Bring out the piggy banks. Have children divide their money into three banks or jars for spending, saving and giving. This helps them understand spending is not the only use for money.
Give your child opportunities to earn. Consider paying your child an age-appropriate allowance. You may decide to tie it to chores, or simply provide a small stipend without conditions.
Open a savings account. Many banks and credit unions offer savings accounts for kids, with low-balance minimums and maintenance fees, goal-setting tools, and even rewards for reaching goals.
Help them identify personal saving goals. Are they eyeing a new toy or video game? Hoping to see a movie or ball game? Help children determine how much their “want” costs and make a plan for saving up.
Make family events money management exercises. Planning a vacation? Give middle- or high-schoolers responsibility for planning and saving for one aspect of the vacation, such as a family meal or an evening’s entertainment.
Introduce investing. For older children, explain that money they save can be used to “own a piece” of a good business, either by buying the company’s stock or by finding a mutual fund that holds this kind of stock. Talk about businesses your child knows, such as Disney, Apple or Starbucks.
Model daily spending and saving decisions. By discussing money-making decisions with your child as you shop, cook and pay bills, you provide concrete examples to model. When deciding whether to prepare dinner at home or go out, talk about the savings created by staying home and how those savings could be used.
Use your grocery store as a classroom. Show your child how to comparison shop, checking unit prices of similar items and deciding which is better. Consider sharing a portion of the “savings” with them, to dedicate to something of their choice.
Involve children in household money management. Enlist their help in opening bills, identifying what they’re for, and circling amounts payable and due dates. This gives them an appreciation of routine living expenses and the need to save to pay for services like electricity and water.
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Give young children firsthand money management experience. Doing so will make it more likely that they develop the framework necessary to manage personal finances as adults.