Financial Education

Empowering Kids to Make Smart Money Decisions

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Money management is one of the most important life lessons for keiki. Once a child is old enough to count, he or she is old enough to learn money essentials. Without a fundamental understanding of a dollar's value, children may face financial and emotional challenges in their adult lives. How do we teach smart money habits in a meaningful, fun way? Start with the basics: earning, saving, spending and giving. Hawaii National Bank has compiled a smart money management guide that gives both kids and adults an easy-to-use roadmap to financial success.

Take on responsibilities one dollar at a time
Money does not grow on trees, nor is the bank of mom and dad always open. The first step to building a strong financial foundation is having children acknowledge that money is limited and earned. Whether you pay a weekly allowance for assigned chores or offer cash for extra jobs in addition to everyday duties, kids will learn that money comes from work. There are lots of ways to earn money – cleaning, yard work, selling baked goods, taking care of pets and so on. Support their entrepreneurial spirit, boost their confidence and even allow them to create their own jobs.

Empower kids to budget money for spending, saving and giving with the three piggy banks approach
With hard-earned cash in hand, how do we discourage kids from spending it all at once? Start a conversation about money by setting up a budget. Using the three piggy banks approach, designate a bank each for spending, saving and giving. A common rule of thumb for dispersing earnings is 80 percent for spending, 10 percent for saving and 10 percent for giving. Instead of traditional piggy banks, provide see-through banks or make personalized containers so kids can watch their money grow.

Piggy Bank #1 – For Spending Money
Help kids make smart purchasing decisions between wants and needs
We are all guilty of wanting items we do not need. With limited spending money available, kids will begin to distinguish wants from needs and prioritize their purchases. Although they may make mistakes, they will learn and become wiser shoppers.

Piggy Bank #2 – For Saving Money
Set financial goals together for wish-list items and future endeavors
Whether it's for big-ticket items, like surfboards and iPods, or an investment in the future, like college education, the habit of saving money will pay off throughout a child's life. Talk to your kids about their long-term goals and help them see how even small amounts of money can add up. Reinforce the importance of saving by accelerating the growth of their money. Pay interest or even match your kids' savings.When a child is comfortable with the concept of money without seeing and touching physical cash, trade in the piggy bank for a kid's savings account at a local bank. At Hawaii National Bank, children ages 5 to 17 years old are eligible for a kid's banking account. Unlike regular savings accounts, kids' accounts often have higher yields and a lower opening minimum.

Piggy Bank #3 – For Giving Money
Ensure kids experience the joy of giving
Kids that make charitable contributions are appreciative, confident, and generally feel good about themselves. Encourage kids to donate to a cause of their choice. In Hawaii, Aloha United Way offers an online directory of local nonprofits.

Make learning fun and interactive with games and real-life activities
Money is part of everyday life. Shopping excursions and trips to the bank are great opportunities to introduce money to kids. Let them count dollars and coins, and interact with the cashier. Additionally, online and board games, such as the Game of Life and the Allowance Game, teach kids how money works. An online list of resources is included to help you get started.

Most importantly, be a positive role model
You may not be a financial expert, but you can set a good example. Be aware of your spending, saving and giving habits. If saving money is not your strong suit, let your kids' financial literacy be your motivation.

For more info on Hawaii National Bank's Kids' Banking Account, visit


Keiki Money Games


Daniel Fong, general corporate counsel and compliance administrator of Hawaii National Bank, and his daughter share these smart money tips for kids on Hawaii News Now Sunrise.

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Writer and parent Tannya Joaquin discusses keiki money management with Hawaii National Bank's president and COO Bryan Luke in Midweek's "Tannya's Take."

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