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To teach kids about money, you have to start young. Having good financial skills is important to everyone — even the youngest members of your household.
Though these lessons can be hard to learn, it is much easier when you start learning about money early. Helping your kids to save for things they want can be a great way to help them learn healthy money habits + to teach kids about money management.
#1 New Toy
An easy place to start is with a toy that your child wants. This can be a great steppingstone, especially if it is a toy that is more than their allowance. Starting small like this can help set the stage for saving money without having to have your child wait so long that they start to get frustrated.
If your child expresses interest in a toy next time they are at the store, use it as an opportunity to teach them about saving + how sometimes if you are willing to wait, you can get something better. Have a conversation with them about how much money they have + about how long it will take them to make the rest of it.
#2 Video Games
Games can be a great next step if your child is into video games. Work with your child to figure out the cost of the game + how long it would take them to save up the money to buy it.
Give them a place to put their money while they are saving so that they can reduce their temptation. You could even offer them an incentive to save, like offering to match the amount they save.
This gives them a preview to the world of earning interest + gives them a chance to build a positive relationship with saving money.
Saving for a bike is another classic way to teach kids about money, saving it + other financial literacy. One good thing to do in the scenario is to also help your kid to do some research upfront. Help them to look at several different bikes so they can learn about finding a good deal + trying to balance quality with quantity.
It might be worthwhile to talk to them about good components + how long the bike will likely last. Then, they can make an informed decision about the bike they want + be able to start setting up a savings plan. Once they have enough money, go with them to make the purchase.
Saving for a pet can be a great way to teach kids about money, how to take care of finances + general responsibility. This might be a good savings goal to do together as a family.
Work together to research breeds + find a dog that would be a good fit for your family. Then, you can all save together so that your children can participate while also learning from your example.
#5 Family Trip
Another great family savings goal that can help you teach your kids about money is to have them help to save for a family trip. Work together to figure out where you want to go, how long you would like to stay + what you think a reasonable budget would be.
Then figure out how much each family member should save to help make the vacation a reality. It can also help to give them extra opportunities to earn money that can help them reach the overall goal.
Make sure to meet regularly to figure out your progress + provide positive feedback for the work they are doing so far.
#6 Sports Team or Class
If your child is passionate about a sport or taking art classes, it may be a good opportunity to help them learn about saving. Try setting it up so that you pay a certain percent of the total costs + your kid helps to make up the difference.
This can help them to learn to save money + the importance of investing in things that you love. Helping your kids to find + support their passions helps give them valuable lessons that they can take with them into adulthood.
#7 New Clothes
Clothing is a necessity but sometimes want your kids want to wear + what you’re willing to spend on a wardrobe don’t match. This can be another great opportunity to teach them about saving.
The more opportunities you have to help your kids understand the difference between wants + needs to develop strong money habits, the better it will be for them in the long run. Saving for wants while taking care of basic needs is an important part of financial literacy.
#8 An Activity
Another great savings opportunity can be helping your kid save for a fun activity they have been wanting to try. Whether it is a trip to the local zoo, a movie date with friends, or a pizza party, having your kids save for an activity can teach them about saving money.
Use this as an opportunity to show your kids how saving to do something fun with people they love is even more rewarding.
Learning about money is a challenge, but it is essential to your children’s ability to build a full life in the future. The more you teach your child now, the better prepared they will be for the challenges of adulthood, financial +otherwise.