It’s never too early to start talking with your kiddos about money. We asked Primeway Federal Credit Union's chief marketing officer, Michelle Oshinski, for advice on how to teach children money management.
Why is it important to teach kids about money?
Money doesn’t make us happy, but it does provide opportunity. A part of teaching children about money is helping them understand the importance of how education or advanced-trade training provides the ability to earn money. That is why PrimeWay offers a good grades program and scholarship opportunities for youth.
How can we teach kids to budget? Help your child prioritize what’s important. Always encourage 10% or more of any budget go toward long-term savings. Even if the deposit is only a dime, it is the consistency that’s important. One of the most difficult parts of teaching budgeting and saving is helping children deal with the need for immediate gratification. Creating an active visual display can help keep kids motivated.
Can you offer any personal examples?
When my son was four years old, he wanted a very expensive Star Wars Lego set. The orthodontist and I wanted my son to stop sucking his thumb. We agreed that if he could stop sucking his thumb for 30 days, he would earn the set. We divided the cost of the set into portions and had a daily dollar-tracking chart. To reinforce how close he was, we took a picture of the set and cut it into 30 pieces. Each day he made progress, he added a piece to complete the picture next the dollar chart.
Ways to teach kids about money
+ Make it fun – celebrate new deposits or milestones. Everything from fist bumps to picking what to have for dinner with words of accolades can make a positive difference.
+ Pay for chores and make those payments by transferring the money to a savings account.
+ Help your child make smart buying decisions. Every time they save money through a smart decision, take the money saved and add it to a savings account. Help them to see the effects over time.
