Tips for Raising Financially Aware Kids
Raising kids is a huge responsibility. As a parent or guardian, you hope to teach your child the difference between right and wrong, the value of hard work, to be kind to others and a number of other things that will undoubtedly shape them into their future selves. One of those topics that is sometimes difficult to approach is how to be financially responsible.
We’ve compiled a short list of things you can do with your child to teach financial responsibility in a fun and interesting way.
1. Involve your child in budgeting conversations. You don’t have to completely breakdown your budget, but consider including them in some of your regular financial decisions, such as grocery shopping. This is a great opportunity to get them thinking about the prices of items they regularly consume and it teaches them how to shop for what they need while staying within a certain budget.
2. Consider providing an allowance. It’s important for kids to understand where money comes from and how work equates to a paycheck. Providing an allowance for chores is a great way to implement this early on. Depending on the child’s age, chores might include: setting the table, washing the dishes, taking out the trash, mowing the lawn, cleaning their room or even picking up a common area in the house.
3. Make it a point to talk with kids about the importance of saving a portion of what they earn. Find three mason jars and designate one as “save,” one as “spend,” and one as “share.” Explain to your child that whenever they earn money, a predetermined amount should go to each jar. For example, if you child earns $10, they should put $3 in the save jar, $5 in the spend jar, and $2 in the share jar. Ensure that they understand the point of each jar:
- The save jar is to be used for long-term financial goals, like a new bike, car at 16 or paying for college.
- The spend jar can be used if there is something your child needs or wants right away. Examples might include going to the movies with friends, buying a treat or putting gas in their car.
- The save jar is a good way for your child to help others in need. Encourage your child to think about what’s important to them and put money in the share jar that can be donated to that cause. For example, if your child loves animals they may want to donate their money to a local dog and cat rescue.
4. Bring your child with you to the Credit Union. It’s important for children to understand the role of a financial institution in daily life. When they see you get cash at an ATM or pay for items using a debit or credit card, it may cause confusion about where that money is coming from. Bridge that gap by bringing them with you when you visit the Credit Union.
5. Open a youth account and utilize resources provided by your Credit Union. At MSU Federal Credit Union and OU Credit Union, we offer youth account members educational contests, free gaming apps, newsletters and more to help them learn about different money topics. Learn more about our youth accounts by visiting https://www.msufcu.org/youth/.