If you still have not determined your New Year’s resolution, consider making a promise to teach your kids good financial habits this year. By teaching children in elementary school lessons about budgeting, saving, investing and goal-setting, they will be more likely to grow up to become financially responsible adults. Here are some tips for teaching kids about money:
- Envelope System: Give kids their allowances in denominations that encourage saving. If the amount is $5, give them five one-dollar bills and set up three separate envelopes for spending, savings and charity. Encourage that at least one dollar be set aside in the savings envelope.
- Jars for Short- and Long-Term Goals: A great way to teach your kids the concept of saving for short- and long-term goals is by taking two jars and having your child draw a picture of a short-term goal, maybe tickets to the movies, and a long-term goal, maybe a new iPod, and have them save their allowance and money they receive as gifts in the jars.
- Savings Match: A “savings match” can be a great way to encourage your children to save extra money. Determine a set amount and tell your kids that you’ll match any money beyond the determined amount – sort of like your family’s very own 401(k)!
- Shop Together: Turn regular shopping trips, for example, trips to the grocery store, into lessons about budgeting. Talk to your children about how much money you have budgeted to spend and ways to stick to the budget. It’s a great opportunity to show them how to compare prices of items and how coupons work.
- Goal Chart: PFCU, through BALANCE, provides a goal chart that is perfect for kids. Seeing how close they are to their goals can make saving money more exciting for children. Place the chart in a visible location, like the refrigerator.
- Open a Savings Account: Take your children to a credit union to open their own savings accounts. Explain to them that starting to save money at a young age is important and it’s a safe place to put their money and a place where their money can grow over time!