In partnership with GreenPath Financial Wellness
Many of us at Spring Bank are parents or guardians, and we understand that how we handle finances sends a powerful message. Demonstrating healthy money management teaches kids best practices in personal finance. We love when you bring your kids into our branches!
Check out these six tips to teach and model positive money behaviors with your children and teenagers:
Share the Story of Money in Everyday Life
Everyday activities like shopping or family outings provide a chance to discuss using money wisely. Have them consider the cost of toys, groceries, trips to restaurants, or admission to special events. Emphasize that worth is not solely defined by money: there is value in free experiences. For example, helping a neighbor, visiting a playground, or spending time with a friend.
Point Out How Adults Earn Money
Discuss how you and other family members earn money. Guide younger individuals to understand that people have jobs or own businesses to earn income. Use their teachers, bus drivers, or family friends as an example. This is also a good opportunity to allow them to experience working themselves. Brainstorm how they can earn their own spending money by doing chores, dog walking, babysitting, or other tasks.
Build a Basic Budget
Working with kids to build a simple budget, allowing them to plan their spending, is time well spent. They can practice creating personal savings for a special item or upcoming event. Start simple with a written spending plan, including allowance, weekly saving amount, and spending record. Get them to develop a habit of monitoring their own youth savings account to ensure they are on track and not overspending. Create incentives for meeting specific goals to reinforce good practice.
Plan Out Purchases
Kids are notorious for having an “I see it, I want it” mentality. Work with them to build intentional buying habits by making a list before going to the store to reduce impulse decisions. Then when they ask if they can have something else, remind them that it’s not on the list. For older kids, introduce the idea of waiting to buy something they want. Delayed gratification is a complex concept even for most adults! For items on a “wish list,” talk about how much it costs and help them plan for the money required to purchase it.
Model Good Use of Credit
For example, let the kids know when you’re swiping your card at the gas station. Explain that you’re borrowing money to fill up the tank, and you’ll have to pay back the purchase. When the credit card bill for that purchase arrives, highlight the importance of honoring your agreements with the lender by making on-time payments and keeping balances low. For teenagers, introduce the topic of a credit score and credit report. Teenagers considering how low rates stll are) should be aware that a positive credit report will help them in the future if they decide to apply for personal loans.
Stress the Habit of Saving
Teach your children the importance of setting aside money from an early age. Use their earned income or a small portion of their birthday money to create savings for emergencies or a special future purchase. Emphasize the importance when including a savings amount in the budget. They may be reluctant due to delayed gratification, so be sure to communicate that having savings is not taking away from their hard-earned money.
The best thing you can do for your children’s future is to set a foundation for good financial health. We hope these tips equip them with financial literacy early on and help your kids develop healthy attitudes and behaviors with money. Help them open a personal savings account with us today!
