Teaching children the importance of saving early greatly influences their potential for successful financial management skills as adults. Even children as young as five years old can understand an allowance—making financial literacy lessons even more important.
The sad reality is children oftentimes don’t learn essential financial lessons in school. While 8 in 10 think it’s important, only half of teachers surveyed teach financial literacy –and at home, 74 percent of parents are reluctant to discuss money with their children.
Financial education is critical to the foundation of a successful life.
5 Tips for Raising MoneySmart Kids
With two-thirds of Americans living beyond their means, educating our youngest citizens on personal finance is critical. Teaching children the basics is a positive step toward a successful financial future.
Here are 5 tips for raising MoneySmart kids:
1) Start early. It’s never too soon.
2) Get involved. Take your children grocery shopping to learn the importance of spending wisely.
3) Budget. Let them buy whatever they want within a budget, they will be more aware of their spending.
4) Don’t bail them out. If they know you will give in, they will continue to overspend.
5) Model good habits. Show your children your savings account and the importance of spending wisely.
Whether it’s through an allowance or simple conversation, it’s important to introduce kids to the various ways to save, spend and grow their money.
A good milestone is to have a savings account established before a child's 10th birthday and depending on the child a checking account could join the mix as they turn 16. The accounts are just one step in the process—conversations and examples are vital to their long term financial foundation.
It’s never too early to start, and the learning never stops—invest in your children’s future today with Busey.