5 Ways to Increase Your Child’s Financial Literacy
You might think your children are too young to understand the concept of money, or perhaps you’re afraid it might stress them out. However, the truth is that from the moment your child graduates from college through their retirement, every decision they make from getting a student loan to buying a house rests upon their financial literacy.
If you haven’t had “the talk” with your child about finances, here are some suggestions on how to start:
Explain that Money Doesn’t Grow on Trees
When your child sees you use your debit card, they don’t realize it is tied to a bank account and that you only have a certain amount of money to spend. Use one of your shopping trips to explain that you go to work so that you can earn that money, and that you keep the money in the bank so that it remains safe.
Help Your Child Manage Their Money
One of the easiest way to teach a child how to manage their money is to give them some. Your child will discover rather quickly that if they blow their allowance on a toy they want, they won’t have enough left for anything else. You may find yourself tempted to help them out, but the fact they have overspent is, in this case, a good thing. This allows them to learn firsthand that their actions have consequences, and that they need to plan carefully to make their money go as far as they’d like.
Show Your Child How to Track Their Money
Show your child where their money is going. This is a huge step toward teaching them how to manage it. Use a notebook or create a file on the computer that allows them to keep track of what they spend. Designate a place for them to put their store receipts so they have a record of what they spent and where they spent it.
Create a Money Goal
Even adults have trouble saving just for saving’s sake. Help your child create a goal to purchase something they want and provide a way to track their progress. When they see how their money accumulates, it can inspire them to continue saving even after they reach their goal.
Open a Real Savings Account
Provide your child with their own savings account at your local community bank. This is not only a great way to show them how to save money, but it also teaches them that when money is set aside, the amount can actually grow. Parents typically have to co-sign on a standard savings account, and you will usually need to keep a minimum amount in the account to avoid maintenance fees.
Citizen National Bank can help your child save for the future. To find out more, call them today (865) 429-7521.