Do you ever feel like the Bank of Mom and Dad? Are you always handing over your hard-earned cash to your kids? Now is a great time to start creating a strong foundation for their financial health. When they understand the value of money and the work it takes to earn it, they’ll be better equipped to handle their own finances in the future.
Try these tips to begin to nurture your child’s financial wellness.
A penny saved is a penny earned. Teach your children about the power of saving early. If you have young ones, gift them a piggy bank and help them add to it. Then, make a big deal out of using the money they save on something they really want.
If you have older kids who work or earn money doing chores, help them open a savings account and encourage them to set aside a portion of each paycheck. When they’re ready to buy something special, they can use their own money.
Before you spend, earn. You may hear yourself mimicking your own parents by saying, “Money doesn’t grow on trees!” It’s a truism that helps make the connection between spending and earning.
The best way for kids to learn is through first-hand experience. Younger children can earn money by doing tasks around the house. Give them age-appropriate chores and an allowance that increases as they get older. Make sure they understand the consequences of not doing their chores, too. It can be a tough but valuable lesson when a short “payday” comes around.
Encourage your teen to get a part-time job outside the house. Seeing the link between the work they do for someone else and the paycheck they receive is impactful. It’s a powerful lesson in the control they have over their ability to succeed.
Talk about money as a family. When you speak frankly about family finances, it opens the door for your kids to talk freely about their own. When you discuss savings, or having enough money for a vacation, or getting a raise, you’re modeling the very behavior you encourage in them. And that normalizes financial responsibility.
Talk to them about deals you found at the grocery store or coupons you used, or the sale you waited on before making a purchase. Even better, let them be a part of that process. Take them grocery shopping, let them help you clip coupons or ask them to help you keep an eye out for deals on necessities.
Teach the basics of banking. Before you know it, your kids are going to be out on their own — whether in college or at a full-time job or living in their own apartment. Do they know what it means to endorse a check? How to pay a bill? Withdraw or deposit money at an ATM? Use a debit card? Balance a checkbook? Take a few extra minutes to include them when you do these things so they can learn the ropes. These mini lessons will go a long way toward reducing anxiety when they have to do them solo.
Budgets tell your money where to go. When you teach your kids to budget, you’re teaching them valuable lessons about money management. Seeing where their money is going can be eye-opening. When they realize how much money they’re spending on coffee each week, they might decide the home-brewed version is a better value. Likewise, when they see how much money they can put away when they stick to a careful budget, they discover the power of saving for later.
For more information on helping your kids build financial health, start with the ComPysch Employee Assistance Program (EAP). The EAP offers a variety of helpful resources, including budgeting guidelines. It’s provided at no cost to all MNPS employees and their household family members.