As a parent, you are your child’s first and most enduring teacher. The example you set, the lessons you teach and the instruction you neglect will live in your child’s psyche forever. And, that includes how to handle money. Help your kids develop good money habits now and throughout their lives with the following financial lessons.
Save, Spend and Share
Financial literacy is an ongoing conversation, and it should start at an early age. Start with the basics — rattling coins in a piggy bank. The Balance writer Madison Dupaix suggests a clear piggy bank so your kids can see the amount grow before their eyes. This is their first foray into saving.
As they get older, and are eager to start spending their coins, introduce them to the save, spend and share concept, advises MoneyCrashers.com writer Jacqueline Curtis. They can divide their money into these categories, which allow them to save for the future, purchase an item they want right now and then put some money aside to help others.
Working Hard Pays Off
No matter what store you and your child go into, they will want you to buy them something. And, most likely, you’ll spend most of the time shopping saying no to the cavalcade of items they present to you, increasing your blood pressure and your child’s whining. Instead of losing your cool or cutting your shopping trip short, use the opportunity to teach a lesson about the value of a dollar.
“Any time that they want to buy an extra item, you could have them do a chore or odd job around the house. They should learn that there is a cost involved anytime that they want to purchase an item,” according to MoneyCrashers.com writer Mark Riddix.
Doing chores to earn money for a toy takes time. Kids are notoriously impatient, so you need to help them construct a budget so they can see it’s possible to earn their reward. Learning the basics of budgeting and the importance of setting a goal are lessons that will serve them well now and throughout their lives.
“By giving your child something to look forward to, chores become a priority, and your kids are less likely to waste their allowance on cheap stuff,” according to Curtis. “Don’t over-complicate their budgets. A simple chart indicating how much money is coming in and how much goes out is enough to help your kids understand and plan for future purchases.”
Savings Accounts Are for Kids Too
In your kid’s eyes, financial institutions are for grown-ups. But when your child sees their name on a savings account, they’ll see that their savings and earnings are just as important to the world as yours are.
“Explain to kids how compound interest works and show them how their money grows in a savings account. Expand to a checking account once they’re ready,” advises Dupaix.
Making money a regular topic of conversation with your child will help them grow into finance-savvy people. From toddlerhood to adulthood, you can help your kid understand the value of hard work, saving, and setting and reaching their financial goals.
Open a Savings Account for Your Child at Minster Bank
What better way to start your child off on the path to financial literacy than by setting up their own savings account? We can help you and your child get started right away and provide you both with top-quality customer service as your financial needs grow and change.
Published by Minster Bank
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