April is financial literacy month! It is a great time to teach children and young adults how to handle their finances, learn the importance of savings, and how to be responsible with money. Here are some easy tips on how to get started.
Teach the difference between a want and a need
One way to do this is by setting examples for your children. When at the store, discuss what you need and what you can pass up. Like buying toothpaste instead of the cute top you saw when walking in. Another idea is to create a list of your family’s wants and needs. You can then discuss why each item is in the separate categories. You could even look back at this list when you want to treat yourself or surprise a family member with a fun gift. Remember, it is good to have balance.
Teaching children about credit early on is crucial because it is something that will be very important to them as they grow up. This can help them have a better understanding of how credit works when it comes time for them to apply for a credit card or make a big purchase.
Benefits of a savings account
Opening a savings account can help a child save and make their money grow over time. Whether it is allowance, birthday money, or a child’s first job, having a savings account can help them automatically put money away and help prevent the desire to spend it. It is a great idea to open a basic savings for your child and encourage them to save a portion of gifts or allowance.
Avoid impulse buying
It is important to take the time to consider if a purchase is really worth spending money over. If you avoid impulsively buying an item, you may realize it is something that is not as important to you than you thought when you first started to consider buying it. Teach the value of saving money for something more special later, rather than an impulse purchase that may be regretted.
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.
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.