April is financial literacy month, meaning that it is great time to start teaching your children smart money moves. If you teach children smart money habits at a young age, they will be more prepared and understand how to save and handle their money as they grow up. Check out these 5 tips that you can start teaching your children today!
- Start a savings account early
The first step in saving money for your child and for them to learn how to start saving money, is to open them a saving account. This gives children a safe place to keep any birthday/holiday money and introduces them to the idea of growing their savings over time. As your child gets older, you can also start introducing how they can invest their money. Over time a small amount, can go a long way when invested! Consider opening your children an account at Dominion Energy Credit Union – you can help them get started with automatic deposits to their accounts.
- Create opportunities to earn money
Giving children the opportunity to have firsthand experience with money, will over time, help them navigate how to save and spend their money wisely. An allowance for doing chores or good behavior is a great option to help accomplish this. Children will also understand the importance of earning money and the value of it when it is something they have worked for.
- Encourage smart spending decisions
You can do this by teaching children the difference between a want and a need. You can do this by using examples, such as emphasizing the importance of needing school supplies each school year rather than the new toy that just came out.
- Create budgets
Teaching children about budgeting early on can help them carry those skills into adulthood and be smarter with their money. Budgeting can also help decipher what is a necessary or unnecessary purchase and prevent impulse buying. A great way to help convey the importance of budgeting is by giving your child three jars for spending, savings, and giving. You can help them decipher how much they want to spend, say on a new toy or ice cream. Then see how much they have left to save and decide if it would be a worthy purchase. You can then encourage the importance of giving by setting aside money to donate or gift to something they care for.
- Be a good financial role model
While everything you actively teach your child is important, it is also important to use those methods yourself. Your actions and discussions about finances can be a great learning lesson for children as well.
These tips can help your child take steps in the right direction to becoming smart and educated with their finances. We also have many It’s a Money Thing educational videos that are very helpful and fun for teaching the basics as well.