Introducing Financial Literacy to your Children

In today’s fast-paced and ever-changing world, financial literacy is more important than ever. In a recent study by Bank of America, research found with today’s high cost of living, almost half of Gen Z is still financially dependent on others. While financial literacy is an important everyday skill, school curriculums have only recently begun to incorporate basic course learning. Michigan is one of the select states that requires students to take a financial literacy course for high school graduation.

Many parents and educators struggle to find the best method to introduce financial learning in ways that will resonate with young minds. We believe that fostering financial literacy at an early age, with age-appropriate information, is key to building a generation of financially responsible individuals.

Here are a few tips for introducing financial concepts to children to set them up for a lifetime of informed, confident decision-making.

Start Early

One of the best ways to ensure children develop strong financial habits is to introduce basic concepts of money and budgeting as early as possible. Even at a young age, kids can begin to understand simple ideas like the value of saving versus spending. Begin by explaining where money comes from, why we need it, and how it can be exchanged. Using age-appropriate language, such as talking about "saving for something special" or explaining how "buying today means you can't buy other things until you have more money," can make these concepts relatable.

Incorporate Financial Education Gradually into Everyday Life and Lead by Example

The best way to teach kids about money is by incorporating financial lessons gradually into everyday activities. Situations—like shopping for groceries, setting a budget for a family outing, or even saving for a toy—offer perfect opportunities to discuss money. Teaching your child with a hands-on approach during real life events offers them practical understanding without the need for formal lessons.

Utilize Community Resources and Programs

Fortunately, many organizations and programs offer financial literacy resources to help children, families, and schools teach financial education. In Detroit, Bank of America partners with several groups and organizations to provide Better Money Habits Workshops for students and young adults, including Detroit Public Schools Community District, Focus: HOPE, Community & Home Supports, Inc., The Green Door Initiative, Marvelous Lifestyles Outreach, among many others.

Check with your financial institution to see if they have products or other resources that make it easier to introduce financial literacy skills to your children. For example, Bank of America recently launched SafeBalance Banking® for Family Banking, a bank account that offers parents the tools and resources they need to help their children practice healthy financial habits and learn to manage their money through a convenient, secure digital experience. The accounts can be opened via Bank of America online banking or the mobile banking app and allow parents to maintain oversight of their child’s spending and supervise the account while teaching your child the responsibility of managing a physical debit card.

Financial literacy is a vital skill that can set children up for a successful future. Let’s work together—families, educators and community leaders—to prioritize financial education and help children build the foundation they need for a lifetime of smart financial decisions.

Tommy Ziadat is Senior Vice President and Consumer Banking Market Leader at Bank of America, where he also serves as Consumer Lead for the Detroit Local Market Organization. He joined the bank in 2015 and has progressed through multiple leadership roles, earning promotions to Financial Center Manager, Assistant Vice President, and ultimately Senior Vice President in 2020.