Kids and Money
In middle school, I remember taking a class that taught me how to write a check, pay bills, and balance a checkbook. Those few essential skills had an impact on how I managed my finances when I earned an allowance and eventually got a job.
Today, money management is a little different with online banking and various financial apps. Still, it remains important to teach children good financial habits early on in a real and relevant way. Establishing these basic skills early can chart a course for a better life as savers, consumers, and investors.
If you grew up balancing a checkbook, you might feel like a fish out of water when it comes to financial apps. Take the opportunity to research apps developed specifically for children and what they offer. While it seems foreign to you, your children will likely pick it up faster than riding a bike.
There’s nothing like hands-on experience. Opening a youth’s savings account is a great way to get your child in the habit of saving money. It’s also a great opportunity to teach them about compound interest and the value of their efforts.
Unless you’re wealthy, budgeting will always play a role in your finances. Create a basic budgeting worksheet to use as an activity together while paying bills. Or if your child receives an allowance, teach them to budget by using their allowance for the items they want.
Your kids may not encounter a situation where credit is important until they take out their first car loan or apply for their first credit card. During the time leading up to that moment, teach your children the importance of timely payments, the difference a good credit score can make, and how their financial decisions affect their credit worthiness in the future.
Knowledge is power. It's never too early to discuss the importance of good financial habits with your children to help give them the best start in life.