Early Money Saving Habits
A lot of adults wish their parents had taught them more about money management and saving. A lot of people don’t even learn about credit or taxes until they’re young adults, and by then, it’s too late to form good habits. To give your kids the boost they need, participate in fun budgeting games and let them participate in household earnings. They’re never too young to start, and there are age-appropriate ways to engage every kid!
1. The Store Game
Taking your kids shopping may sound annoying at first, but it doesn’t have to be! In fact, this is a great teaching moment, and they can even help out. For instance, tell them they only have $20 to spend and need to find enough ingredients for a filling dinner. Then watch them get to work doing the math.
2. Give Allowances
One of the best ways to introduce your kid to the world of money is through allowances. Usually, you start with a smaller number when they’re young, giving a more reasonable number when they’re older. For super young kids, it may be $20 a month, while older ones could get closer to $100 or more.
3. A Piggy Bank
For younger kids, a piggy bank is a super fun way to introduce banking and saving. They can use coins from the tooth fairy, or those you give them, to hide away money they can no longer access. Then, when the bank is full, they can either break it or unclog it to spend their earnings.
4. Give Them Money, Not Items
Instead of giving your child toys or treats, when they’re old enough, give them money instead. This will teach them the value of money and will introduce the idea of saving up early on. Rather than getting that PlayStation when they ask for it, they’ll have to save for it.
5. Model Smart Spending
Sometimes it’s easy to tell kids to do as you say, rather than as you do. However, showing them smart spending will paint a better example. Show them how you use coupons, how you stick to flyers, and how you also have to sacrifice your wants sometimes.
6. Open A Savings Account
A lot of banks offer early savings accounts for kids as young as 14. Once the account is open, you can show them how to look at it, how to deposit money, and how to review statements. Then, you can even have them use this account to achieve saving goals to buy items they want.
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7. Differentiate Needs and Wants
A lot of kids want things, and they may come out crying and screaming about just how badly they want a given item. That’s why you need to teach your kids the differences between needs and wants. Sure, they want it, but do they need it?
8. Earn Money Through Chores
Chores are a great way for kids to help out around the house and support their parents early on. Of course, you don’t want to parentify the kid, but it’s important for them to learn responsibility through doing dishes or mowing the yard. To incentivize them further and teach them about money and jobs, consider giving them a dollar or five every time they successfully complete a chore.
9. Set Saving Goals
Having your child set savings goals early on is a smart way to learn about money management and budgeting. Perhaps you tell your child if they want the newest game console, they have to save up for it. Of course, you’ll have to help them out with reward money, chore money, and maybe even finding a part-time job.
10. Use Money As a Reward
A great way to incentivize your kid is to use money. Rather than reward them with a toy or a chocolate bar when they get a good score on a test, give them $10 instead. This way, they are incentivized to earn more to buy bigger items.
11. Find Part-Time Jobs
Once your kid is old enough, it’s time to get that part-time job. This isn’t about you making money, but rather them learning about the working world, responsibility, and money management. A lot of parents worry their kids need to focus on school, but a part-time job teaches them important life skills about the real world they will need.
12. Explain Credit
Credit can be very confusing for a lot of young adults, especially when they don’t have any financial background. With that in mind, explain the concept of credit when your child is old enough. Tell them why it’s important to build up and how to avoid predatory interest rates and pay off loans properly.
13. Show Them Flyers
A big financial hack for adults is to use flyers when grocery shopping. This means you check out the local sales and deals ahead of time and plan your meal around that. Next time you go to the store, hand your kid the flyer and have them identify and find the products in the store.
14. Teach Budgeting
When your kid has a grasp of mathematics and the value of money, it’s time to introduce budgeting. You can have them make their own spreadsheet or use a journal, but essentially, you want to show them how to plan with their money. Have them set a savings goal and help them budget to achieve that goal.
15. Comparison Shopping
When your kids accompany you shopping, use it as an opportunity to teach them about comparisons. Show them how one item is $30 at one store but might be $20 at another store. Show them how Dollar Stores are good for certain products, while others must be bought with quality in mind.
16. Be Financially Open
A lot of parents keep their finances a secret, but this can leave kids in the dark. While you don’t expect a 6-year-old to understand the concept of rent, a 16-year-old is a different story. With that in mind, tell them why you can’t buy certain things, or why you need to try to save money in certain months.
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17. Teach Through Mistakes
If your child messes up, let that become a learning moment. For instance, they might not have enough to pay a certain bill, or they were trying to save up for a game, only to find themselves short on the launch day. Don’t punish them for this behavior but encourage them to keep at it.
18. Praise Smart Spending
When you see your child practice smart spending, be sure to praise them. For instance, they might forego buying something small in the moment to save up for something bigger. Or they might start putting money aside for a later fund.
19. Help With College Savings
When your child is bringing in money, you can have them begin saving up for college. Lots of parents help their kids with college, but not all can. Even without money, there are plenty of scholarships, payment plans, and even student loan options to consider. As a parent, you can help them navigate the upcoming college world.
20. Charge Rent
Finally, as your child reaches their later teens and has been working diligently part-time, it’s time to introduce some bills. You could have them pay for their phone, cover their gas, or pay a small portion of rent. This isn’t about making money as a parent but rather teaching your child the process of paying bills. You can even save all the money they give you and give it back to them as a down payment starter.
