Healthy money habits are established at an early stage in life and it’s important for parents to help their kids develop these habits at an young age. Kids are clean slates, giving you the opportunity to teach them the type of healthy habits that will carry them through adulthood. Below are a few best practices to help you begin the process of teaching your kids how to save effectively.
Open a savings account. At most banks, savings accounts can be opened at no cost for minors. In addition, if the minor opens an account at the same place that the parent banks, the issuing establishment might provide a waiver on any fees. Opening a savings account can help teach kids the importance of saving money (and beginning to build interest) for a large purchase in the future.
Match contributions. The easiest way to help your children see and understand the value of saving is to match the amount they save. This will show them that you also value saving and are wiling to invest in their smart decision.
Give them an allowance. Most parents have ditched the concept of an allowance, but if you want your kids to learn healthy saving habits, you are going to have to give them money to save. In addition, giving your kids an allowance helps them understand the concept that money is not disposable and that they must budget properly to pay for the things they want without running out of money too quickly.
Get a piggy bank. The concept of a piggy bank extends far beyond the bright pink pig sitting on your kid’s nightstand that he or she dumps pennies into at the end of every week. Today’s piggy banks are much more sophisticated. Many have slots for spending, saving, and donating. This type of bank can help teach kids about budgeting and categorizing money for different expenditures.
Play games. Kids like to have fun. If you help them have fun, they will enjoy learning much more. It’s easy to help them learn about saving money by making it a game. For example, put together a challenge for them, or instead, play online games that teach them basic principles such as separating wants from needs and avoiding impulse buys.
Go to the bank. The bank might seem like a boring place to you, but for a kid, it can be an educational experience.Let your kids help you and tell them what you are doing and why.
Invest. It’s important to set up a mutual fund or savings account for your child in order to teach them to be a saver, but a stock investment can teach them even more. It’s best to choose a company they are familiar with. This type of investment can help kids learn how to research stocks and save more money.
Helping kids learn how to save is a process, but can be done with these few best practices. Before you can teach your kids about saving effectively and investing wisely, it’s important that you are also doing the same. This helps set you up for financial security in the future. Financial security is mostly determined by your credit score, which can determine much of your buying power and future financial decisions. However, if you’re experiencing trouble with your credit score, you could be a candidate for credit repair. At Ovation, we offer a wide range of credit repair solutions, customized to meet your unique needs.
Contact us today to see how we can help.