Finances for children? YES! Teaching your kids about money is an important part of parenting. Often times people graduate from high school, and even college, with little to no concept of how to save money, make investments, or manage their taxes.
Although teaching your child about bank loans, investments, debit and credit cards may seem like a little too much, you can start off by teaching them the simple art of saving money. Here we have included six tips for teaching children about finances!
What is the right age to teach children about money?
There are some people who say that parents should start teaching their kids about the importance of money as early as age two. The appropriate age for your child to learn about money is total up to you, however imparting financial knowledge to them is highly important and the sooner you share your knowledge with them the better off they will be. You can start teach finances to your children and have some fun doing it by utilizing these quick tips:
Use Jars to Save: A fun way to help your children save money is to use piggy banks or jars. You can also use envelopes to save the money and draw pictures on the outside of all the things they wish to spend the money on. Using clear jars will give them a visual of the money piling up, which might excite the child. They can use jars of varying sizes to save money for each item they want to purchase based on how much that item costs.
Set an Example Through Actions: Your kids learn from you. If they see you doing something, the likelihood they will also do it increases. So the best way to teach your kid about saving is by example. If the kids see you saving money, they will want to do the same! You can use a savings jar too or take the kids with you when you make a trip to your credit union!
Start a Savings Account for Them: Did you know you can open an account for your kids as soon as they are born? It's true. Children who have their own savings accounts will not only learn about the importance of savings, but as they get older they will also learn about interest, investments, budgeting, etc.
Teach Them To Be Responsible with Credit Cards: Once your children are in middle or high school it’s important to teach them about loans and debt too. As soon as your children turn 18 they will be endlessly solicited for credit cards and auto loans, so it is important they know how to make good choices about those types of products.
Giving an Allowance: If you choose to give your children an allowance make sure it is in return for doing chores and household work. This will teach them that money is not just given to them, but rather it is earned. Money in return for mowing the lawn, doing the dishes, cleaning their room, doing the laundry, and other chores, will teach them that nothing comes free, and you must work to earn money.
Talk to Them: The best way to get the message about saving money across is by talking to your children. Nothing works better than telling children up front about the advantages of savings. Teach them what they can do with their savings, how it’s beneficial to start as early as possible, why you should invest your money and much more. If you help them understand the importance of money, they will start taking responsibility for it from an early stage in their lives.
Teaching your children about saving money is not only important, but also prepares them for the financial responsibility they will have in the future. If your children learn to save money and keep their spending in check, they are more likely to have a secure financial future. It is never too early to teach your children about finances.
Want to know more about teaching children finances? Check out this video from KIMT News 3, featuring our Member Advisor, Pam Evans.