Raising Money-Smart Kids

As parents, we want the best for our kids. We want them to have opportunities that we never had and we want them to be happy. But most of all, we want them to grow into mature and responsible adults. This is why we spend so much time teaching them how to say “please” and “thank you,” or “yes,Sir;” we know that manners are important as adults. Likewise, we need to make sure we are teaching our children to be responsible with their money.

Do you ever run into moments as an adult where you sit back and think, “I wish someone taught me this when I was younger?” I know I do from time to time. Next month is national Teach Children to Save month and we would like to share a few tips that will help you prepare your children to be financially savvy adults.

Use Envelopes or Savings Jars

You may be familiar with the envelope system, which many of us use to save up and pay cash for items such as food, clothing, or other things we want to spend money on. We save a little cash from each paycheck into envelopes labeled for a specific item for which we are saving. Some envelopes are used more frequently, but others are set aside for longer term goals, such as a weekend getaway or a new computer. This is a great way to keep us from overspending or using money that should be set aside for bills.

With children, we can use this same concept to teach youngsters the value of a dollar and how they, too, can save their allowance or gift money for something they want that costs a lot of money. A good idea is to help you child decide what they want to save for, perhaps a new bike, and then place a photo of the bike on the side of a money jar. As your child begins to save their money, they can see the jar filling up and be more motivated to reach their goal.

Make a Goal Chart

Once your child knows what they want to save for, help them design a goal tracking chart. Determine how long it will take your child to reach their goal, whether they receive a weekly allowance or receive money for each chore they accomplish. Create a chart that shows them how long they need to save and let them fill in each square with a sticker as they make progress.Make sure they are also saving some of their money for long-term goals and for charity each week as well. It is very important to raise frugal savers and generous givers as well as wise spenders.

Let Your Child Make Mistakes

This is sometimes the hardest thing for a parent, but in the long run, it can be the best lesson for your child. When they get birthday or Christmas money and rush out to spend it, without thinking about it, they may run out of money before they have a chance to do what they really wanted. As a parent, be sure to stand firm and tell them, “No” when they ask for more money.This will prepare them for moments in their adult life when they have to make tough decisions and make sacrifices in order to meet their needs.

Most Importantly, Be a Good Example

Rachel Cruze, author of Smart Money, Smart Kids, says when it comes to teaching children about money, “More is caught than taught.” In other words, our children are watching everything we do. They are like little sponges soaking up the world around them as they develop into young adults.

One of the best things you can do for your child is to demonstrate proper money management in front of them. Show them that you save money for the future. Explain to them that you will one day retire and that you are already saving for that time, even though it may be many years down the road.

You can make paying bills and shopping for clothes and groceries into teachable moments by having them use a calculator to see how much money each item actually costs. You can even let them hand the cash to the cashier so they take ownership in the purchase.

While these teachable moments are geared toward our younger children, the same concepts apply when teaching teens as well. This month, take time to look for moments where you can offer a growth opportunity for your child that will last a lifetime.


Tammy Gage

Administrative Officer and Community Relations Coordinator