By  Brenda Fong, Wells Fargo Branch Manager

Far from the frugality and conservation that prevailed during the Great Depression, kids these days focus on spending, spending and more spending!  Even parents who aim to teach their children about finances through an allowance may find their lessons overshadowed by stronger messages from advertising or peers.  Unfortunately, the result is that by the time they graduate from high school, most young people know all about spending and very little about saving or spending wisely.

Consider these facts:
Students graduate with an average of $23,186 in student loan debt and $4,100 in credit card debt (FinAid.org and Sallie Mae)
The number of 18- to 24-year-olds declaring bankruptcy has increased 96 percent in 10 years. (Richmond Credit Abuse Resistant Education (CARE) Program)
Four in 10 high school seniors believe that credit cards and car loans have lower interest rates than mortgage loans (Jump$tart Coalition)

That’s why Wells Fargo focuses on helping students and families understand how to save, invest, borrow and spend responsibility, and at an early age. We accomplish this by providing educations resources to individuals, schools and community groups. These efforts will help young people take an important first step in mastering their financial ABCs.

Five Tips for Parents
Parents play a crucial role in their children’s financial success later in life.  Here are five tips for parents from Wells Fargo:

Set Financial Goals — Have children list all the things they want and the anticipated cost. Organize the list into immediate, short-term and long-term goals. Compare the cost with money on hand to help them see the connection between saving and reaching goals. This helps them learn about making choices, setting priorities and distinguishing between needs and wants.

Open a Bank Account — Around age 5, children begin to understand the process of managing money.  It’s a good time to take them to a bank to open an interest-bearing savings account.  Teach them how to make deposits and withdrawals, keep an account register and balance the account. Some banks, including Wells Fargo, offer saving incentive programs for children.  Wells Fargo’s Junior Agent Saver Club is a program for children ages 5-12 who have a Wells Fargo savings account. The tools provided give parents the chance to help their children track their savings, set goals and earn awards.  For teens, Wells Fargo offers a checking account for ages 13 to 17 with an adult co-owner, specifically designed to help parents teach their teenagers good money management skills. 

Pay a Modest Allowance — Though these challenging financial times may make paying your children an allowance difficult, many financial advisors view an allowance as an important tool for children to learn and practice money management skills.  Try a dollar a week for each year of the child’s age.  Or consider adding up what you spend on your child’s “wants” each week and giving the child that amount to manage.  More important than the amount is that everyone understands the rules up front – including the completion of necessary chores – and that you pay the allowance consistently and on time.  If your family finances change and adjustment to the allowance becomes necessary, it’s an additional learning opportunity for your child.
Make a Plan for Spending, Saving and Giving — Encourage children to divide their allowance and any additional earnings three ways: a fund for spending, a fund for saving, and a fund for giving to charity.  Letting children spend some of the money helps them learn how quickly it can disappear unnoticed if they don’t track their spending.  Allowing them to choose a charitable organization in which to contribute helps build passion for the community and compassion for those who are less fortunate.

Use Free Resources — There are many free and reputable places where you can find more helpful guidance to teach children about saving and finances. These include Hands on Banking®, a parent-tested, parent-approved program available free at handsonbanking.org; Wells Fargo’s children’s financial success resource center at www.wellsfargo.com/resource_center/childsfuture; and your public library, which likely has a number of good books on the topic.

Parents should ask their banker for more ideas and advice. Their child’s long-term financial security is at stake. By starting early, they can help their child develop good financial habits that will last a lifetime.

Brenda Fong is Branch Manger for Wells Fargo in Richfield, Minn. To reach her, call 612-316-3208 or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it..

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