Whether you have a child that is just learning the value of coins and paper money, or if you have a teen that is beginning to think about saving for a car,

it's never too early or too late to start teaching your child about proper money management. By doing so, you are helping them build a foundation for making good financial decisions.

During today's webinar titled, "Teaching Kids Smart Money Choices", we are going to cover the four foundational topics.

They are spending, budgeting, saving, and credit. Let's start by discussing spending. In this section, we'll talk about teaching children about "needs" versus "wants", coins and paper money, and finally, about good spending habits.

In other words, we'll discuss how we spend money and how our young ones he is doing it. An age-appropriate definition of spending is cash or credit in exchange for goods or services. For instance, your child giving a cashier a five dollar bill in exchange for a toy.

Many children know what spending is by watching their parents at the store; the next step is to discuss the importance of understanding the difference between financial "needs" and financial "wants" with your child.

At this age, children may have a difficult time differentiating between what they "need" and what they "want". So, here are some examples of questions to ask your child to help them start understanding the differences: Number 1: Do you need a warm house to live in?

So, the answer to this question, of course, is yes. Secondly, do you need healthy food to live? This one may be hard for your child to answer but the answer, again, here is yes.

Even though, we all need food, a delicious dinner at an expensive character theme restaurant (for them), or a nice steak restaurant (for us) is a "want", whereas a healthy, fair-priced meal at home is much more the financially responsible approach to the "need" to eat.

This is a great question to ask because it conveys that you don't necessarily "want" everything you "need" -things like fruits, vegetables and sleep. Another question to ask is, do you need a winter coat?

The answer to this is yes in many parts of the country.However, similar to the expensive meal versus the at-home dinner example, even if you need a winter coat, you don't need the biggest logo or the most expensive option.

Lastly, do you need the newest gadget or latest phone? Although it may be hard to get your child to admit this, the answer to this question is often no. Teaching your children the value of coins and paper money takes practice.

They may have already started learning about this in school, but it's always good to reinforce these learnings at home. Some ways to teach your child about coins and paper money include:

Helping your child learn the different amounts associated with each coin. For example, have your child make a design with ten pennies in one dime, or you can have them select between four quarters and one dollar when giving them money.

You can show your child your online shopping experience and explain to them even though no money is being physically exchanged, that it is still real money being used for the purchase.

Next you can have your child help you figure out how much money you need, as well as how much change you should receive when making purchases.

When paying with cash at a store, have your child help with picking out what bills to give to the cashier and think about how much change you should get back. Another exercise is you can give your child a budget of $10 and see if they can pick out three things to buy without going over that amount.

Lastly, treat coins and paper money like flash cards. For the young ones, hold up a coin, ask for its name and how much it's worth. For your older children, you can have them add up the different sets of coins and tell you the final value. Understanding the concept of money is one thing; getting to know how we should spend and not spend our money is another. So, spending is a personal decision.

As you teach your child money management, it's important that you follow good money rules and practices as well. If your child sees you making good decisions about money, they'll be more motivated to make good decisions with their money as well.

Here are a few good money rules to discuss with your kids: Number 1: Do make it clear that you appreciate what you have. Whether this is clothes, dinners, or vacations, explain how much of these things cost and how you are able to afford them. Secondly, do share. This could include having your child helping you choose a charity, if you plan to donate.

Then, lastly don't buy impulsively. Although this is a hard one to teach your child, it can be a great teachable moment. One example is seeing something tempting in a store and explaining that you're not buying it because you're saving for a specific goal, like a summer family vacation, or a need, like a new roof on the home.

Like many adults, kids learn best by doing. So, what I'm about to say is a 180 from what I just asked you not to do. And that is let your child purchase something impulsively with their money while you guys are out shopping. Ask them, if they're sure that they want it, but don't discourage them from buying it.

Consider videoing them talking about the decision. Check in with them again at a month, ask how they're enjoying it and play back the video. The key message here will be asking your child if they might have saved the money to purchase something else, and if they still feel their purchase was worth it.

If it's a cheap trendy toy, like a toy car, they may have forgotten about it. If it was something they use every day, ask, whether they agree if it was still a good use of their money.

If they bought three inexpensive toys that broke,ask them if they think they would have been better off saving for a sturdier most likely, more expensive version of that toy. Now, let's go over budgeting. In this section, we'll go over how to discuss budgeting in child-friendly terms, learn why allowances can be useful in teaching children in the value of money and identify some first steps your child can take the budget.

An age-appropriate way to define a budget is how to plan and keep track of your money to make sure you have enough for spending and savings. Keep in mind that children are very visual. They can keep track of spending, savings, and other financial goals through handwritten lists, a computer or spreadsheet, or a digital money management tool that is easy for kids to use.

Ask your child what they want to spend their money on and what are their priorities? Add it up at the end of the week. Then add it up again at the end of the month.

With a budget, they're able to save for something short term, like the latest toy, or long term, like a special gadget, a present for a friend, or even to a donation to a charity of their choice.

For adults, an important part of budgeting is income. You need to know how much money you have coming in to know how much money you can spend. For a child, their income most likely comes from an allowance or doing small tasks for the family around the house.

On the screen here, you'll see the most popular chores that kids earn money doing around the house, according to a 2021 report. Now, that we've talked about how to introduce the idea of budgeting, let's discuss some ways that your child can put budgeting into practice through managing expenses.

