Who remembers their first summer job? It could have been mowing lawns, babysitting or taking care of the neighbors’ pets while they were away on vacation. No matter what that job was, there’s a good chance that each “payday” resulted in earnings being stuffed into a jar or box that ended up under your bed and pulled out when the ice-cream truck rolled by.
Well, times have changed and so have our expectations around how we manage our money. That also trickles down to educating our kids on proper ways to save and manage their money as they start to earn their own “fun tickets” (as we used to say in the olden times).
Here’s eight simple ways to start working with your kids to get them to understand the value of their money.
1) What do you want vs. what do you need – The classic conundrum. Who hasn’t been there? We want that shiny new object, that one thing that all the other kids have. But, is it really something we need? This is an important lesson to talk about with your kids. Getting them to see things in the “want vs. need” perspective will help them start evaluating their purchases in a more educated and less emotional way.
2) Success tastes sweetest when it’s earned – Allowance is a beautiful thing when you’re young but it’s also something that should be earned. If you have young kids who are not yet old enough to join the workforce part-time or in the summer, offering them allowance in return for doing various chores and tasks around the home gets them engaged in the idea of earning a wage. This is a great way to start teaching them the value of their hard-earned money.
3) Offer savings incentives – If your child has their eye on that one thing that they are working so hard for, you can help motivate them to save by offering a matching incentive. Like the general concept of your company’s 401K plan, for every dollar they earn you can offer to match it. It’s a great way to keep them motivated and incentivized to save.
4) Be realistic about savings goals – One of the hardest things for kids to grasp is the concept of how long they must save to achieve their goals. If a child is working to save up enough money for a new skateboard, you can work with them to help them understand how much money they earn each week and how many weeks/months it will take for them to have enough money to purchase the board. This helps your kids understand the importance of setting realistic goals for saving.
5) Paying attention to the details pays off – Helping your child set up and track their daily spending is a great way for them to see exactly where their money is going and for what purpose. As soon as they start adding up how much money they’re spending on the daily ice-cream truck, and why they’re funds aren’t growing at the rate they were hoping, they’ll start to see the light.
6) Keep the conversation about money open – Sometimes talking about money can seem or feel uncomfortable. We’ve learned that part of our social/cultural norm is that asking people how much they paid for something, how much they earn at their jobs, etc. is not typically socially acceptable. But that doesn’t mean that we shouldn’t keep the conversation about money open and honest in the home. It’s important to talk openly and honestly about money and how money is saved, spent and borrowed with our kids. It lets them know that it’s an important part of our daily lives and something that should be openly discussed at the family level.
7) Set the example – We set the example for our kids in everything we do, and our financial health is at the top of that list. Properly managing your household money, savings, retirement, and investment funds helps to ensure that your kids will learn solid money management skills.
8) Nothing say’s “I’m saving money” like a checking or savings account – Opening up a checking or savings account is the perfect way to send your child in the right direction for managing their money. The ability to instantly check your account balance on-line or through our mobile app is quick and convenient. You can also transfer that allowance directly into their account and they’ll get the satisfaction of seeing that balance increase each week.
Times have certainly changed since the days of stuffing money into our piggybanks. Watching our kids start to earn their own money and save for those special items they want to buy takes us back to familiar times. Helping our kids understand the value of their hard work and the value of the money they earn is part of the job, and something we should all take the time to help with and enjoy. One of the easiest ways you can start this process with your kids is by opening a new checking account at First Security Bank. Click here. FDIC, Equal Housing Lender.