“Money doesn’t grow on trees.” For generations, parents have been repeating this same familiar saying to their children. While we all eventually realize what our folks meant by this saying, it is often only after we have learned the hard way through many small (or large) financial mistakes. How can we prevent this same fate for our own offspring? Here at CHROME, we broke down some simple, engaging ways to help our children develop healthy financial habits.
Give Your Kids an Allowance
Unlike old adages, creating an allowance is a parenting tradition that actually works. Provide your children with a list of daily or weekly duties, and reward them with a small amount of money for completing these duties. Through this tried and true system, your children will learn to value their hard-earned money, and will be much less likely to spend it on a whim.
Teach Your Kids How to Budget
Take the traditional allowance system a step further, and use it as a way to teach your children how to allocate their money. Create three jars labeled “spend,” “save,” and “give.” Explain to them that they should use the “spend” jar to purchase items in the immediate future, the “save” jar to build up for future use, and the “give” jar to donate or use to buy someone a present. This is an effective strategy that encourages kids to make wise and well-balanced financial decisions, while at the same time growing their hearts a little bigger.
Set Goals on What to Save Towards
About that save jar… As adults, we all have financial goals that we strive for through savings. Why not get your children motivated early? Help them to identify something to save towards, starting small (a concert ticket or a new toy.) The rewarding feeling that comes from achieving a goal will encourage them to dream even bigger (a car or college tuition.) This great habit of saving and striving towards a goal will stick with them throughout life!
Educate Your Children Through Everyday Purchases
You can make everyday errands an exciting and valuable learning experience for your children. At the grocery store or mall, explain to your children why some items are too expensive and why others are a good value. Take them on a virtual field trip by logging into your online banking. Show them how this special place in cyberspace helps you to keep track of your finances, and explain to them why banking is the safest option for your money. This leads us to our 4th idea…
Open an Account for Your Child
Who says a child can’t start putting their hard earned money in the bank? Help your children to open up a savings account and allow them to participate by guiding them through each step of the process (don’t just do it for them!) Allowing your kiddos the sense of independence and maturity that a bank account provides will encourage them to use it properly with your guidance…not to mention they will get to see how interest keeps their account growing bigger and bigger… nothing’s more exciting than that!
Ultimately, there’s no better way to learn than by doing. Utilize these strategies, and before you know it, your children will be well on their way to a sound and stable future. Happy saving!