Kids Are Smarter Than We Think

We Americans are pretty bad with money. Global economic data show that on average we are saving less than 5% of our disposable income. Our rate of savings has been in decline for decades, and we’re nowhere near the rate of savings of most Euro-zone countries (2013-2015 Source: Global Finance Magazine)[1]. Here in the US, we have more debt and “own” more stuff, but have less money saved for retirement.

My Selfish Motives

I’ve been studying this trend and wondering about it a lot. Partly it’s been driven by personal interest. I have an eight-year old daughter, and I’d like her to understand how money works – what to do with it – how to become “good” with money. I’ve surveyed other parents, studied the available data, read books, and started dozens of conversations. My own parents didn’t really talk about money. We kids knew there was money for college, and that our folks ‘had our back’ financially speaking. Frankly, I graduated with a B.A., and not one clue of how to manage my personal finances. It was blissful.

What Can Parents Do?

While there’s no magic wand for creating financial awareness, one of the biggest mistakes parents make is NOT talking about money at all. In a March 2016 Parents Survey, 100% of responders had a savings account for their child. Yet 50% of the kids in those families had little or no knowledge of the account.[2] Here are a few suggestions for parents:

  1. Start early – kids at age 7-9 can begin managing “piggy bank” money and earning an allowance or money for doing chores.
  2. Talk about control – kids can set special “goals”. Deciding what to spend, save, and even donate to charity is an important concept to introduce. Create a plan with your child for short-term gratification and reachable goals.
  3. Get interested in interest – middle schoolers can understand the cost of borrowing money, and the flip side, long-term investing. A cool book and concept to check out is David Owen’s The First National Bank of Dad[3] – he pays his children (generous) interest on their savings.
  4. Be consistent – whatever you decide to do, make it simple enough, with the right incentives to keep it going. Money management is a marathon, not a sprint.

What Can Bankers Do?

  1. Develop tips for parents – or direct them to relevant online resources. When I opened a savings account for my daughter, it was just “here’s the paperwork, sign here, and see you later!” At most banks the account opening process takes a while. What a great opportunity to start a dialogue, strengthen the client relationship, even point parents to a relevant post on your bank’s website (or elsewhere on the web).
  2. Host a seminar – how about something on college savings plans, kid savings strategies, or young entrepreneurship?
  3. Inform parents on the basics – do you have clients with UTFM accounts that were established 10 years ago or more? Those kids might be ready for an account of their own. Know the age requirements for accounts at your institution – when can someone begin as a checking customer, etc.?

Money-Smart Kids

So often as parents we are surprised and delighted with how quickly our kids learn new concepts. There are dozens of cool apps and ways to get kids interested managing their money at an early age – whether your customers use an app, a paper chart on the wall, or other methods, getting on the road to raising money-smart kids is a worthwhile venture.


Ada Vaughan is a Mom and serial entrepreneur. She recently became CEO of a startup tech company called Chore Check that has developed an app/website for families. Chore Check is a useful and fun tool that gets parents and kids thinking about the value of a dollar earned, and how to manage it, at an early age. Ada earned her MBA at Georgetown University, lives in the Chicago area, and is working on raising a money-smart daughter. Find out more at

[1] Global Finance Magazine –

[2] Chore Check 2016 Parents Survey findings via surveymonkey, March 2016.


Written by Ada Vaughan