Teaching children about money at a young age will be helpful for them later in life. Here are four ways to boost your child’s financial knowledge!
Start with basic budgeting. Successful budgeting is the foundation of every financially independent household. You can introduce your children to the concept of earning money and spending it mindfully when they are still young, and then build upon that knowledge as they grow older. Preteens can watch you work on an actual budget, and teens can even assist you in creating a budget for a large expense, such as a family vacation.
Another way to bring this lesson home is by showing your children how to budget their own money. Help them create columns for “income” and “expenses,” listing their allowance, occasional gift money and income from any jobs they may have in the income column, and the ways they would like to use their money in the expense column. Show them how to divide their money across their expenses in a reasonable fashion and talk to them about setting aside money for the future.
Split the costs of “must-have” items. If your children are like most, they will likely be asking you to purchase trending items they claim they absolutely need. As a parent, you may be inclined to give them what they want more often than you would like. A great way to compromise is to have your child pay half the cost of these expensive items. They will quickly realize that what seems like a “must-have” really is not when you are the one paying half the bill.
Teach them about credit cards. To a child, a credit card is a magical piece of plastic that makes everything possible. If your child observes you using a credit card or debit card often, you owe it to them to teach them what is behind that little card. Show them your credit card bill when it arrives in the mail and talk about how you need to pay for all those expenses plus the interest you may incur. Teach them about debit cards, too, explaining how money is withdrawn from your checking account when you use the card. It is also a good idea to give older children a quick rundown on credit scores, how they work and why they are so important.
Open a savings account for your child. Experience is the best teacher, and giving your child their own account can be an excellent way to teach them how to manage their own money. This first account opened and managed under your watch will help them transition easily into truly handling their own money as financially independent adults.
With a SeaComm Moola Moola Account, your child will receive quarterly statements, have online access to their account, and even earn dividends on balances over $5. This exposure to finance will help to prepare them for money management throughout adulthood. Click here to get started!