Money Lessons For The Whole Family And Where To Find Them
The key to helping your little ones understand the way money works is by talking about money and finances often. Ideally, you’ll get started before age 8. Why? A study from Cambridge University shows that financial habits tend to be pretty engrained by age 7. In other words, by the time your child lands in third grade, they’ve probably formed their thoughts around money. That’s why starting conversations with them about dollars and cents while they’re still a preschooler is best.
By about age 5, kids can start understanding and embracing logic and math. They might not be ready for a symposium on the economic ramifications of long-term inflation on the average household, but they’re certainly primed to process the basics.
But all too often, families don’t take the time to explain what it means to earn, save, spend, and budget. Thankfully, it’s easy for parents to start today. There are tons of easy ways to help your child grasp important money concepts in a fun way that won’t overwhelm them. Here’s a rundown.
Teach Them About Wants vs. Needs Using Examples From Your Own Life
Do you wear an inexpensive watch instead of a pricey smartwatch? Do you use an older phone instead of the newest model? The next time these things come up, explain to your child about needs vs. wants. For example, no one “needs” to upgrade to the latest gadgets, or to wear designer brands. When children are young, they don’t always understand the difference between wants and needs, but once you explain the importance of making affordable choices, it helps them grasp the concept.
Learn Budgeting Via Toys
Try teaching your children how to prioritize their wants and be active in the purchase decision-making process — oftentimes via toys. To help children gain an understanding of budgeting, give each child a “Save Jar” where they can save their money, and a “Spend Jar” for designated splurges. Whenever a new toy piques their interest, it sparks a conversation.
Make Your Savings Goals A Family Affair
Whether you set up a savings account online or put spare change in a jar on the kitchen countertop, your kids need to be able to visualize how quickly money can grow. To walk them through the concept of savings, break down some of your own habits, such as eating lunch out vs. packing a lunch, or stopping at Starbucks vs. making your own coffee. At the end of the week, you can let them know how much you’re able to put into your savings account because of the smart decisions you made.
Then, together, you can celebrate every $100 that goes into your savings. Occasionally, you can dip into the account to do something special, like eat at your favorite restaurant, or you can save up for a big family trip! This can be a great lesson to your child that waiting for something can absolutely be worth it.
Use Their Allowance To Kickstart Money Conversations
Whether you can afford to give your child $5 a month or $10 a week, allowances help teach important money lessons at an early age. An allowance helps your children see how money can be earned, and gives them a better sense of what you mean when you say you get paid for your work.
CU Succeed Accounts at RGCU
When your kids and teens are ready to start a savings account, bring them to Rio Grande Credit Union and open a CU Succeed account. The CU Succeed account is specifically designed for 13–18 year olds, and lets them save and spend securely.