The new school year brings a valuable opportunity for growth, both inside and outside of the classroom. Parents often wonder what they can do at home to help support their child’s education. Aside from academics, it is never too early to start teaching children about important life skills, including financial literacy. In this month’s blog, we have compiled several tips to help facilitate effective family discussions about money that are appropriate for all age groups
- Start with the Basics
- Introduce Coins and Bills:
Show your child different types of coins and bills, helping them recognize their names and values.
- Play Store:
Use pretend money to play “store” at home, allowing them to “shop” for items and understand the correlation of money to pay for necessities. For older kids, games like Monopoly or Life also provide life-like money scenarios.
- Explain Key Financial Concepts
- Earn, Save, Spend, and Give:
Introduce a simple model where money is divided into categories: earning (money received), saving (for future goals), spending (on needs/wants), and giving (to charity or gifts).
- Use the Jar or Envelope Method:
Using physical jars or envelopes labeled “Save,” “Spend,” and “Give” for children to place their money in, so they have something tangible to see the different parts of a budget.
- Integrate Money into Everyday Life
- Involve Them in Errands:
Take your child grocery shopping and talk about choices you make, comparing prices, finding sales, and sticking to a food budget.
- Explain Your Decisions:
When at the store, explain why you are making certain choices and how you pay for purchases using cash, debit, or credit cards.
- Encourage Saving and Goal Setting
- Set Savings Goals:
Help your child choose a specific toy, game, or experience they want to save for.
- Celebrate Success:
When they reach their savings goal, celebrate their hard work to reinforce the satisfaction of achieving it.
- Provide Opportunities for Practice
- Offer Your Child an Allowance for Chores
Provide your child with an allowance and guide them in applying the “Save, Spend, Give,” model to manage their own money. Additionally, emphasize the principle that money must be earned before it can be spent.
- Explain Delayed Gratification vs Impulse Purchases
Explain that saving money takes time and patience, but it helps them get bigger or better things in the future.
- Make it a Lifelong Conversation
- Start Young:
Begin introducing money concepts as early as age 3, as children form financial habits by age 7.
- Explain the “Why”:
Discuss how saving now prepares you for unexpected expenses, like car repairs, or future fun experiences, like a family vacation. Give examples from your family life so they can see these tips put into action.
Wayne Westland Federal Credit Union offers Youth Savings accounts with incentives to get started. With our Youth Account redemption voucher, WWFCU covers their initial $5 deposit, and makes another $15.00 deposit after 30 days of positive account history. WWFCU is committed to empowering future generations to develop strong saving habits and make informed financial decisions that pave the way for long-term success. From opening a first savings account to purchasing a first car and beyond, we’re here to support every step of your financial journey. Your financial well-being is our lifelong commitment.
