Top 3 Money Tips to Teach Your Children
It is never too early to start teaching your children good financial habits. We all want our children to grow up to be financially successful adults and that training begins when they are young. A study done by the University of Cambridge, shows kids’ money habits are formed by age 7. Check out our top 3 money tips to teach your children.
Pay Yourself First
The very first lesson we want to teach is how to save and budget money. Learning to save money at a young age will help instill this habit into adulthood. Use a piggy banking or clear plastic container so children can see their savings grow.
Set a savings goal to teach budgeting. Your child can pick either an item they want to save for or a specific monetary goal such as $50. Be sure to really celebrate when they reach their goal! Each time they receive money from chores or gifts for birthdays/Christmas, your child can put a portion of that money into their piggy bank. They can choose to spend the remainder.
Once you fill the container, have your child bring it into the credit union to deposit into their savings account. Don’t miss our upcoming Youth Savings Week – April 19 – 23rd. Zoo Club members who make a $10+ deposit this week will earn an entry toward our grand prize drawing. Not a Zoo Club Member? Join our FREE Kid’s Zoo Club by opening a savings account for children ages 0 – 12.
Teach either/or spending:
Teach your child about opportunity costs. If they want to spend money on a new Lego set that means they cannot use that money to buy anything else. They have to choose what is most important to them. This is a great concept to model for kids through our own spending. If we choose to go out to dinner multiple times a week, we may not have extra money to go to an amusement park or indoor trampoline gym that weekend.
One of our employees gave a great example of either/or spending for their children. Their daughter wanted a hover board for her birthday. Her options were: Mom and Dad will buy her a big gift such as a hover board but no big birthday party OR she could choose to have a big birthday party and a small gift from Mom and Dad. Their daughter chose to have a birthday party and then saved any money she received as birthday gifts to use toward buying a hover board.
Teach Kids Where Money Comes From:
From a young age, you want your child to understand the importance of hard work and earning money. This explains to kids why Mom and Dad have to leave home or work from home everyday. Give examples at dinnertime when preparing favorite foods. When we earn money, we can buy our favorite foods and pay to live in our nice, warm home. By explaining the effort behind earning money, we also instill gratefulness and sense of appreciation for hard work.
Creating a chores list is a great way to put this concept into action. Give kids a few chores they do as part of the family, such as cleaning their rooms and putting away their toys. Then give a few additional chores they can choose to do to earn money.