How Do You Teach Your Kids About Money?
Teaching your kids about money is an important part of setting them up for future success. Learning about saving and how money works will help your kids be more financially responsible when they grow up. Here are a few ways to help your kids learn about money.
Start with a Piggy Bank
The classic piggy bank is a great way to explain saving to your kids, even at a young age. Anytime your kids receive money - whether it’s birthday money, money from doing chores, or coins that they find around the house – tell them to put it in their piggy bank. Once the piggy bank is full, they can use that money to buy something that they’ve been wanting, like a toy or a special treat. If the item they choose to buy costs more than what they have saved, explain how they’ll have to save up more money before they can buy what they want.
Open a Savings Account
Once the piggy bank is full, take your child to open a savings account. Opening a permanent account for them to deposit money in will not only help them save money, but also give them motivation to save more. Show them the balance in their account and explain how the bigger it gets, the more they’ll have saved for things that they want in the future. This could be as simple as a smaller purchase like a video game or toy, or a big picture savings goal, like paying for a car or college.
Make Financial Education Fun
Learning about money doesn’t have to be boring! Look into fun resources to help your kids learn about money and saving, like games or apps. Board games like Monopoly and The Game of Life can teach kids about counting and handling money, and provide some lessons on saving. They’ll catch on about how important savings can be when they land on Boardwalk and don’t have enough money to pay the rent.
You can also look to your credit union for financial education for your kids. Financial education programs provide activities, stories and events that teach kids about money and saving. At 1st MidAmerica, kids 12 and under with a savings account are eligible for the Kirby Kangaroo Club. As a part of the club, they’ll learn important lessons about money and are invited to fun events throughout the year.
Show Them How It’s Done
When it comes to teaching your kids about money, lead by example. Share how you save part of your paycheck each time you get paid and tell them how that money may be used in the future. When shopping, show your kids different prices on products and explain how you can save money by choosing the cheaper option. If you’re saving for a big-ticket item, like a vacation or home upgrade, tell them how long you’ve been saving and how much more you will need before making the purchase. Your kids are always watching and listening and will pick up on your spending and saving habits.
Talk About Money
One of the easiest, and most important, things you can do is talk to your kids about money. It can be as simple as explaining how you pay for everyday items like groceries, gas for the car and clothes. Giving kids an idea of how you get the products and services you have is one of the first steps to helping them understand how money works.
Talking about saving money is also an important topic to cover. Explain how money grows as you save more. You’ll also want to teach them about wants and needs and how to best determine if something is worth spending their savings.
The time you take to talk to your kids and teach them about money now will help them be more financially responsible in the future. With these tips, you can make your child’s concept of money fun and easy to understand.