We’ve all heard the term “adulting”; scour the internet and you will find all kinds of jokes, quotes, and memes about how hard it is to be an adult. So, what makes it so hard to transition from childhood to adulthood!? This question that could start a lengthy internet debate, but we do know financials would definitely be on that list! How do we acquire money and how do we save it responsibly? These lessons should be taught at a young age, so it’s well understood come adulthood!
Let’s start at the beginning. It will be a challenge for kids to learn how to properly manage money if they do not have any. They can earn money through an allowance, business, or saving gift money that comes their way.
If you decide to set up a chore system with an allowance, be sure to clearly distinguish which chores are for the betterment of the family and which chores they can earn money by completing. Provide a set monetary value to each chore they complete so they can see firsthand that hard work pays off!
Your child can also make money by starting a lucrative business such as a KETO//OS® MAX Raspberry Lemonade stand, lawn care, babysitting, or selling items they have made. Finally, they can acquire money through gifting.
Now that your kids have money, how do we teach them to be responsible with it?! This all depends on the child. Coming up with a save/spend/give system is helpful for children, as this mantra extends to adulthood. It is important to buy what you need (and can afford), help others, and save for what you want or need in the future. Here are a few ideas to teach your kids how to save:
Get an envelope and write what they are saving for on it. Each time they acquire money, have them put part of it in the envelope. When they save up enough to purchase the item they saved for, celebrate their diligence and let them reap the rewards!
Open a savings account for your child. Let them join you at the bank and make deposits. Involving them in the banking process will help them understand and participate more. It will also teach them about interest. The longer they leave their money alone, the greater the reward can be!
Round Up to Save:
Have your kids round up the price of an item they are purchasing to the next dollar. If they purchase something for $10.60, have them put $0.40 into savings. This small amount will have little impact on them in the present, but can easily add up in the future. Talk about the impact of saving now has on being prepared for the future!
If your child is a visual learner, this may be the method for them! Purchase or create a bank that has three separate containers labeled “spend” “save” and “give”. Each time they acquire money have them add to each container. Have them place a picture of what the money in each container will be going to, so they can remember why the money is there. For example, they may put a picture of St. Jude’s Hospital on the give section, a picture of college on the save section, and a picture of a toy they want on the spend section. Include them when taking the SHARE envelope to their charity of choice, CELEBRATE when they save, and commend SMART spending.
Raising a child to have financial literacy starts with YOU! Keep them involved in the process. Don’t underestimate their ability to understand and learn the importance of money. The more they learn about the process the BETTER, and they will learn through your example and encouragement!