4 Tips for Teaching Your Children Financial Literacy
No matter what shape the economy is in, one thing is certain: it is always important to be financially literate. It’s best to start teaching your children at an early age so that they’re equipped with good habits by the time that they’re adults. But what exactly is financial literacy, and how can you teach this to kids that already have a million other things to learn? We’ve assembled some quick tips that you can put into action today to set your favorite small family members on the path of financial responsibility!
Open up a Savings Account Early
Opening up a savings account for your children is a great way of preparing them to save themselves. It engages them in the process and teaches them that it can be exciting and fulfilling to watch their savings grow over time. It also teaches them the discipline of putting money away now that they can use later. It has been found that 69% of Americans have less than 1,000 in savings. Teaching your child how to save early on is a great way of making sure that they don’t fall into that. USMFCU offers great youth accounts with special offers for your loved ones! Click here to learn more about our youth accounts.
Start Giving an Allowance
Kids earn around $1,500 a year from allowances in the U.S on average. Make sure that money is put to good use by teaching your children the right way to spend and save their money. Allowances teach responsibility, autonomy, and work ethic when it’s given based on completing chores. Your child will love getting that allowance every week, and you will enjoy seeing them become more and more capable with their money.
Get a Budgeting app
Nowadays, there are apps for everything, and children are becoming more and more savvy with them. Use this to your advantage by downloading a budgeting app and having your child monitor their budgeting/saving from their devices. If you give them an allowance, you can even arrange weekly or monthly meetings where you go over their budget together and discuss any mistakes or success that they may have achieved. This is a great way to get your child to be more aware of their own spending and it prepares them for managing their accounts via online and mobile banking for the future!
Be the Example
We all know that our kids watch everything we do, whether we notice it or not. Children learn by example first and foremost. Make sure that you are setting the right example by improving your saving habits and discussing them with your children. It’s important to explain to your children why you are unable to buy them a new toy or game, why you’re saving money, and what your financial goal is. Those lessons will be invaluable to shaping their financial behavior in the future.
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