Teaching Your Children the Value of Money
Encouraging Smart Moves for a Successful Future
Teaching your children the value of money is something you can start to do at an early age. You want to encourage your child to not just understand what money is and how it's used, but also to make good choices as they grow.
Why start so early?
Your child will likely become exposed to a "consumer's environment" much earlier than you plan. Most young children at some point or another may want to only eat certain foods or wear certain colors. As they get older, they will see ads on TV and social media. They may notice their friends will have things they don't have. The steps you take between wanting something and having something are important. In fact, they are the basics of finance, and teaching your child early will help them with almost every decision they ever make.
What is Money?
Helping your child understand that some things cost more and some things cost less is an important first lesson. They will learn that money is earned and start to understand value. A great place to teach your child about money is the grocery store. They will see a variety of items each with their own price. Have them read the prices and learn why some items cost more and some cost less. This can be a good example for when they start to notice other items they may want in the future, like toys, games, clothes, and more.
Setting Savings Goals
There is a high likelihood that at any given time your child is aware of something they want but don't have, like a new toy or clothes or accessory. This is a good thing. Encouraging them to want something (reasonable) can make it a goal for them, and you can help them save for it. Help them understand what it takes to earn the thing they want. If giving an allowance is part of your household, this can be a good time to show them the value of their dollars.
Making Good Choices
It is important to teach your child about priorities. Sometimes they will be able to afford more, and sometimes they will be able to afford less. Also, being able to buy something doesn't always mean you should. Our wants and our needs will change, so it will help them to know that short terms savings and long term savings could mean different things. Giving them the freedom to make choices with their money teaches them that they are responsible for the outcome. For example: encourage them to purchase something they've saved for, but teach them to also consider what else they could get if they keep saving.
Opening a savings account early can help your child get off to a great start in their finances. A Youth Account from BMI Federal Credit Union is the perfect choice for their first savings account. This will encourage good habits for future money management, and keep their money safe. Open this account inside a branch with just $5.00. A Youth Certificate is also a great way to save. It starts with just $50, and earns a higher dividend than a regular savings account. This can be a great choice for your child's "long term" savings account. Money can be added at any time, so it's perfect for birthdays or special occasions.
Right now, earn a $5.00 cash bonus* when you open a Youth Savings Account!
Let Your Child Make Mistakes
Once again, we want to encourage smart choices. Your child’s learning process may include impulse purchases or running out of allowance now and then. There may be a time they don’t earn their allowance if they haven’t completed their chores or if they're behaving poorly. It is important that they feel the impact of these small choices to avoid bigger money mistakes in the future.
Leading by Example
Your child is watching you: your behavior, your energy, and your actions. Ensure that you never speak negatively about money in front of them. Never blame them for money troubles, and always answer questions they may have. It is important they are comfortable with and excited about saving money and making good choices. The more empowered and confident they feel, the better choices they will make in the future. Get started now and they'll be an expert in no time!
For a little extra help, check out our award winning Financial Education Program, complete with interactive games and activities for all ages within our Online Learning Center . For teens and adults we also offer free Community Workshops (currently available as virtual webinars), and free Certified Financial Coaching for one-on-one help.
*Enter or mention promo code GET5 at account opening for members 0-17. Cash bonus of $5 will be deposited into the savings account within 10 business days after all qualifications have been met. Cash bonus may be considered income and reported on 1099-MISC or 1099-INT. Membership eligibility and account requirements apply. BMI FCU is open to everyone who lives, works, worships or attends school in Franklin, Licking, Fairfield, Pickaway, Madison, Union, Delaware or Morrow County. This credit union is federally insured by the National Credit Union Administration. Additional coverage up to $250,000 provided by Excess Share Insurance Corporation, a licensed insurance company. BMI FCU may amend, suspend, or discontinue this offer at any time without notice. Offer ends June 30, 2021.