We all want our kids to grow up to be financially savvy, but in today's culture it's become increasingly difficult. Many schools no longer include financial literacy in their curriculum and parents can find it difficult to start the conversation. But, getting started is really quite simple. You can teach your kids a few important concepts by participating yourselves.
The concept of "money doesn't grow on trees" goes a long way here. It's important that kids understand money is earned. Teach your kids that when you receive money, either through a job or an allowance, to set aside a small amount for savings each time. Over time, they'll start to see how their savings can grow.
Just because you have money, doesn't mean you should spend it all. Teach the importance of budgeting and responsible spending. Showing your children how to make a dollar stretch can really pay off. Teach the concept of needs versus wants and knowing the difference.
Giving back is just as important as saving for yourself. This concept may take some getting used to but it's important to see the ways in which they're making a difference. It will make them feel good about what they're doing and teach the importance of responsible spending.
Experts say that you can start teaching the idea of investing around age 10. The important part here is that they understand what it means to invest in something long-term. Tucking your money away for longer periods of time can pay off big in the long run. Show them how interest accrues on products such as a term share certificate. Over time, your initial investment will grow, essentially providing you free money. Who doesn't love that?
It's essential to understand the concept of budgeting. It not only shows how to be responsible but it teaches kids not to over spend. Knowing that money isn't about instant gratification but rather about long-term successes is key. Spending money wisely takes patience, but it can really pay off in the end.
SafeAmerica Credit Union can serve as an important ally for parents in their mission to teach their kids to be financially responsible. We offer youth savings accounts, share certificates and checking accounts designed just for kids and young adults.