Creative Ways To Introduce Your Child To The Fundamentals Of Money Management
One of the most important gifts you can give your children is the understanding of how to manage money. We all want our kids to be financially savvy adults one day, but it’s become increasingly difficult, especially with instant gratification, and things like, ‘at your fingertip’ in app purchases. Here are some fun ways to provide your child with a basic understanding of financial management:
1. Make Sure Your Child Has Money To Manage
Whether you choose to give your child an allowance or make them earn it, the key is to provide your child with the opportunity to manage their own money. Even a small amount can help provide valuable lessons.
2. Let Them Know What Expenses They Must Pay For
Naturally, you have the basics covered (food, clothing, and shelter). If children want the name-brand shoes or a new video game, tell them they must save for it. Help them to budget and save their money to make the purchase. You may even consider offering a 50% partnership during this lesson. Make a deal to match every dollar they save until your combined total is enough to purchase the item they desire.
3. Don’t Bail Them Out
If your son or daughter spends all their money and can’t afford that cool new toy they wanted, too bad. Let them know it’s time to start saving up again.
4. Help Your Child Shop Wisely
Show them how to search for specials, deals, discount codes, and coupons. Show them how the same item can vary in price depending on when and where you buy it. Introduce them to overstock sites, garage sales, and bargain outlets. But also teach them about quality. Sometimes it is worth it to pay more if the item will last longer, saving money over time.
5. Make Coupon-Clipping A Family Activity
By showing your children the value of saving money and by making it fun, you are potentially building a habit that will remain over the long term. Explain that using coupons for items you will buy anyway is like finding money. Spark coupon interest by putting away the money these coupons help save, and then allow your children to pick an activity for a family night out using that money.
6. Teach Kids How To Shop (At A Store)
A trip to the grocery store can provide endless lessons in bargain-hunting and comparison pricing. While this can be done in nearly any store, it’s most effective in a grocery store because of the large number of choices available. Show your child two boxes of similarly priced cereal and discuss the difference. It’s a great way to introduce the concept of getting the same value for less money.
7. Eat At Home As Often As Possible
It’s no secret that when time is tight, eating out can provide a quick and easy solution. Unfortunately, it’s also an easy way to overspend on food. Families can benefit from healthy, well-balanced meals prepared at home. As an added bonus, you can get the entire family involved in preparing meals, which will teach kids how to cook for themselves when they’re older.
8. Make It A Game
Allow your children to develop their own cost savings strategies and then track who can generate the most savings each month. By making it fun and by offering an incentive, you can keep your children interested and engaged in the concept of saving.
Teaching money to your kids doesn’t just mean earning and shopping. In fact, one of the most important financial concepts for children is saving. While saving, they can watch their money grow and learn that gratification isn’t always instant. As you start the conversation about using a savings account, focus on the big picture. When your kids deposit money, they will earn dividends. Even the smallest seeds will grow with time. Use this savings calculator from Banzai to show your children how combining dividends and time can affect their balance.
Live Smarter
April is National Credit Union Youth Month, and this year’s theme is “Unleash the power of saving at your Credit Union.” This is a great time to consider opening a savings account for your kids. Dividend rates have increased substantially this year, and First Source will be offering new and fun incentives for saving. To learn more about our youth accounts, check out our youth page. You can schedule an appointment online or call us at 315-735-8571.
Bring This Session to a Live Setting
If you would like to schedule our Community Educator for a seminar or workshop for any Financial Friday educational topic, please email your request to FinancialEducation@fsource.org
This article has been brought to you by Balance in abstract with First Source FCU.