One of the most valuable lessons you can teach your children early on is one of financial literacy. While sound financial management is a skill that none of us are born with, the good news is, the lessons can be taught early on at home. Let’s look at practical lessons you can provide your kids so money management lessons won’t feel so overwhelming.
1. Introduce the Concept of Earning Money in an Age Appropriate Manner
It’s crucial to teach children how you earn money and it doesn’t appear like magic. Assigning chores around the house that come with a small allowance is a great way to put this into action. For example, tidying up their room, helping with the dishes, or yardwork can help them see the link between work and earning money.
When they understand this connection, it builds a foundation for understanding the value of hard work and responsibility for the rest of their life.
2. Show Them the Importance of Saving
Another major lesson for kids is showing them how they can save money for something they want, instead of expecting something right away.
For younger children you can start doing this by using a clear jar or piggy bank. Unlike a digital account, a physical jar allows kids to see their savings grow over time. You can encourage them to save a portion of their allowance or gift money, teaching them delayed gratification—a key skill in managing finances as an adult.
A Youth Savings Account from SpaceAge CU is another option for teaching the value of savings to kids 12 years and younger, plus they’ll have the added benefit of earning interest on their deposits. Or, take advantage of the Youth Prime Certificate for kids 18 years and younger, where they earn a competitive fixed-interest rate.
3. Practice Smart Spending
You can help your kids make thoughtful decisions about how they spend their money. The next time they want to buy a toy, snack, or the latest fashionable hoodie, encourage them to think about whether it’s something they truly need or something they simply want. This teaches them how to prioritize their spending and avoid unnecessary purchases.
4. Create a Mini Budget
Once your kids are old enough, you can introduce them to the concept of budgeting and it doesn’t have to be complicated. A simple budget focused on the money allocated for spending, saving, and giving can teach kids how to balance their money and use it wisely for several purposes.
The older kids can learn an enormous amount regarding budgeting and sound financial management with the tools provided in a Teen Checking Account from Space Age CU. They can keep track of their spending and budget at any time, thanks to the convenient online banking.
5. Set a Good Example
We all know kids learn by watching their parents. If you practice budgeting, saving, and making thoughtful purchases, they’re likely to mimic those behaviors. You can even include them in small financial decisions, like comparing prices at the grocery store, to show them how to be a smart consumer.
While teaching children financial literacy may seem like a daunting task, we offer numerous resources at Space Age Credit Union. Contact us today to learn more.
