Banking can start in preschool

How old does a kid need to be before she starts learning where money really comes from?

If she’s old enough to ask why your car looks older than her friend’s family car or why she can’t have her own phone or — why, oh, why — can’t you go out to her favorite restaurant every single night (or any of a million other spending-related questions) the answer is probably now.

Or yesterday.

Saving, setting goals early 

To help children learn about money and start building a foundation of financial literacy, nothing beats hands-on education. 

For preschoolers, that might mean a piggy bank or savings jar and a single savings goal.

Kids can draw pictures of the things they’re saving for or you can help them cut pictures out of magazines or print them off the web. Simply attach the picture to the jar for visual motivation.

But even better is to open a savings account with your child at your bank or credit union and help him or her manage it. When is the best time to open an account for your child? As soon as possible, according to Stephanie Musgrove, a business development specialist at Affinity Plus Federal Credit Union.

“The earlier both the parent and child can make saving a habit, the better,” Musgrove said. “Opening an account early on can make conversations about money and financial management a normal part of conversation between a parent and their child.” 

Normalizing saving for kids at a young age can be an incredibly powerful way to encourage them to take ownership of future financial decisions and goal-setting, too.

What ages are allowed?

Financial institutions have to abide by numerous regulations regarding accounts for ages 17 and younger. And that includes rules that require a parent or guardian to serve as a joint account holder in most cases. 

For savings accounts, there’s typically no minimum age required for kids who want to open a joint account. That means you can do it today, no matter your kid’s age.

In fact, some institutions have clubs or programs just for kids. 

At Affinity Plus, the Shazaam Kids Club includes a savings account that comes with a membership card, savings chart and savings register to encourage children to start saving and managing their money early. 

It also offers rewards for each branch visit. Sure, this builds brand loyalty early for kids, but it also helps youngsters better understand money and financial responsibility. (Learn more at tinyurl.com/affinity-mn.)

Wells Fargo has a Junior Account Saver Program with a girl mascot named JJ.

TCF Bank has the Financial Scholars Program for Teens, which uses classroom and online learning to teach complex financial concepts. (See tinyurl.com/tcf-teen.) 

Add checking

Older kids are eligible for checking/debit accounts. 

An adult joint account holder is still required, and many financial institutions also enforce a minimum age for the younger account holder. At Affinity Plus that age is 16. At Wells Fargo it’s 13, and US Bank it’s 14. 

With these accounts, kids get debit cards they can use to make purchases in stores and online. (No more borrowing your credit card to pay for clothes or subscriptions!) 

Musgrove emphasizes the importance of education when teens get their first debit account. 

“It’s incredibly important to make sure youth understand the level of responsibility they must have,” she said. 

That includes understanding the terms and conditions of the account; keeping track of deposits and debits; understanding how a debit card works; taking advantage of any reward systems an account may have; budgeting; and knowing the consequences for mismanaging or misusing an account (think insufficient funds or lost or stolen cards).

Talk about it

What else can you do to develop kids’ financial literacy?

“Be open and allow your child to ask questions about how money plays a role in their everyday life,” Musgrove said. 

You can also get them involved in household financial decisions when appropriate. 

For example, if your child wants to eat out, talk about how much a dinner out will cost — and make that number relevant to her: “Eating out tonight costs the same as going to the movies this weekend, and we can’t do both. Which one would you rather do?” 

It’s also helpful to give kids an allowance so they can learn to budget for things they want and need. This is effective whether you’re using a savings account or that jar with the picture taped to the side.


Eric Braun is a Minneapolis dad of two boys and the co-author of The Survival Guide for Money Smarts: Earn, Save, Spend, Givefor young readers. Send comments or questions to ebraun@mnparent.com.