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Teaching kids personal finance: tips and tricks to get started

April 25, 2023

As a bank, we at bunq believe that it's essential to teach children about personal finance from a young age. With the right guidance, children can develop healthy financial habits that will benefit them for the rest of their lives. Here are some tips to help you teach your kids about personal finance, and why a bunq account can be an excellent tool for their financial education.

Start Early

The earlier you start teaching your kids about personal finance, the better. Children as young as three can understand basic financial concepts, such as saving and spending. As parents, you can take advantage of everyday activities to teach them about money. For example, when you go grocery shopping, show your child how you use coupons or compare prices to save money.

Use Real-Life Examples

Using real-life examples can help children understand financial concepts better. It's always good to teach them about money in the context of their life. For example, you can use their pocket money to teach them about saving, spending, and budgeting. You can also show them your monthly bills and how you manage to pay them on time.

Set Financial Goals

Setting financial goals can help your child develop healthy financial habits. Encourage your child to set a savings goal, such as saving up for a new toy or a special event. Talk to them about the importance of saving money and how it can help them achieve their goals.

Open a Bank Account

Opening a bank account for your child can help them learn how to manage money. Many banks offer accounts specifically designed for children, with features such as no fees and parental controls. At bunq, we offer an easy-to-use account for kids that parents can manage from their bunq app.

With bunq, your child can have their own account that they can use to save and spend money. You can set spending limits and receive real-time notifications on their transactions, so you're always in control. Moreover, our under 18s accounts come with a debit card, so your child can learn how to manage a card responsibly.

Teach the Value of Saving

Teaching your child the value of saving is crucial for their financial future. Encourage them to save a portion of their pocket money or earnings from chores. Explain to them how their savings can grow over time with compound interest. At bunq, we offer competitive interest rates, so your child's savings can grow faster.

Explain the Difference Between Needs and Wants

Teaching your child the difference between needs and wants can help them make better financial decisions. Explain to them that needs, such as food and shelter, come before wants, such as toys and entertainment. You can use real-life examples to show them how to prioritize their spending.

Teach Budgeting

Budgeting is a vital financial skill that your child will need throughout their life. Teach your child how to create a budget and stick to it. Encourage them to track their expenses and adjust their budget as needed. At bunq, you can set up an auto-saving feature that helps your child save a percentage of their income automatically. You can also create custom saving goals to help them budget for specific expenses.

Teach the Dangers of Debt

Teaching your child about the dangers of debt can help them avoid financial trouble in the future. Explain to them how interest works and how it can make debt grow quickly. Encourage them to only borrow money when necessary and to pay off debts as soon as possible. At bunq, we don't offer credit services, so your child can learn how to manage their finances without the risk of accumulating debt.

Make It Fun

Learning about personal finance doesn't have to be boring. You can make it fun by using games and activities to teach your child about money. For example, you can play "store" with your child and use pretend money to teach them about buying and selling. You can also use online resources, such as videos and apps, to make learning about money more engaging.

Lead by Example

Children learn by example, so it's essential to lead by example when it comes to personal finance. Show your child how you manage your money responsibly, such as saving regularly and paying bills on time. You can also involve them in your financial decisions, such as planning a family budget or choosing a savings account. By doing so, you can teach them valuable financial skills and set a good example for them to follow.

Encourage Questions

Encourage your child to ask questions about personal finance. It's important to answer their questions honestly and in a way that they can understand. If you don't know the answer, look it up together or ask a financial advisor for help. By encouraging questions, you can help your child develop a better understanding of personal finance and build their confidence in managing money.

Getting started

Teaching your child about personal finance is one of the most important things you can do as a parent. By starting early and using real-life examples, you can help your child develop healthy financial habits that will benefit them for the rest of their lives. With a bunq under 18s account, you can give your child the tools they need to manage their money responsibly. As a bank that values financial education, we are committed to helping parents teach their kids about personal finance. If you're interested in opening a bunq under 18s account for your child, you can find more information on our website.

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