Here are some first steps you and your child can take in budgeting: Number 1: Save. Discuss the concept of not spending all of their allowance every week. Some kids are natural savers. If your child isn't one of them, this will take some encouragement and practice, such as setting up a tracking poster or a picture of the item they're saving for in their bedroom.

Using tangible paper money and coins can also help them learn the concept of saving. Next: Set tangible budget goals. Help kids identify something they want to buy, but they don't have enough to buy right now. Assign a cost amount as a goal. Thirdly:

Discuss different items your child can cut back on buying. This helps them see that being frugal results and more mind to spend on larger items or even for their savings goals. For example, look at the "My Savings Chart" on the right hand side of this slide.

If their dream toy is a scooter, and it costs them $54. Help them to understand that they can reach this in nine weeks, if they carefully plan how much of their $10 weekly allowance they do and they do not spend. And then lastly, consider "automatic" budgeting options. This could be anything from manually depositing dollars into separate jars or tracking amounts in a spreadsheet or mobile app.

We've talked about spending and budgeting. The next category deals with how to talk to your kids about saving. In addition to discussing the point of saving, in this section, we'll discuss saving for something specific, the actual cost of that specific item, and savings accounts.

We've discussed that the point of budgeting is saving, but what's the point of saving? In kid-friendly terms, saving is gathering money now so that there is some left over to spend later.

This leftover money could be used on a range of things. In order for your child to stay for something specific, they first need to know how much the item actually costs. Here are some ways to talk to your children about costs:

First, you can let your child look at your grocery receipt or your restaurant bill. Secondly, you can ask your child; what does that toy cost? And if it's on sale, what does on sale mean? Third, you can ask your child what they think an ice cream cone costs, right? It could be $3 to $5.

Last, ask your child what they think it costs for a day at the museum zoo or park. For example, if one ticket to the zoo is $25, going as a family of four would be $100. So that's $100 for a day at the zoo as a family.

How many ice cream cones is that you go to this? There was a family that'd be the same cost as 20 ice cream cones. Right? And based on a $10 a week round, it would take 10 weeks to save enough to bring the family to the zoo.

If they save their whole allowance, although with savings account may seem like a big jump from simply learning what savings and budgeting are. Your child may be ready for that savings account earlier than you think. By age 6, your child may be ready for a savings account.

Check in with your local bank or credit union and ask if they offer a savings account for minor children. These accounts can help young children, learn financial basics and some institutions may provide interactive online experiences. To help further your child's financial education as you save share and spend together.

The fourth and final topic we'll cover is the importance of using and building credit. Although credit is difficult to talk about with children because it's hard to put in simple terms, you'll be surprised at how much your child understands.

In this section, we'll go over some definitions and examples of credit and kid-friendly terms. A way to define credit for your child is borrowing money and promising to pay it back later.

They pay for something for that chance to borrow, which is called interest, and if they don't pay it back, it's less likely someone will let them borrow money later. When discussing credit with your child, it's important to emphasize that using a credit card is not "free money" and that it's important that we live within your means. To reinforce the idea of repaying debt, you could ask your child, "if you lend your friend your favorite toy for a week, and they return it a month after they promised, are you going to want to lend them another toy?". What if this child never returns this toy? Right? How would you feel?

The more trustworthy they are with borrowed money, the more you can trust with them to borrow in the future. This is a simple version of having a good credit score and being able to access higher lines of credit. Next, we'll talk about some more credit examples and approaches to talking about credit.

Now that we've discussed how to explain credit to a child, let's discuss some kid-friendly examples you can use to back up your explanation. Say you're at the toy store and your child wants their $54 dream scooter but they didn't bring their money with them.

They would have three options, at this point. Number 1: They could buy it with your money now and promise to pay it back with their money later. That would be a credit purchase. Secondly, they can ask for their allowance early to buy it. That would be a cash advance.

And then, thirdly, they can ask if they want to pay for it over the next four weeks of allowance money from you. Paying it back like that on a set schedule would be a loan. To emphasize the importance of credit even further, you could explain the concept of interest, which is the amount you pay for borrowing that money. With interest, they would now owe you $54.88, instead of the $54 they borrowed to make the original purchase.

So, we know this has been a lot of information, so let's do a quick review: Number 1: Teach your children good spending habits. Everything you teach your child about spending, you should reinforce yourself; appreciating what you have and not buying impulsively can have a positive influence.

Remember, you are the primary role model for your kids. They will learn a lot just by observing how you handle money.

Secondly, help your child learn to budget. Even a small allowance can help your child learn how to budget. Budgeting is the first step to saving. If they want to buy a new scooter, help them figure out how much of their allowance they would need to save and how long it would take.

Next, make savings goals. Your child will be more motivated to save if they're saving for something in particular, like an expensive toy or a bike. Last, define credit and kid-friendly terms.

Credit is borrowing money now and promising to pay it back later. One kid-friendly example of credit is allowing your child to borrow money from you to buy a toy and your child promising to pay you back later. We encourage you to check out the articles and videos at pnc.com/insights.

These resources are designed to help you manage money for all of life's milestones. At PNC, we believe when people feel confident taking small, simple steps every day, those actions can lead them to achieving their financial goals - whatever they may be.

That's why we've developed workshops like this, to help foster discussions around money and help you gain new and valuable insights.

Thank you for your time today, and we look forward to providing additional education for you in the future.