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Savvykidssaving hero
• Oct 23, 2023

Smart financial planning can give us a sense of security, as well as the flexibility to do more of what we want. Yet being savvy with our finances is not something we are born understanding. It’s a skill we need to learn.

Teaching our children financial basics at an early age can set them up for developing smart, long-term habits. Read the below tips from TD Wealth's Planning and Goals Based Advice Leader and father of four, Mark Hasenauer. Recommendations that can teach children financial literacy skills, giving them a leg up and providing a lifetime of success.

Start Kids Young

Many children, even as young as five or six-years-old, can begin to understand the concept of money. Start them off by giving them an allowance. Sit down together and add up cash they receive for a birthday, holiday, or other special occasion. Don’t let that money burn a hole in their pocket but encourage kids to automatically put a percentage of money away for a future goal.

Kids need to understand when they put money away that they aren’t losing that money, they are setting it aside for later. They can identify their wishes for an expensive item someone else may not buy for them, like a LEGO set or a dirt bike, and create a savings chart they can regularly review to see how close they are to their goal. The bottom line is that saving a little bit each month will get them to the finish line faster.

Teach About Growth

Another way to encourage kids to save is by adding to their savings and/or investment (Where applicable). Whatever they decide to put aside, add an additional ten percent. If you can be more generous, double their savings. By showing kids that they won’t miss their $10, and now it’s $20 because you matched it, teaches them lessons that help them understand concepts they can use in adulthood, such as how to take advantage of a 401(k)-employer match program.

Open a joint checking account with your child or invest their money and let them look at the statements. Especially if it’s an interest-bearing account. Watching money accumulate, especially from an early age, is a great incentive to continue putting money aside. Show children that if they continue to save this way, their money can grow exponentially over time.

Teach About Needs Versus Wants

When you’re out shopping, and your child asks you to purchase an expensive backpack or a trendy shirt, suggest they take the money out of their own savings. This will give them the opportunity to weigh the value of the item. Is it something they really need or just an impulse purchase? If they do decide to commit, have them pay in cash rather than using a credit card. By handing over their hard-earned money, they see how much of their savings is gone and how much is left instead of charging it on an account that requires a later payment.

Increase the Complexity with Age

Older children may be able to find local jobs, like babysitting or dog walking, which can increase their income. Money that can be put aside for a larger, long-term goal like a nice car, or even college tuition.

Teens and tweens can also understand more intricate concepts, so ramp up their education. Talk to them about the stock market. While the complexity of watching the latest investment changes on the news may still be too complicated, create an analogy of what’s going on. Explain that if money is invested in a smart, conservative way, it can grow even more. Talk with them about how they would feel if the balance in their account moved significantly down and explain that making balanced investment choices will allow them to get where they want to be. Slow and steady wins the race, and the sooner kids understand this concept the sooner they can build a strong financial foundation.

Educate Yourself

If you don’t feel confident explaining these concepts, or would like to learn more yourself, find a financial consultant. There are many avenues to gain access to information and assistance, including a work-related 401(k) or 403(b) account, which may come with access to someone who can assist with guidance on financial decisions. Read articles about investing or take an online class. Many books teach basic concepts about investing and saving for all ages, lessons you can read and learn about, together.

For more on personal finance topics

If you have more questions about this topic or other personal finance topics that matter to you, visit the Learning Center on TD Bank’s website. You can find out more information about TD Bank's services at

We hope you found this helpful. This article is based on information available as of October 2023 and is subject to change. It is being provided as a convenience and for general information purposes only. Our content is not intended to provide legal, tax, investment, or financial advice or to indicate that a particular TD Bank, any affiliates, or third-party product or service is available or right for you.

For specific advice about your unique circumstances, consider talking with a qualified professional.

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The information contained herein is current as of October 2023. The views expressed are those of the guest author and are subject to change based on tax and other laws. This material is for informational and educational purposes only and does not constitute investment advice, tax, legal, accounting or estate planning advice.

The planning strategies mentioned here may not be suitable or tax efficient for you. You should review the strategies discussed with your legal counsel, independent tax advisor and accountant/CPA prior to making any decisions.

Federal and state tax rules and requirements are subject to frequent change. TD Wealth does not provide legal, tax or accounting advice to its clients. This article is not a substitute for such professional advice or services. It should not be relied upon by you,

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