Smart financial habits can start when children are young because it’s never too early to learn the value of money.
Engage your children by making savings a fun activity through a personal allowance and savings account. The Police Credit Union offers the Looney Tunes Kids Program, an age-appropriate savings account for younger children while incorporating games, puzzles and more to encourage saving.
If you give your children an allowance, set restrictions on how they can spend the money and require them to save a percentage of it. For example, if they receive $10 a week by completing household chores, you could allow them to spend half and require them to save the other $5. Children will appreciate the dollar’s value when they learn how much things cost and how quickly money can be spent.
You can help your children establish attainable goals and develop a spending and savings plan to reach those goals.
Financial Education for Teenagers
Teaching your teen about money management can be daunting. Many teens earn their own money through part-time jobs and there’s never a shortage of ways to spend it. Consider establishing a checking and savings account for your teen through the OnScene Teen Program and show him or her how to record transactions and read statements. Teaching teens financial responsibility, and the feeling of ownership over their money, will benefit them later in life.
Understanding how to respect and use credit also is a vital component of teens’ financial education. The concept of interest, the time needed to pay off a balance, and the negative effects of bad credit will help teens understand that smart spending habits are essential when using credit cards.
Practice What You Preach
One of the best ways to promote sensible spending habits is to exhibit them. Get children involved in your daily personal finance decisions on an appropriate level. Show them the basics of paying bills, how to make a list for efficient grocery shopping or how to plan for a big-ticket item and how to avoid shopping on impulse. The way you spend money can have a significant impact on how your children will spend.