You’ve dealt with budgeting, saving, and spending for most of your adult lives. This is the fun part! Teach your kids how to be smart about money. These lessons can be taught to your children at an early age, so they will have good money habits that will last a lifetime. These seven tips will help you teach your kids the importance of saving and budgeting.
7 Tips for Raising Money-Smart Kids
1. Get started early
Even if your child is young, there are many opportunities to teach money skills to them every day. You can teach your child about money by letting them count the money or letting them pay the cashier when you shop. To help them learn about saving, you can give them a piggybank or a clear container so that they can see how the money grows. Let your children save enough money to buy the toys they desire.
2. Tell Them Your Saving Plan
You can teach your child the importance of saving and opening a savings account for them. Regular deposits from allowances, birthday money, holiday money, and other funds can be made. As the account balance increases, you may be able to discuss the concept of interest together. Talk about how interest is earned when you have more money than you put in savings.
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3. Set an Example of Excellence
Your child is your first teacher. So be open to learning from your mistakes. Talk to your child about how you save money and what these decisions mean. Don’t be afraid of sharing money mistakes that you have made in the past. This will help them avoid making the same mistakes.
4. Instill the Responsibility for Spending
When children reach their teenage years, Consider opening a joint checking account with your children and linking it to a debit card. You can help them develop responsible money habits. You can then help them open a credit card if they are ready to take on more responsibility. Explain to them that a credit card requires sufficient funds to cover the monthly payment. These are steps that can be used as lessons for managing and monitoring one’s own money.
5. Track Your Expenses
Once they are able to deposit money in the bank, you can teach them how important it is to budget what they have. You can let your child use any of the many apps available on their smartphone for budgeting and tracking expenses, depending on their age. You can also introduce the envelope strategy. This involves dividing your expenses into budgeted categories and setting aside cash envelopes for each category. This will help young children see exactly where their money is going. In order to encourage saving, make sure they have a section of their budget that isn’t being spent.
6. Go Paperless, Use an Online Banking App
There are apps for everything, even the bank. Burke & Herbert Bank offers free Mobile Banking Apps for iPhone®, iPad®, and Android™. These apps make it simple to check balances, view transactions, pay bills, and transfer funds. You can also deposit checks directly from your smartphone or tablet. This will allow your child to have their banking in their hands which means that no excuses for people not being in control of their money!
7. Keep the Conversation Going
Keep talking about the importance to budget and saving as much as possible. As they get older, your children will be faced with new financial responsibilities. They can be helped with taxes, credit reports, mortgages, and even retirement planning. It is important to start the conversation early to help your children develop smart money habits.