Children often dream of the day they can call themselves grown-ups, but few look forward to – let alone think about – the financial realities of independence. It’s never too early to start teaching your children how to save money and spend responsibly.

“As parents, our job is to set our children up for success,” Bank of America’s Head of Deposit Products Erin McCullen said. “Giving our kids a strong foundation of financial skills like budgeting and saving is a key part in ensuring they thrive as adults and can concentrate on the things they love.”

Consider these financial tips from McCullen:

Establish a budget. Budgeting is a lifelong skill. Teaching young adults how to budget can help them plan spending, save money, create goals and address financial anxiety. According to a Bank of America survey, 52% of Americans said they didn’t start budgeting until they began their first full-time job.

If your kids are on the younger side, they likely don’t have a steady income, but you can still help them practice budgeting with allowances or gifts from relatives or friends. Keep it simple: teach them to track the money they receive and separate it into spend-now and spend-later categories.

Later, when you’re helping your kids create an adult budget, you’ll need to expand those categories to track expenses like housing costs and groceries. From there, measure these categories against their total monthly income. Ideally, they should have more money coming in than going out. This process can help identify must-have vs. want-to-have purchases while highlighting areas to cut back on spending or finding room to save.

Save regularly and consistently. Making consistent, automatic contributions to a savings account can create a mindset that will be valuable as your children get older.

“It is never too early to open a savings account,” McCullen said. “Even if your children don’t yet have any bills or financial obligations, teach them to set aside some of the money from their allowance or even gifts from family or friends. Helping children learn to save early-on, even for a small purchase, can help them develop a consistent savings habit over time.”

Young adults should also consider programs like Keep the Change, which helps build savings automatically by rounding up debit card purchases to the nearest dollar amount and transferring the change from a checking account to a savings account.

Make a finance checklist. Young adults have a lot on their minds at the end of their final semester at school. As they begin to transition from student life to the working world, one way to help them stay on track is to prepare a checklist of things to do before they graduate and start their jobs.

This list can include creating a budgeting and tracking strategy, opening a savings account to begin setting aside money from future paychecks or checking in with a financial planner to discuss transitions and what’s to come.

Taking time now to teach your children strong financial habits can help them develop lifelong financial skills and prepare them for their next adventure. The healthy habits they build today can help carry them to tomorrow and beyond.

Emphasize the importance of safe credit. Young adulthood is the right time to begin building credit because establishing good credit takes time. Building credit from a young age can help pave the way for major purchases and life moments, since credit impacts future living arrangements, the ability to purchase a car and even employment opportunities.

Teach your children about the steps they can take to start building credit like planning their credit card usage, never spending outside their means and paying off their credit card bills on-time and in-full. They can also earn rewards while spending by ensuring their credit card rewards their spending. An option like the Bank of America Customized Cash Rewards card offers flexibility to earn rewards in the category of your choice and can help maximize rewards while building credit.

Financial Lessons at Every Age

From preschool through college, every stage of school is designed to prepare kids for life-long success, but learning about finances is one area that can be especially impactful for children in the long term.

Consider these ways kids can learn about money throughout childhood as recommended by the experts at Bank of America:

Elementary School – Focus on basics like saving small change and planning how to spend it. As kids begin to learn fundamental math, you can introduce them to the concept of making a spending plan. Apply these lessons to toys or gifts they want and teach them to set aside money until they have enough to buy the toy of their dreams.

Middle School – Those early mathematical lessons around spending can be expanded to include real-life decision making and budget creation, including what should be accounted for and considered before making a purchase. Before children go to the mall with their friends, highlight the thought process involved in spending before they make impulse purchases.

High School – As adulthood begins to draw nearer, it’s worth exploring the fundamentals of credit scores, credit cards, investing, saving for retirement, homeownership and more so that, upon graduation, teens can start putting those lessons into practice. High school seniors should also educate themselves on student loans, as debt often becomes a reality for those who attend college, and understanding the facts can help them make more informed choices.

Bonus tip: If your high schoolers have jobs, even if it’s just part-time, it can be helpful to discuss taxes and how to manage receiving consistent income. It can guide them in creating balanced and accurate budgets in the future.

College – Build credit by opening a credit card account to help achieve goals later in life, such as purchasing a home. With a career just a few years away (or less), college is also a smart time to begin reading into the basics of 401(k)s, starting an emergency fund or even learning the basics of investing.

Find more tips for teaching your children financial skills at BetterMoneyHabits.BankofAmerica.com .

 

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