By Team Tomorrow
Published September 13, 2021
Saving for college can be a struggle, but the lessons you can teach your kids along the way can be very rewarding. Here are 7 saving money tips you should teach your children:
If you don’t have a college savings account yet, do that ASAP. Showing your kids your investment account will help them understand how interest works. Some schools will teach this, but providing them with a real world example can make it stick.
We usually don’t like to discuss family finances with kids. If it makes you uncomfortable, ask them what school they’d like to go to, or talk about where you attend. Show them an investment calculator and how saving just a few dollars a day or $100 a month can lead to huge returns.
Money.com strongly suggests kids learn about credit at an early age. Credit cards can come with a ton of perks, but if you’re not careful, you can end up in serious debt.
To be a responsible credit card holder, instill these rules on your child:
Also, share your personal experiences with credit cards. Let them learn from your mistakes.
Create a budget with your kids, show them yours, or check out our budget breakdown. Separate all the items into two categories: wants and needs. By helping your child understand the difference between wants and needs, it will give them a better comprehension of fiscal responsibility. It may even cause them to think twice about their next impulse buy.
We all purchased things we regret: a Peloton that’s now a $3,000 clothing rack, the drone you used once, or cruise stocks right before the pandemic.
The best way for your kids to learn is by letting them make their own mistakes. It’s better than they learn while they’re young, and the stakes are low. Making a poor decision that costs them $100 can hurt, but they’ll remember it when making much larger financial decisions in the future.
A common theme in this post is learning by doing. The best way to instill saving money tips on your children is by having them save money themselves.
According to a 2019 survey conducted by the American Institute of Certified Public Accountants (AICPA), two-thirds of parents pay their children an allowance. Let them do household chores to earn cash for that new toy. They will appreciate it more when they can finally afford it, and better understand the value of a dollar.
Does your child want something, but it will take them forever to save for it themselves? Offer to match their savings if they can reach a certain threshold. Everyone loves free money!
Incentives motivate us to work harder to achieve our goals. As an additional bonus, you can also offer smaller rewards when they achieve milestones on the way to their main goal.
Many people get awkward when talking about money. You shouldn’t be, especially when you’re teaching your children about finances. You don’t have to give them all the details about your financial situation, but you should have a regular conversation about budgets or share about your savings goals.
If you’re going to Disney World next March, show them how much it will cost compared to how much you’ve saved up thus far. Keep them in the loop, and they’ll be better prepared when making their own financial decisions.
By following these saving money tips, you can give your child an excellent understanding of how finances work. Learn by visiting Tomorrow and secure your family’s future.
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