Whether you have children ranging from a toddler to a teenager, it’s always a good idea to begin preparing their financial journey through training and education. Here are 6 ways you can start their financial journey to implement good money habits:
Create an opportunity to earn money
Giving your child an allowance for accomplishing household chores such as cleaning their room, doing laundry, or washing dishes allows a real-world scenario of work and compensation to play out. To better prepare them for the future, you can show them that by doing jobs around the house, they can then earn money. Allowing your children to handle money at early age will equip them for spending, saving, and banking decisions. Watch your child become excited and eager to help around the house to potentially earn money.
Check out this list that includes an average weekly allowance amounts by age.
Have them set a goal
Perhaps the best way to learn about saving and spending is to implement real-world scenarios. If there is something your child has been asking for, such as a new toy or pair of shoes, encourage them to begin saving for it. Have them track their savings goal with free printable savings trackers. By saving for a desired item, your child will see the importance of a dollar with every saving. Similarly, they will feel that much more accomplished when they are able to purchase the item with their own savings!
Read about it
Use literature resources to begin making the subject of money a more comfortable conversation to have with your child. Check out this list of money topic books that range from kindergarten levels to high school levels. These age-appropriate books can help equip your child with money-management lessons. Consider visiting your local library and using it as a lesson for your children that renting books ultimately saves money versus buying them.
Model good financial behavior
To prepare your child in developing good financial decisions, it’s important to model behavior that includes good spending and saving habits. Practicing making smart choices regarding spending and saving requires consistency and grace. Modeling good behavior can be as simple as expressing gratitude for the things you have, rather than complaining about lack of material items.
See areas in your financial life where you can implement good financial behavior such as giving. Teaching this value to your child an early age will instill a sense of pride and self-esteem and will ultimately become character traits that continue to grow with them.
Talk to your children about finances and involve them in decisions
Consider opening the door of conversation about finances to your children. While we don’t want to burden them with financial obligations, you can have an open conversation that sets the foundation for real-world scenarios. Let them weigh in on decisions, such as things to do on a vacation. Have them set a budget and see where you align with the budget. Another way to implement this is to allow them to help shop for your family groceries. Have them list the groceries needed, how much they think they cost, and how much you plan to spend. Go over the receipt of items purchased and show how they aligned with their guesses. By allowing them to take part in financial transactions, their financial foundation for their own decisions will begin to take place.
Set up a college fund
One of the best ways to prepare your child for the future is to plan for it. Setting up a college fund for your child allows them to begin a new chapter of their lives without the burden of school loan debt. College expenses quickly add up, so allowing yourself to save for it now helps for the future. In fact, according to Education Data, “The average in-state student attending a public 4-year institution spends $25,615 for one academic year.” If college is not the route your child takes, those funds can be used for trade school needs, living expenses, or kickstarting a business.
Call or visit Eastex Credit Union to discuss automatic transferring a portion from your paychecks to begin saving for their future.