PARENTING: A penny saved is a penny earned



According to an Experian review of the first quarter of 2019, the average debt held by Generation Z, those between the age of 18 and 22, have an average debt of $2,057. This constituted an 11 percent increase since the same quarter one year prior, indicating credit card use, at least by young adults, may be on the rise.  

The good news is that those who learn and develop good saving habits early in life are more prepared to deal with what lies ahead and develop into financially responsible adults. 


Begin teaching your child the concept of money, including the values of coins, from the ages of 4 to 6. Keep it simple. Allow your child to earn money to save in a piggy bank for small chores. 


By the time your child is 7, an allowance is essential to learning about money and developing good habits. Familiarize your kids with banking. Open a savings account, so they can watch their money grow. Also, help them set achievable goals, such as saving for a new toy or putting away for holiday gifts.  

Many banks charge service fees unless a minimum balance is kept, as an alternative, set up your own 'family bank.' Give your child a spare checkbook ledger or savings passbook. Then copy blank savings deposit and withdrawal slips from your bank for your kids to use. Require them to fill out the slips and log transactions in the ledger. Also, give your kids monthly interest for their savings so they can experience the immediate reward of saving money.  


Few teens are prepared for the adult world, says developmental psychologist Nancy J. Cobb in Adolescence: Continuity, Change, and Diversity. That's because most teens aren't primed for the responsibility of paying for food, housing, and health care costs. 

Those teens involved with the family budget and who contribute to family expenses learn a valuable lesson. Opting to show teens the spending categories in which they have a direct impact on family expenses is helpful. Also, agree on a reasonable amount in which your teens can contribute to help cover those expenses. It'll go a long way toward preparing adolescents for adulthood. 

Whether teens contribute or not, their working hours should be limited to no more than 10 to 15 per week. According to Cobb, researchers have found adolescents who work, especially 20 or more hours per week, are not as engaged in school as their nonworking peers. Based on various studies, this shortchanges students in the long-term. If you restrict your teens' working hours to ensure success in school, it's good to provide an increased allowance for clothing and personal needs. You can then help your teens to budget their money. 


Help your child develop good saving and spending habits in the following ways. 

  • Allow your kids to make some of their own spending decisions. Place reasonable limits. Then offer appropriate guidance while giving your kids opportunities to learn from their mistakes.
  • Don't loan your kids money every time they want it. But do offer occasional opportunities for them to learn the costs of borrowing and the experience of repaying the loan.
  • Be sure to charge interest on loans, so kids learn the cost of borrowing. Realize, regardless of how financially savvy we raise our kids to be, borrowing does have its place. It's often necessary or practical for acquiring a college education, reliable transportation, and a home. These can be wise investments, even when borrowing is needed.
  • Teach your child how to set financial goals. And don't overlook the importance of short-term goals, which offer your kids a feeling of accomplishment and a boost in self-esteem.
  • Require your child to put at least 10 percent of each paycheck, or allowance, into savings. It'll be much easier to adhere to as an adult if practiced during childhood and teen years.
  • Don't be totally secretive about family finances. Kids have few opportunities to see and experience the financial side of the adult world. This doesn't mean you need, or even should, disclose everything. But it's easier for kids to understand if they can see it in concrete terms.
  • Discuss the different ways you save and invest your own money. Then explain how these different plans work. Point out both the benefits and the risks.
  • Have your kids visit They'll learn about money, goal setting, saving, investing, and more.
  • Try a computer program such as Family Bank by ParentWare to help your kids track their allowances, expenses, loans, and more.

Educating kids on how to use money responsibly is crucial to their future financial well-being.