Habits to Teach Our Kids

A recent shopping experience highlighted how much our financial habits have changed. While at the grocery store, a friend forgot their wallet but successfully completed the purchase using a mobile payment app. This incident prompted reflection on how we educate children about money in an era when cash is rarely used. Traditional methods like piggy banks and checkbooks are becoming obsolete, yet the importance of managing money remains critical.

To ensure both kids and adults understand financial responsibility, here are some essential habits to adopt:

1. Monthly Account Review: Regularly reviewing your bank account—either online or through printed statements—is vital. Pay attention to ATM fees, which can significantly add up if you frequently use out-of-network machines. Additionally, keep track of recurring charges; automatic debits can lead to unexpected expenses if you're not vigilant.
2. Overdraft Protection Awareness: While overdraft protection can be convenient, it often comes with high fees. For example, a $4 latte could end up costing you $16 if you rely on overdraft coverage. Understanding these costs helps prevent unnecessary spending.
3. Check Your Credit Report: It's crucial to check your credit report at least once a year, regardless of whether you have credit cards. Your credit score affects loan applications and can even impact job opportunities. Under the Fair and Accurate Credit Transactions Act, you can access your credit report from each of the three major bureaus for free annually. Many banks, including ours, offer access to credit report tools via online banking, making it easier to monitor your financial health without affecting your credit score.
4. Track Daily Expenditures: Keeping a log of daily spending for a week can reveal surprising patterns in your spending habits. This practice helps identify areas where you might be wasting money, such as impulse purchases or frequent small expenses.
5. Join Frequent-Buyer Clubs: Many retailers offer loyalty programs that reward frequent shoppers. Joining these clubs can lead to significant savings, especially at stores you visit regularly.
6. Automate Savings: Setting up automatic transfers from your checking to your savings account can simplify the saving process. Starting with a small amount and gradually increasing it ensures consistent savings and helps build a financial cushion.

By instilling these habits, both children and adults can improve their financial literacy and save money. Instead of spending savings, consider investing the “found money” into retirement to secure a better financial future.