Have you had a talk about money management with your children? Learning about saving, careful spending and responsibility before they’re off on their own is vital. Here are some ways you can teach your kids money management lessons that are appropriate for their age.
Children Under 5
Include your children in financial talk. Young children love to emulate their parents, so this age is a great time to start a dialogue about the financial choices your family makes. If your family is planning a trip, talk to your children about how you are saving money to prepare. Point out some of the things you are sacrificing in the short term to afford a fun vacation. This is also a great time to reinforce the difference between needs and wants. Explain some of your choices while shopping to show your child that you can’t have everything you want.
Have your kids help with shopping. With your child, specify how much you have to spend on groceries on your next trip, and together create a shopping list. Plan a few meals to include as essentials, and allow some items on the list that are special treats. Once you hit the store, let your child take the lead in selecting items — but don’t let them go crazy. Once you get home, look at the receipt and talk over whether you hit your budget. Point out the importance of getting the essentials and how extras can add up quickly.
Prepare them for the real world. Consider giving younger teens an allowance and insist that they use part of it to pay for a monthly expense, such as their portion of a cell phone bill. Be sure that the expense is larger than a single allowance payment, which will help teach them to save a portion every time they get paid. For older teens, it’s time to learn the necessity of a budget. Spend an evening showing your teen how you balance the monthly income and expenses of your household. Then have them create a budget for their own expenses, including the ones you currently pay.
Start Them Saving
Learning to save is a great lesson for any age. Open a savings account with your child at Navigator Credit Union where they can watch their savings grow.