Tips to Teach Your Kids About Money Management
“Tips to Teach Your Kids About Money Management” by Christine Bieniosek, Associate – Tax
It is never too early to teach children about money management. Budgeting money is a skill needed throughout life, and practicing good habits at a young age can lead to financial wellness in adulthood.
Here are a few ideas to teach your younger loved ones about money management
- Does your child do chores around the house, and do they receive an allowance from you? Be sure that your child sees the relationship – they are not simply receiving money, but must earn it.
- Open a savings account for your child. In addition to their allowance, when they receive money from grandparents and extended family at holidays and on their birthday, encourage them to deposit it in their account. Look over the bank statements with them and point out the interest they’ve earned, as well as their growing account balance.
- Involve your child in the grocery shopping process. Show them how you plan what to buy, create a shopping list, look for the best deals and coupons ahead of time, and then stick to your budget in the store. Ask your child for their ideas, and after a while, let them try to create a shopping plan within your family’s budget.
- Let your child set financial goals and create a plan. Ask them what they’ve wanted for a long time – perhaps a toy, or to attend summer camp for a week. Similar to the grocery shopping scenario, help them compare options and prices. Then, create their plan to earn and save the funds. Are there extra projects around the house that they can do to earn extra money, beyond regular chores? Be sure to have your child write out their financial plan, and help them track their progress. Once they have reached their financial goal, celebrate the accomplishment. Share in their joy and let them know you are proud.
- Finally, set a good example. Children are very perceptive and pick up on patterns and trends. If you use your credit card on a regular basis, your child might notice – be sure to explain that you are not using the card to buy things you can’t afford; rather, you are making planned purchases within your budget. On the positive side, if you spend time each month figuring a budget and tracking your expenses, your child will see these good habits and want to emulate them. Implementing these tips and setting a prudent example will set your child on their way to financial wellness.
If you would like to talk about financial planning at any stage of life, contact us to learn more. We are happy to help you reach your goals.