Make a Difference for Your Kids
on Monday, July 8, 2019
Teaching children how to use money wisely is important to ensuring the next generation is fully equipped to achieve their financial goals in the future. In honor of July being National Make a Difference to Children Month, we would like to share ways parents can teach their children sound financial concepts.
4 Tips for Kids 13 and Under
For kids age 13 and younger, activities like board games, saving contests and mobile apps are great ways to introduce children to sound financial concepts. There are many other tools parents can employ to teach their kids to make wise financial decisions. Consider:
- Set a good example. Kids are observant and learn many behaviors from their parents. Avoid making impulse purchases, and explain to your kids why you’re putting off buying certain things, so they can learn the value of delayed gratification.
- Give allowances. Hands-on experience is critical to learning how to use money wisely, but children can’t get that experience if they don’t have access to their own money. Set aside a weekly amount to give to your children (According to Rooster Money’s Allowance Report, the average weekly allowance in the U.S. is $9.06), and help them decide the best way to use it.
- Introduce them to spending. The next time you run to the grocery store, bring your child with you, and encourage him to bring $5 to $10. Tell him he can pick out an item to buy that can’t exceed that amount, and have him pay for the item at checkout. This introduces the child to the process of spending, and he will gain an idea of how far his money can go.
- Visit the bank. Bringing your child with you to the bank can provide a valuable introduction to how banks help keep your money secure. This activity also helps children become more comfortable with visiting the bank when they are old enough to do so on their own.
4 Tips for Kids 14 and Older
As children near the end of middle school and start to enter high school, you should step up your efforts to instill in them a sound understanding of financial concepts. If your children start taking on part-time jobs, it’s crucial to use that as a hands-on experience in how to handle money. Sit down with your children and help them:
- Open a savings/checking account. Once they start earning money, they will need a place to store it that is more secure than a piggy bank. Visit Northwest Bank to help them open their first checking and/or savings account.
- Set goals. Talk to them about what they want to accomplish with their money. Whether it’s putting money away for their college tuition or saving to buy a car, they will need to know what they want to accomplish so they can put together a plan that will help them achieve it.
- Create a budget. A budget is the plan that will help your children reach their goals. Review their budget with them and help them see how putting a specific amount of money aside each month can help them achieve their goals.
- Track their spending. Once your children have a budget in place, it’s time to track where their money is going. Make an appointment with your children once a month to analyze their bank statements, so they can see how much was spent versus how much was saved. Then help them determine if any adjustments need to be made so they can reach the goals they have set for themselves.