How to teach your kids great money habits
Good habits are reinforced with regular action. When those habits are taken seriously at a young age, the foundation is in place for lifelong benefits. Perhaps the most important youth lessons involve money; after all, financial literacy doesn’t have to wait until your child is eligible for a credit card.
Today, kids are surprisingly aware of the world around them. In fact, children as young as 5 years old start to develop attitudes toward money and finance. Many experts encourage parents to talk about finances with their children. According to Eric Tyson, author of Personal Finance For Dummies®, 5th Edition, “Sheltering kids from financial realities does them no favors.”
What’s the best way to teach your kids sound money habits? Here are seven ways to start your own Money 101 class:
- Start a Savings Account. Savings-friendly habits can start early. Go with them to a branch to make monthly deposits of allowance or spending money, and watch the bankroll grow every month!
- Give an allowance. Even for young children, the value of a dollar earned resonates. Create a to-do list for your child at home, then pay at a per-chore or per-week rate. The more work, the more money your child receives. Added benefits for you: a house with less clutter, and the garbage is always set out in time for the garbage truck.
- Talk about bonds, mutual funds and stocks in layman’s terms. Real wealth begins with a firm knowledge-base that extends beyond simple savings plans. You can also sign your child up for a parent-approved stock or mutual fund account. As they grow older, the accumulated savings will speak for itself.
- Establish a loose change bin. Every time your child has coins change, toss them into an empty container. Every so often, deposit the amount into their account. Better, yet, use our Mission Fed Coin Counters to count and roll their loose change—this will teach your children that small deposits can add up to big payoffs.
- Go with the 50/50 plan. Whenever your child receives cash (from chores, their birthday, etc.), have them take half of the money and put it in their savings account. It may be tough at first, but soon enough this “out of sight, out of mind” principle becomes second nature.
- Mind your own habits. If you’re running up credit card debt, stressing about bills and not saving for the long term, your children will most likely pick up those bad habits. Come to grips with your own financial reality before trying to teach your child.
- Schedule game night. Remember the era before smartphones, when parents and kids played board games? Games like Monopoly and Life are entertaining, and they also teach sound money habits in a lively, learn-as-you-go method.
Mission Fed’s branch network and online resources make us a perfect partner for your child’s financial education and ever-changing financial goals. With a full suite of accounts, we can assist you and your child with both short-term and long-term plans.
To learn more about our Credit Union and how we can help you find the right account for your financial goals, visit a nearby branch, or call us at 800.500.6328. Together, we’ll find ways for your entire family to live smart and bank smart!
The content provided in this blog consists of the opinions and ideas of the author alone and should be used for informational purposes only. Mission Federal Credit Union disclaims any liability for decisions you make based on the information provided. This article contains a link for a website that Mission Fed does not control. Mission Fed is not responsible and does not assume liability for the operations, content, links, privacy or security policies of third party websites.
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