Not sure how to teach your kids about money? Here’s where to start

If your child has something that they’re saving up for, you can offer to lend them money to achieve their goal faster, with the catch that they’ll be on the hook for interest if they don’t pay you back by an agreed-upon date.

On the flip side, you can use your child’s allowance to show them the power of savings interest. At the end of each month, sit them down and count up their savings. For every dollar they’ve saved, give them a penny or a nickel in interest.

3. Open up a kid-friendly bank account

Once your kids have been earning an allowance for a few years and have a solid understanding of the basics, it’s time to give them the responsibility of their own bank account.

After opening a new account for your child, it’s important to sit down with them every month to discuss how it’s going — how much they’ve spent, how much they’ve saved, and how much they’ve earned in interest.

If they’re prone to dropping too much at certain stores, some starter accounts will let you put restrictions on where your child is able to use their card.

You can also put a spending cap on your child’s account when they’re first starting out and then increase their limit over time. There are a number of account options available for first-time bankers, but you’ll likely want to find one that allows you to help your kids manage their money for the first few years.