Most adults understand the importance of financial education and teach financial responsibility. It is also important to kids about finances, savings, and being responsible.
Here are five ways to teach kids about money and help them learn smart saving techniques early.
1. Wants and Needs
Teaching kids the difference between ‘wants’ and ‘needs’ can help them get a head start on understanding the importance of budgeting. Teach kids that ‘needs’ always come first and give examples like groceries, utility bills, or rent. As a secondary step, teach them about monthly budgets and how ‘needs’ should be paid before spending money on ‘wants.’
2. Create Goals
Once kids understand the difference between ‘wants’ and ‘needs’, help them create savings goals. This helps them learn that they are responsible for earning and saving money for items they want.
Start with one goal at a time. Have a conversation with them so they think about how important the item is and if it is worth spending money on.
3. Give an Allowance
Giving a kid their own money is a great and easy way to start teaching them the value of money and saving. Having to work for the allowance helps them understand that money is earned by hard work.
4. Open a Savings Account
As kids start to earn and save money, open a children’s savings account. As they get older, you can teach them how to deposit money and be more hands-on with their account.
Drake Bank offers Little Drake Savings, a savings account for children and young adults under 18 years old, to help get them started on building a better future. Learn more about Little Drake Savings here or call us to talk with a Banker.
5. Lead by Example
Teaching children about money can be an excellent time to refresh yourself on your finances so you can lead by example. There are lots of resources that can help you make smarter financial decisions and get a head start on teaching your kids.