Do your kids understand budgeting? It can be difficult to teach children how to budget, especially because so many adults struggle with it themselves. However, the younger they learn the value of budgeting and saving, the better. We believe that all children should have a strong knowledge about money. So we decided to put together our top three tips for parents and guardians who want to begin teaching children about saving and budgeting. Do you use any of these strategies with your kids? What works best for you?
Teach them to work for their money
Many parents give their children allowances for doing household chores and having other responsibilities. Kids should learn at an early age that money stems directly from work. They will be more careful with their buying decisions if they understand what goes in to earning money.
Discuss wants vs. needs
For kids to learn to save money, they need to understand what a necessity is. Before a purchase, have a conversation with them. Make sure they ask themselves: “What will I use this for?” “Do I have anything else that does that?” and “What will happen if I don’t buy this?” For those situations where the purchase is clearly a “want” suggest that they use their money to pay for it. Kids will often decide quickly that they don’t “need” it, or that it’s not that important to them when it’s their money they are spending.
Set goals and celebrate successes
Is your child drooling over the newest game console? Set goals with them. Consider opening a Callaway Kids Bank account for them (you only need five dollars!) and match what they put away toward their goal item. Or set a deadline goal to hit specific amounts. If they achieve their goals, reward them. A small celebration goes a long way with reinforcing habits, especially in children.
At The Callaway Bank, we place enormous importance in helping kids understand budgeting and money. That’s why, in 1993, we designed a program to teach children how to save at an early age. If you’re interested in learning more about The Callaway Kids Bank, check out our website, or visit with one of our personal bankers.