Teaching Kids About Money
As your children are growing, you want to teach them everything for them to be successful. It can be overwhelming! Don’t forget to cover the basics of how to save money. By teaching them the value of saving money at an early age they’ll have the foundation to be a conscious consumer and thrifty saver throughout the rest of their life.
Obviously, your kids are too young to learn about the complicated concepts of finance, but there are still a lot of key basics on financial education that are easy to teach them. We’ll show you what basics to focus on, based on age group.
From ages three to five,
focus on teaching them the value of delayed gratification. Teach your child in order to buy something they want/need you must use money. It’s important they understand that simply wanting for an item doesn’t deliver it on their doorstep.
While in store explain the concept of money with your child when they beg for a toy and stay true to your word when you ask them to save money for the toy they want. Use that toy as a goal for them to save towards and make saving fun with a savings chart.
Also, while holiday shopping, explain you are there to buy gifts for others and get them excited about thinking of gifts others would enjoy. It’s good practice to get them used to the concept of giving and the excitement that can be a result of it.
For ages six to ten,
teach your child about making wise choices with money. Your children are now at an age to earn money from chores and they are probably receiving money for birthdays. So now is a great time to teach your child about how to wisely spend their money.
Give them tips, like the money-saving benefits of generic candy over brand name and the value of researching prices online before you shop. Show them the importance of making a shopping list. They will see that by planning ahead for the things you’ll buy at the store you’re less likely to impulse-buy or over-shop. Bring big-ticket purchases into perspective by explaining that if they continue to save their allowance they can buy a big screen TV or car in X months.
Ages eleven to twelve,
your pre-teen is becoming more independent and has opinions about how they want to spend their money. Now, instead of teaching your pre-teen how to spend, teach them how to save and invest. Cover the basics of compounding interest and the value of putting money aside in a savings certificate or Roth IRA for long periods of time. By understanding the benefits of time and practicing self-control, they’ll see they only need to invest a portion of their money to prepare for their future.
There are a million things you’re thinking of to teach your kids: look both ways when crossing the street, wear your seat belt, say “please” and “thank you”. Teaching them the value of saving money and how to spend wisely is simply another lesson on the list. These helpful tips will give you an idea how to elaborate the next time you say “save your money”.
The Money Musketeers Club is here to help you teach your child about saving money. By incentivizing them through quarterly deposit incentives and awarding D’Art Dollars for each $5 in deposits (up to 25 D’Art Dollars per quarter) kids get excited about saving. If you’d like more information on how to get the most of your child’s Money Musketeers account give us a call at 800.322.2709 or browse www.moneymusketeers.org.
Cha Ching on a Shoestring: http://chachingonashoestring.com/2013/05/13/td-bank-summer-reading-program-for-kids-get-10-for-reading-10-books/