Spending Habits in Children
Five Ways to Encourage Good Saving and Spending Habits in Children
The best way to help children build solid financial skills is to start the conversation early and provide practical, age-appropriate lessons. Here are five ways you can encourage your children to develop good saving and spending habits:
- Find a balanced allowance. One reliable rule of thumb for weekly allowance is to give your children $1 for each year of their age. Of course, one size does not fit all, and you can adjust this to fit your family.
- Reward good saving habits. Help children realize the importance of saving by rewarding them for good behavior. For example, if your child doesn’t spend any money for a certain amount of time, provide a small incentive that will continue to motivate your child. A savings match can also be a great reward to encourage your child to save extra money.
- Take them to the credit union or bank. It’s never too early to replace the savings jar with a savings account. This is a great way to introduce the concept of interest, and how savings accumulate over time when left unspent. Online banking makes it easy to show them this anytime.
- Talk to your children about essential expenses. As your children get older, delve into more complex financial concepts with them. If your teen has a paid job, review their paycheck (and yours!) with them and explain where the money goes and why.
- Help them earn money. Earning income through hard work is one of the best ways to learn the true value of money. Encourage your children to earn their own money, whether it’s through setting up their own lemonade stand, doing chores around the house or neighborhood, or getting a part-time job.