Teach kids to be money wise 2021

Start with a savings goal

For kids, time, money, and savings can be hard concepts to understand. A visualization and short-term savings goals can help bring these concepts to light.

Together, pick an item or experience to work toward.

Make the process fun by hanging up a picture of the goal and tracking the progress with a chart. Congratulate your child on every step toward their goal so the process is fun.

Determine an allowance or income strategy

Your child will need a way to generate some income so they can build their savings. Birthday checks certainly help, but a semi-regular stream of money can be more productive.

A well-planned allowance

Allowances are a debated strategy among parents, but this monetary tool can be impactful. Many of the financial pros argue against an allowance not tied to work. Instead, they recommend implementing a regular allowance attached to specific chores.

A savvy income plan

If you don’t want to implement an allowance plan in your household, help your child come up with some savvy business ideas. There are many opportunities for young entrepreneurs including the classic lemonade stand, mowing lawns or even gardening for neighbours and friends.

Help your child with a simple marketing plan and pricing their services. Not only will your child make some extra money, but they’ll also learn a little about how a business works.

Discuss spending on wants vs. needs

Good savings habits will help your child live below their means. Create a budget for kids who might be spending a bit more. By creating a budget, you can help them understand how to spend on the essentials, like food, back-to-school supplies, gas and clothing. When it comes to the remaining cash, you can discuss avoiding impulse buys and how to prioritize savings goals.

Let your kids make mistakes

Now is a great time for your child to make mistakes because the stakes are low. If your child wants to spend their hard-earned money on a short-lived gimmicky toy, let them buy it.

Once they realize their purchase mistake, ask them what they’ve learned and how they can do better. Next time, should they research the product more? How can they remind themselves of their larger goals? What do they enjoy spending money on? Hopefully, when they spend their savings in the future, they’ll spend a little smarter.

Talk about money with your children

Throughout this exercise with your kids, reflect on your own savings and spending. If you want to do better, share that with your children and how you plan to improve. If you accomplish a savings goal, let your kids see your excitement and pride! Honesty and transparency will help both you and your kids grow.

Model Good Financial Behaviour

Just as important as the lessons you teach your kids about money are the ways you discuss and handle money when you’re around them. For example, if you complain about having to spend too much on certain things and then take your kids on a shopping spree, you’re sending mixed messages.

Instead, make sure you model the behaviours around money that you want your children to adopt.

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Read more:

https://www.alliantcreditunion.org/money-mentor/teaching-kids-to-save-money

https://www.forbes.com/advisor/personal-finance/how-to-teach-your-kids-good-money-habits/