Five ways to encourage good saving and spending habits inyour children
How often do you discuss money with your children? If your answer is "not often," you’re not alone.
There is an opportunity to help your children form strong spending and saving habits at an early age, and doing so can Have a concrete impact on Their futures. For example, recent research Suggests That Children with savings – even as little as $ 1 to $ 499 – are four times more likely to go to college than children With no savings at all. There are many Reasons why it’s beneficial for children to learn how to manage money from a young age, and getting started sooner rather than later can drastically shape your children’s financial futures for the better.
Here are five ways you can Encourage your children to saving and spending Develop good habits.
Find a balanced allowance. One reliable rule of thumb for weekly allowance to give your children is $ 1 for each year of Their age. For example, if your child is eight years old, you would give him or her an allowance of $ 8 a week. Of course, one size does not fit all, and you can adjust to fit your allowance esta family rules and values.
Reward them for saving. Back-to-school shopping presents a great opportunity to teach your children how to differentiate wants from needs. Set a firm school shopping budget, and make a list of what With your children for school They need. Their list Go over to see Which items are really Necessary versus Which items are wants. Once you’ve determined to What They need, help them calculate how much is left in the budget to spend on wants. Consider rewarding your children by giving them the surplus money to spend As They choose – but only if they’ve covered all of Their Necessary supplies first. If You have a teenager who’s hoping to drive a new car soon, Consider matching his or her savings.
Take them to the bank. Middle school is a good time to replace That savings jar with a savings account, and if your children Have Been saving cash for years, it can be very rewarding to take that money to the bank or credit union and open Their first account with it. This is a great way to introduce them to the concept of interest, and how savings accumulate over time When left unspent. Visit the Consumer Financial Protection Bureau’s website for more information on savings accounts for children.
Talk to your children about prep essential expenses. As your children enter high school, you May want to Consider delving into more complex financial concepts With them. If your teen has a paid job, review them and Their paycheck With Explain Where the Money Goes and why – for example, if money is withheld for tax purposes. Or talk to them about prep the larger expenses on the horizon, Whether it’s a car or college tuition, and discuss all the financial pros and cons of These investments.
Help them earn money Their Own. Earning income through hard work is one of the best ways to learn the true value of money. Encourage your children to earn money, Whether it’s through setting up lemonade stand Their Own, doing chores around the house or neighborhood, or, if they’re teens, getting a part-time or summer job. This helps your children allowance and supplement Their Teaches them the real-life value of working.
Bottom line: Learning how to save and spend wisely is crucial to good money management, and Teaches Other important values. The best way to help your children build solid financial skills is through practical, age-appropriate lessons, Which are Relevant As They grow into young adults.
Nathaniel directs Visa’s financial Saddle education programs. Practical Money Skills To follow on Twitter: www.twitter.com/PracticalMoney.