As a child, how did you learn about money? Were you given an allowance for doing chores around the house? Tasked with getting a summer job to help save for college? For some, it was encouraged to talk openly about money and finances in the home; however, for others, they may have learned about savings and spending the hard way.
In honor of National Credit Union Youth Month, it's important to encourage all parents to look to the future and empower their children to develop healthy financial habits. Parents are the money model for their kids and its important to be transparent and communicate about finances in a non-threatening way.
So how can
we raise financially healthy children? Try these tips to help your child
develop good money habits at an early age:
1. Start an allowance. Paying your kids for doing certain jobs or chores around the house is a great way to teach them how to save and spend what they've earned. Encourage the 1-1-1 method for saving, spending, and giving; if your child was given $9.00 for their allowance (or anything else), have them put $3.00 in a piggy bank for saving, $3.00 in a wallet for spending, and $3.00 in a jar to give to charity. As the kids get older, consider paying interest on their savings to teach them the value of compound interest.
2. Brainstorm ways your child can earn money. The more money they earn, the more they save! Talk to your child about other ways they can earn money. This can range from doing odd jobs for friends and family, to becoming an entrepreneur and starting a lemonade or snack stand in the neighborhood!
3. Learn the value of credit. If your child is looking to make a bigger purchase than they can afford, consider this an opportunity to teach them about credit. Plan to have them borrow the money from you but talk to them about charging interest and draw up an agreement. Ask them to make payment coupons for their payments.
4. Enroll in a savings program. We live in a world of technology, so why not make the most of it when it comes to preparing your kids for their financial future! Money Mammals Kids Club teaches children to share, save, and spend in a responsible way, preparing them for their financial future.
5.
Out of sight, out of mind. Like
adults, children too will be tempted to spend their money if they see it all
the time. If your child is tempted to spend their savings, encourage them to
hide it from themselves so they aren't reminded of it daily. But make sure they
remember where they stashed it!
National Credit Union Youth Month is a
perfect time to help teach children and their parents the importance of planning
for the future and saving for it. Stop by your local Telhio Credit Union during the month
of April for special youth account promotions and other activities to help your
child prepare for their financial future.
