It’s never too early to start teaching your kids (or grandkids!) about money. We’ve previously discussed knowing when to cut the purse strings and set your adult kids financially free, and now, we’ll dive into creating financial awareness. Whether your kids are eagerly awaiting the tooth fairy, exuding excitement over seeing their first PG-13 movie, or gearing up to decorate their first dorm room, all ages can benefit from learning and adopting a healthy financial routine. Here are three of our ideas:
3 Healthy Money Habits to Teach Your Kids
- Money Jars - Saving is a learned behavior – the earlier you start teaching it, the better. To start off, take two jars and label one “Spending” and one “Saving.” Explain what each jar represents: the “spending” one for small purchases like candy or toys for the youngsters and shopping or dining out for the older kids; and the “savings” one for rainy day expenses, like Band-Aids to mend a scrape from the playground for the younger ones or car repairs for the older ones. The idea is to differentiate between “want” vs. “need.” When your kids complete their chores around the house, award them with a few dollars. Encourage them to divide these earnings equally between the jars and watch their clear, empty containers turn full and green!
- The Lemonade Stand Principle - Children begin observing their surroundings at a very young age. They’ll pick up on the concept of working, especially if you point out examples to them like someone at the grocery line checkout or you yourself heading to work every morning. Lemonade stands are a classic way to introduce kids to the value of working. Start by giving them a $10 “investment,” and explain that this will help them get their booth started. Next, hit the grocery store for supplies. As they get their stand up and running, help them count their money at the end of each day and place their earnings in their money jars. For the older kids, encourage them to create fliers for mowing lawns and dog walking – there’s always someone in the neighborhood looking for a helping hand!
- A Family Goal - Whether it’s saving for a vacation or a big purchase, creating a family-based financial goal allows everyone to learn and reap the benefits of saving money. Once your family decides on a savings goal, like a new basketball hoop or a beach vacation, have fun with the process. Create a visual chart, like a thermometer or a piggy bank, and color in each savings milestone, so your kids can tangibly follow the progress. Once you reach your goal, celebrate and enjoy the win, knowing you all worked together to earn that new hoop or relaxing beach time.
Final Points
Money concepts can be challenging to explain; but they don’t have to be. Use these three action items to get excited about starting the “money talk” with your kids – regardless of how young or old they may be – knowing that these lessons hold a lifetime’s worth of value for them.
Questions and/or interested in how this applies to your financial life?
Email us here: info@afsfinancialgroup.com.