Every parent wants what is best for their kids. What better way to ensure your children’s future success than instilling proper money management? Teaching your children about finances is one of the best ways to set your kids up for success. Many of us had no idea how to manage our money when we moved out or went to college, because schools don’t teach us that, but you can be sure that your kids don’t go through what you did by starting young, and starting simply. Teaching kids about money doesn’t have to be some lesson you drone at them that will go in one ear and out the other, instead, have fun with it! Participate with your children and show them that properly managing money doesn’t have to boring.
One of the best lessons you can teach your kids is, “sometimes you have to wait for what you want.” While this seems like a no brainer, it is an important lesson to teach your kids early on. While this principle can be applied to many instances in life, perhaps one of its most important applications is when it comes to finances.
One thing to keep in mind is that little eyes are always watching you, and as a parent you know all too well that kids hear and see everything. This means that you have to be setting a good example for them to look up to. So here are a couple ideas for instilling good money habits.
Keep a piggy bank
While this is one of the most basic money lessons for children, there is a twist. Instead of using a typical piggy bank, use a clear glass jar. This will allow your children to watch their savings grow and get excited, it also demystifies saving money from being unseen, to right up front while knowing how much you are saving.
You can also take the piggy bank one step further. Instead of just one saving jar, use three jars labeled “Spending”, “Saving”, and “Sharing”. The idea is simple, whenever your child gets money, split is equally between the three jars. The spending jar should be used for small purchases like candy or small treats. The sharing jar should go to a charity or donated to something of your child’s choice. Savings should be used towards a goal of your child’s choice.
One thing to keep in mind when your child is saving is to make sure whatever they want is not too pricey. If your child is saving up for too long they can become disheartened, make sure whatever they want can be obtained in a few months.
For more information on teaching money smarts to your children, visit our Youth Banking page to set up a savings account, or to get a Moonjar Moneybox.