Teaching children the basic principles of financial literacy can set them up for future long-term success. Kids mimic what they see their parents do from a very early age, so parents must take extra care to set good examples. Consistency and open dialogues about money are essential when raising financially responsible children. Check out our tips below to help your household stay the course.
Explaining finance to kids
When explaining finance to kids, start by showing the value of everyday objects. For instance, take them to the grocery store and demonstrate why you chose certain foods based on price. Show the differences between brand, generic, BOGO sales, and specialty items. It all adds up, and the grocery store is a great way to explain variances in value.
As your children grow older, you may want to consider giving them a spending allowance during the grocery store trips. It does not have to be a lot; however, as little as 5 dollars can teach them good decision-making and budgeting skills.
Creating a money system for your kids
Incorporating a money system within the household is another beneficial way to raise financially responsible children. If you don’t have one yet, get started with these simple steps:
1. Decide the amount they will earn each week.
2. Explain any predetermined savings rules.
3. Assign chores or tasks in exchange for the earnings.
4. Keep a chart to record completed work.
5. Payout cash monthly in a consistent manner.
After establishing the money system, monitor your child’s spending habits. In addition, provide a piggy bank to monitor the amounts they agreed to save. Are they withholding their end of the plan? Use the opportunity to prepare, teach, and guide them to a successful monetary future.
Opening a child’s first savings account
You can level up your household money system by opening your child’s first savings account. Achieva Credit Union provides Kids Make Cents accounts for children under age 12. They get a membership reward for joining and a $25 bonus on the account’s first anniversary¹.
To open an account, call 727.431.7680 or visit a local Achieva branch. It’s an excellent way to administer real-life banking transactions for your child.
Financially responsible children grow into financially responsible adults
It’s true. The more children practice using money, the better they become with it. With a consistent routine, they become more confident and comfortable with managing their money, which will help them make better financial decisions in the future. It’s crucial to encourage children to start saving as early as possible and provide them with guidance and support along the way.
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¹All programs, terms, services and conditions are subject to change without notice.
