It’s never too early for parents to start talking about money with their children. In fact, you might be surprised by how young of an age children become aware of things they want some of which can be costly. Kids are interested in toys and clothes that their friends have or that they see advertised. As a parent, you want your children to understand the value of these items as well as the value of the money they cost. This is why it is important for parents to teach their children the value of saving at an early age.
During the month of August, MSUFCU is encouraging youth and their families to “Be Credit Union Strong.” By following these five tips, your young children will become money savvy in no time.
- Share your financial wisdom. Even if you don’t think you know everything about money management, you still have more experience than your kids and will be able to pass on what you’ve learned. Start by having your children help you choose a type of cereal to buy based on the current sales or coupons you have to use at your local grocery store. Learning to make choices early on that result in savings will help them to become more money-conscious.
- Match the lessons to your children’s age. With kindergarteners, for instance, begin by explaining the different types of coins and dollars that exist, followed by the ways to save them. When they have received birthday money or have earned money from chores, try having them put their earned coins in a piggy bank. Show them how their savings has grown each month by scheduling time to count the amount of money in their bank with them. When kids are in elementary and middle school, they develop a better understanding of how much a dollar will buy and how to save for short-term goals. Help them understand by differentiating between their needs and wants, and explaining how saving money from chores can help them reach their goals of buying something they have had on their wish list. As kids move into high school, you can expand their financial responsibilities to include paying for some of their own clothing, entertainment and gas when they use the car. Encourage them to get a summer job, and help them manage their own checking account.
- Let kids manage money on their own. When everything they want and need is given to them, kids can have a hard time understanding the value of money. When they have to use their own money, however, it may change their mindset about whether or not they really need that new toy or gaming system. An allowance is the best hands-on tool for children who are too young to earn money with a job, and will teach them financial responsibility at an early age.
“To make the connection between work and pay, let children earn extra money by performing extra jobs around the house, such as taking out the trash or recycling, mowing the lawn or washing the car. Avoid giving them money for basic household chores that they’re expected to do anyway, such as doing the dishes and making their beds,” said Deidre Davis, Vice President of Marketing and Communications at MSUFCU.
- Show kids the value of saving. Piggy banks are helpful when teaching children how to save, or you could open savings accounts for them at your financial institution. Kids may not understand that it takes planning and saving to be able to make large purchases or go on a family vacation, but encouraging them to start saving when they’re young will help them build a savings nest for the future. Teaching them these skills early on will also create awesome habits and help them to begin to understand the big picture of saving.
- Use everyday situations as learning opportunities. Putting money management into practice with everyday situations is the best way to teach your children positive saving habits. For example, if your 13-year-old wants a new video game system, use that opportunity to explain savings initiatives and goals. Children can learn when they’re young that money doesn’t grow on trees. “Having to save for big purchases will help them understand the value of their hard work and money,’’ said Davis.
MSUFCU is inviting youth members and their families to be a part of their annual Kids’ Day celebration on Saturday, August 6, 2016, from 12 p.m. to 2 p.m. at MSUFCU Headquarters in East Lansing. Children and their families will enjoy giant inflatables, prizes, crafts such as creating your own superhero mask, free lunch, and much more! For registration details, visit msufcu.org.