Tips for Teaching Children to be Money Savvy
Did you know there was a Money Savvy Pig to help you teach your children about money? Did you grow up understanding how to be money savvy? No? Me either. I did what most of us did..over spent, got into debt, and then worked like crazy to dig myself out. Fast forward several years and several children later, my husband and I started searching for ways to make sure we were teaching our children to be money savvy so they didn’t have to struggle with managing money as young adults. Here are our top tips that you may find helpful.
Start Teaching Early
How early is too early to start teaching abut money management? My thoughts are as early as when your child starts asking for things they see on the television or while shopping. Will they understand? Probably not, but they can start learning the their parents work for the money needed to buy the things they want and need.
Teach Saving and Planning
Spending everything you make is exciting. But when you do, you are limited in what you can buy based on your cash on hand (or allowance). We wanted to teach our children that you can’t and really shouldn’t always get everything you want as soon as you want it. Learning that saving and planning for purchases makes you appreciate them more (which for children means they will take better care of the items so they last longer).
Teach Responsibility of Giving
Giving to others is an important part of being a responsible adult. It has to be learned as a child. Whether it is helping someone by taking up the trash cans after pickup (this was a big thing for our little ones) or giving to a family that is suffering, compassion has to be learned by doing. Children have such caring hearts, using this time to teach the love of giving to others sets them up for a life of doing good because it is the right thing to do.
Teach Responsible Investing
Not many children will understand investing, heck, not many adults really understand the ins and outs of investing but as they grow up and you transition to a bank account, learning about interest and the stock market opens a while new world. My teens all had investment accounts and learned about stocks and bonds while their money investment was small.
How to Start
Most of us had piggy banks growing up. All our money went into the piggy bank and when it was full we broke it open and spent all the money in it. No? That’s not how it worked at your house? Yeah, mine neither. My crew could get money out of theirs any time they wanted. We encouraged them to not break the bank until it was full but that is something that comes over time and maturity.
Now we use a four compartment piggy bank by Money Savvy Generation. This new twist on the piggy bank has four sections that are labeled Save, Spend, Donate, and Invest. It also comes with stickers that can be placed as a reminder to your child what they are saving their money towards.
Each week when it is time for the little ones to cash out their job jars (we don’t do allowance, they earn money by doing extra jobs above and beyond taking care of their personal area and things); we total their earnings and then discuss how much they will be placing in each compartment.
Depending on the age of the child, it may be as simple as placing a dime or quarter into each compartment; or as complicated as them deciding on a percentage of their money to be divided up.
As they grow up and their purchasing desires start to cost more, they have to learn to budget and save for a lot of purchases. We also have an agreement that we will match their savings and investment amounts up to a certain amount each year to encourage them to take planning for the future seriously.
By starting the process of understanding money management early, our hope has been that our children grow up with the skills necessary to transition into adulthood without the financial burdens that we had to live through years ago.
What tips do you have for teaching children to be money savvy? I would love you to share them in the comment area below this post. And if you leave a comment with a tip on being money savvy; we will select one name to win a Money Savvy Pig from Money Savvy Generation. Or you can also purchase your own Money Savvy Pig at www.MoneySavvy.com or on Amazon.
Make sure you enter through the giveaway form so we have a way to contact you if you win. Good luck on your entries!
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