There are plenty of ways you can teach your children about managing money at all stages in their lives. Here are a few ideas.
A piggy bank is a great start, but it doesn’t provide the visual that may help inspire savings. If you use a clear container, your child will be able to see that, over time, money accumulates if you save.
With young eyes watching your every move, it’s important to set a good example. If you only use credit or debit cards every time you are at the post office, grocery store or a restaurant, your kids will eventually notice.
Walk them through the purchasing process and show them how much things cost. This can actually be a lot of fun. Have your child help make your grocery list. Explain that you only buy what you need and start with the essentials as to not overwhelm them: milk, eggs, bread, etc. Have them bring a pen to make a line through the items as each is placed in the cart. Once you have completed your shopping, have your child hand over the payment at the register, cash of course, and count through the change to make sure it’s all there. Not only is this a great educational experience, it will also help develop other skills and instill confidence in your child.
As children get older, it is important to continue to educate them about money management. Explain the consequences of purchasing. If you buy this pair of shoes, for example, you won’t be able to afford that shirt. Another great tip is to reward your kids financially, rather than handing over your hard earned cash. Instead of handouts, pay your children based on chores they do around the house such as taking out the trash, loading and emptying the dishwasher, or mowing the lawn for example. This will reinforce the message that money is earned.
When children become teenagers, teaching them about money means teaching responsibility. Set them up with simple checking and savings accounts, thereby taking money management to the next level and preparing them for independence. Teenagers want to buy things that money from chores just simply cannot handle. Encourage them to get a job, but set the expectation that with regular income, a pre-determined percentage should be saved for the long term. Finally, teach them about the danger of credit cards. Once they get into college, your 18-year-old will be bombarded with credit card offers. It’s important to talk about why having debt can be bad. Sure, set them up with a credit card, as it will certainly help to build a credit score, but make sure they understand they should spend only a certain amount each month and the balance should be paid the day the bill arrives from the credit card company.
For information about opening a checking or savings account, please stop in at our New Berlin or Springfield branch.