As a child, money is the last thing you worry about.
You don’t need to worry about paying for necessities and saving up for a future is basically the furthest thing from your mind. As kids get older and start to become more aware of how money works, and that they need to have a certain amount saved in order to pay for things you want, suddenly it’s a topic they become more interested in.
The early school years are actually the perfect time for parents to start teaching kids about money, how hard you have to work to earn it, and the importance of saving. If you’re ready to enter into these kinds of conversations and lessons with your child, then here are some tips that can make the process a bit smoother.
Take a Trip to the Bank
One of the first steps in teaching them about savings is to take them for a trip to the bank where they will be able to open their very own checking account for students. Most banks offer accounts for kids that offer low to no fees and are very simple and basic. These make the perfect introduction to a bank account. They will be issued their very own bank card, and depending on their age, they may even get to sign the back of the card themselves. It’s a very grown-up and exciting experience for them.
They will also be required to make their first deposit upon opening the account, so they can be in charge of counting up their money and handing it over to the teller.
Give Kids an Allowance
While you may cringe at the thought of paying your kids to do chores around the house that they should be doing without being paid, the allowance is meant to be more than that. An allowance teaches kids about being responsible, performing duties, and only being paid upon completion of those duties. It also gives them a chance to be responsible with their own money. They can choose to put it all in their bank account, or just a portion of it.
From a parent’s perspective, it’s usually wise to teach them that 10% (or another amount you feel comfortable with) of their allowance must go into savings. Again, it’s all helping them to learn about being responsible with money and savings.
Have Them Use Their Own Money for Things
If you’re going to be giving your child an allowance, then it can also be time to have them start paying for the things they want. If there’s a new video game, movie, or toy that they want, have them save up enough money to purchase it themselves. This helps to teach them the value of money and see how much time and work it takes to save for the things you want to buy.
If you want to add an extra incentive to their savings goal, you can always match their contributions. For each dollar that they manage to save, you can contribute a dollar too. You may be surprised at how quickly they catch on thanks to this incentive!
Helping Kids to Be Financially Responsible
It’s these kinds of lessons that will teach your kids how to be responsible with money not just now, but throughout their life.
As parents, it’s our responsibility to teach out kids about money.
Don’t count on anyone else to do it for you.