Even if your kids are far from adulthood, it’s a good idea to teach them at a fairly early age the staples they’ll need when they’re all grown up and out on their own.
Otherwise, you could wind up with a panicked phone call from your adult child later on (when they’re clueless) on how to perform even simple tasks such as drawing money out of the bank. Teaching life lessons now, such as how to manage money, will lead to functioning adults later on.
Here’s some tips to help you educate your child and at what age it’s appropriate:
Ages 5-10:
- Choose between a chore based no-strings attached allowance, or one that combines a base amount plus bonuses for chores.
- Let your child know the conditions for getting an allowance.
- Set the amount for each. One rule of thumb: 50-cents to a dollar per year of age.
- Define spending guidelines. Otherwise, they’ll go on a spending frenzy.
- Establish an amount to be saved. Offer a piggy bank so they can keep track.
- Be consistent. Give the allowance on the same day each week, such as Friday.
Ages 11-13:
- Set up a meeting with your child and a bank manager to discuss the difference between a checking and a savings account, monthly charges, fines, and interest rates.
Ages 14 and up:
- Have them open a checking account
- Agree on how their pay should be used. Will some be saved for a car or college?
- Discuss taxes and show how FICA and income taxes are deducted.
- Introduce the “paying yourself first” concept. Encourage them to deposit some of their money into a savings account before spending any of it.
- If you want to allow it, let your child sit with you as you manage your check book to give them an insight as to what amounts go where, how to keep track of money deposited and deducted, etc.
Whether you know it or not, YOU are your child’s biggest role model, and your son or daughter is likely to imitate the things they see you doing. For that reason, if you want to teach your child the value of saving by, say, using coupons, it’s probably important to use coupons yourself. It may also be helpful to draw extra attention to your use of coupons. For example, while at the grocery store take the time to find coupon items and point this out to your child.
Getting a little creative with how you choose to teach your son or daughter about the value of money and about saving money not only is a great way to bond with your child, but you will be teaching them an important, life-long skill.
MAKING BUDGETING EASIER!
Thankfully Genworth Financial offers a budget calculator (which can also be a helpful tool for you and your child) when trying to estimate your cash flow to cover the “have-to-haves” and “nice-to-haves” in your life— such as life insurance.
Still need a little help yourself in taking charge of your own money? Check out Women and Money: Why You Need To Take Control Now. It’s a great article written for women because being financially savvy doesn’t have to be simply about making more money just to increase your bank account.
~ Information for this post is supported by Genworth Financial in partnership with the SheHeard Influencer Network. I received compensation for this posting. My opinions and tips are my own! ~
© 2013, Dee @ Bella Savvy. All rights reserved.
Dee
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9 Responses to Tips for Teaching Children about Money and How to Save #SHGenworth
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These are great tips! We’ve done a lot of these thing with our teens. And any allowance they got – we made them split it. Half went in their account and half they could do what they wanted with.
That’s a good tip too Danielle!
Thank you for the VERY important post. I read the article as well and thought it was a must read. THANKS SO MUCH!!
I really couldn’t agree with this post more! I actually think basic money should be taught at home AND in school because by the time kids are graduated, rarely do many of them know what they’re doing with even the basic of tools like a savings or checking account!
I think it’s so, so, SO important to start kids off early with an understanding of money.
Great tips!!
Awesome ideas here. I’ve always said there should be a class on this in high school because it’s confusing but important!
Excellent article. Kids need to appreciate money. Not expect everything to be handed to them.
I totally agree Lisa!
All of these tips are so important! I am 29 and have way too many friends who can’t afford to eat sometimes. I wish I could go back and teach them these things!
I always think that this is common sense, but it really isn’t… I taught my son to sew on a button, do his own laundry… be able to make a few go to meals…but I didn’t teach him about budgeting and money before he left for univ… thankfully, he only had a few rough patches his freshman year…and he learned (we’ve been a fairly frugal family for years, so he didn’t see a lot of reckless spending…but still…) I’ve rectified this with my other three kiddos, especially the one grad. from hs this May…he’ll be leaving soon as well and I want him to be just as careful as his brother has been..