Make A Difference in a Child Month: Talking with Your Kids
Published on July 19, 2024
•3 min read
As kids gain more independence, access to money starts to become a priority.
Whether your family has gone with earning cash for chores or have waited until they’re of age for a paper route, it’s important that once kids start making money, they understand how their money works.
Savings vs. Spending
We’ve all been that excited kid ready to use our chore or birthday money for candy, toys, video games or whatever else we can get with our newfound wealth—so we know how hard it is to tell a child that they should save some of that cash.
As an example, if you give your child a $10 allowance a week, a great way to start explaining savings could go like this:
“Would you rather spend that $10 today, or spend $5 and save $5 a week so you have $20 by the end of the month?”
Kids can start seeing the savings build when you give them a visual—the old fashion route is a piggy bank, which is still a great learning tool, but these days we have other options.
By opening a savings account and depositing that money in for them, you can log into your online banking platform and show them their account growing as a way to motivate them to keep going!
Setting Personal and Family Goals
The best way to start the savings conversation is to talk about goals. Beyond the candy bar or games, what else might your kid be dreaming of getting that’s out of budget?
Begin by explaining that instead of three candy bars, get one or two and save the change so that you can buy yourself that one big thing you really want. It’s ok to want something, but getting more of it just because you can puts you further away from your goal.
This can also be done as a family. Creating family goals help children to understand why their parents are making certain decisions or sacrifices. It can also give them a sense of accomplishment when they help their family reach that goal.
Show How Budgeting Works
As the concept of building savings and creating goals become more and more familiar, and hopefully a habit, the topic of budgeting may be a natural next step.
It’s always great for a child to understand the concept in action in their own family. A perfect opportunity to go over budgeting is when grocery shopping or back-to-school shopping.
When shopping, take products that have a brand name and a generic version and explain the difference in the product (or lack thereof). Then, highlight the cost savings in the generic over the brand name.
Explain how if you can generate a savings in everything you buy, then you can use that savings toward your family goals.
Need some more guidance before you start the conversation? We have some easy reading options that can help simplify the money talk with your kids:
- “A Grain of Rice” by Helena Clare Pittman tells the story of a wise man who finds a clever way of building wealth from a one grain of rice. This is an easy read and great for children ages 9-12.
- “Money Rules: The Simple Path to Lifelong Security” by Jean Chatzky is more for the parents but can highlight some great points that you’re trying to get across to your children. Older teens preparing for life on their own may also find this to be a helpful read.
And when it comes to financial education and tips, the Metro Blog is always up to date on the latest trends and news our community—finding different ways to help you no matter the financial journey you’re on!
