance.

Disadvantages: Their interest rates are quite low, and you would be required to open multiple accounts for multiple savings goals.

Rating: 4.78/5


USAlliance offers the MyLife Savings plan for Kids. It has an interesting bonus for savers who are not yet teenagers on their birthdays annually.

Best For: Parents who also want a checking accounting option for their children.

Disadvantages: Savers who are 12 years or below get a $10 bonus every year. They also provide a pretty high-interest rate.

Pricing: Sadly, they don’t give access to a debit card until the age of 13.

Rating: 4.5/5

Alliant Credit Union

Alliant Credit Union offers a beautiful platform with high-interest rates, zero account fees. They also offer a great mobile banking app.

Best For: Parents who want excellent rates and easy-to-understand banking structures for children.

Benefits: Great interest rates, teen checking accounts offer debit cards available from the age of 13.

Disadvantages: Only accounts with a balance of $100 and above get interests paid on the balance. Your child won’t get a card until age 13.

Rating: 4.3/5


Spectrum offers the highest interest rates nationally for youth savings accounts. 

Best For: Parents looking for long-term accounts and great interest rates.

Benefits: They pay the highest rates in the nation on a savings account, and the account can be held until the age of 21.

Disadvantages: You can have only one savings account per child. 

Rating: 4.2/5

Northpointe Bank 

Northpointe Bank offers basic banking options for your child’s savings account. For higher balances, you can get higher interest rates.

Best For: Parents who have a lot of money they want to keep or save and receive great interest rates for their children.

Benefits: They have an above-average interest rate and do not have a minimum balance requirement.

Disadvantages: There is considerably less value on the account, and the interest rates are more for accounts with higher balances.

Rating: 4/5

Time to Make a Move

Seeing all the benefits of creating good money habits for your children, deciding on the right savings account for your children is important.

Study the options on the table to make sure you get the possible deals for your children. Seek the counsel of financial advisors to assist you in making your decision.