Like showing your child how to brush their teeth and make their bed, parents are their children’s first teachers when learning good habits. That includes healthy money habits.
Our kids are often close by when we spend money, especially when purchasing things for them. Take opportunities to explain how money works and how you make choices about what you spend your money on.
Learning about the importance of saving money is an essential part of your child’s overall financial literacy too.
If your child has outgrown their piggy bank, it might be time to start broadening your conversations with them about how to manage money and start saving.
Sit down and talk to your child about what money is theirs. Do they earn an allowance or have money gifted to them on their birthday or holidays? Do they have any opportunities to earn money? If they don’t, discuss how they can make some cash. Maybe it’s earning an allowance for doing chores at home or, if they’re older, helping family members or neighbours with tasks like weeding flowerbeds or babysitting.
Ask your child what they want to spend their money on. These are usually fun conversations! You can help them figure out the questions they’ll want to ask themselves to help them choose and prioritize what they want to do.
Making money and spending money is only part of the equation. Teaching your child the importance of saving money is an essential money habit that will contribute to their financial health in the future.
Discuss with your child how saving money will help them now and when they’re older. Right now, it might be about saving for a new gaming console or skateboard. In the future, your kid will need to rely on their saving habit to achieve bigger goals and be prepared for the unexpected.
Show your child how to calculate and track savings amounts. For example, if Aunt Nessa gives them $50 for their birthday, how much money should they set aside and save?
Next up is talking with your child about setting short and long-term savings goals. Setting goals helps your child decide and focus on what they want to do with their money. It gives them something to look forward to and provides a reason to avoid the temptation of instant gratification. Provide examples of how they benefited from one of your family’s savings goals, like going on a family vacation or buying a new TV.
Help your child to develop a plan to reach one of their savings goals. To provide an incentive to save, you could offer to contribute or match their savings to reward their efforts.
If your child doesn’t already have a savings account, it’s time for them to open one. Take a look at the range of youth saving accounts Sunshine Coast Credit Union offers to see which would be the best fit. For a limited time, open a Humanomics Youth Savings Account and help them earn up to $125 for free.
Decide with your child if they’re mature enough to have their own debit card or if you’ll manage their banking transactions for them to start. Come up with a schedule and plan to track and review their money and savings goals together. Make time to log on to online banking to review transactions and their account balance and help them go into a branch or visit an SCCU ATM when they need to. And remember, it’s never too early to talk to your kids about keeping passwords and financial information safe and secure.
These articles are made available to you as tools for independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy. All examples are hypothetical and are for illustrative purposes only. Please visit your branch to seek personalized advice from qualified professionals for all personal finance issues.