With a new school year approaching, schedules quickly fill with school and extracurricular activities. It seems like there is never enough time to do all that we want. With that said, it is easy for good intentions like teaching your kids about money and financial responsibility to get pushed aside. While summer is still here, now is a great time to prioritize starting good money habits for your children.
When you think back on the knowledge your parents passed on to you, maybe you are glad to have learned good money habits at a young age, or perhaps, you learned some things later in life you wish you knew at an earlier age. Regardless, we are here to provide you with 5 tips for teaching financial responsibility to your children to ensure they have a bright financial future.
1. Provide opportunities to earn money
To save money, they must first have money. While your kids may have money gifted to them for birthdays or holidays, there are ways they can earn money around the house and around the neighborhood. Aside from learning the value of a dollar, job opportunities help teach responsibility, hard work, and gives kids something to feel proud of. You can implement these opportunities at home with an allowance in exchange for chores. You can also encourage them to take part in other opportunities such as walking a neighbor’s dog, opening a lemonade stand, doing yardwork, or another activity that suits your child’s interests.
2. Create a habit of saving
When your kids receive money, encourage them to think twice before spending it. While it can be fun to make the occasional purchase, having money in the bank will be more exciting in 10 years than a toy collecting dust in the basement. If you help your kids develop a mindset of “I’m going to save this” instead of “How can I spend this?,” these small habits compound into a lifelong practice of financial responsibility.
3. Think twice before purchasing
To encourage intentional spending, have your child wait a period before making a large purchase. This can vary from a week to a month or more depending on the purchase size. You can also encourage your child to set a short-term savings goal for special events, such as a book fair or family vacation, where they want to spend money. This keeps them from making impulse purchases and gives them time to think about if they really want the item they are considering. They may decide they don’t want it after all. If they decide to move forward with the purchase, waiting a little will only build their excitement and appreciation for the item.
4. Open a savings account
It is important to have a safe and secure place for kids to store their money. Keeping money in a bank account incentivizes kids to keep their dollars in savings since the money is not at their immediate disposal. It can also give kids a sense of pride to deposit their money and see it grow in an official account.
Here at BankSouth, we offer a Kids Savings Account for people under the age of 18. The account features include:
You can open this account at one of our local bank branches today.
5. Practice what you preach
Finally, when looking to teach your children about money, it is important to take a step back and evaluate your own financial habits. Are you implementing all the practices you want to teach your kids? Children can be very perceptive and pick up on more than we often realize, so it is vital to model the good money habits we want our kids to follow.
While these tips are simple, they create a solid framework for teaching kids about money. Implementing these ideas in real life are vital to their success. Allowing kids to not just learn about making and saving money, but providing opportunities to put these lessons in action will teach them financial responsibility and allow them to practice good money habits.
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