Finance seems to be an area where everyday people are still largely uninformed. An important part of our lives, many of us are left to self-educate, often just scratching the service, never truly getting a handle on one of the most important aspects of our individual livelihood. The public education system, whose focus is mainly general education, has little in the way of classes for our youth, putting the responsibility back on parents and family. What options do we have then to start the education process earlier, providing a fun, easy-to-understand introduction to finances? Luckily, we’ve done the legwork for you, offering a few tips and suggestions, making the world of finance a little easier for the young to digest.
- Promote good habits of saving. Children should feel good about saving, knowing they are working towards a goal. That concept, however, can be a little too abstract for children so many financial planners suggest parents matching their child’s contribution. This can be a great way to appease the “instant gratification” that children crave, while still educating them on the importance of long-term saving practices.
- Teach in a way they understand. Today’s generation is born into a digital lifestyle that just plain makes sense to them. While many of us see online banking as a modern convenience, our kids can’t imagine doing it any other way. The banking world has responded to this by making a great selection of apps that appeal to our children’s digital sensibilities. Many of these apps work in tandem with prepaid cards, growing in complexity as your child ages. For more information, Forbes has assembled a great article that walks parents through the top 10 apps on the market. Link to Forbes.com article
- Keep an open line of communication. Unfortunately, conversations about money within households has primarily been a topic for adults. It’s rare that there is a channel for open thoughts and questions when it comes to families and their money. In order to change the way we think about money and finances in general we have to dispel the stigmatism surrounding it. Talking about money freely allows children the comfort of asking questions. This is how we grow!
- Transition from the piggy bank to a real account. Kids need a place to save that mimics their adult counterparts. As they get older, their methods of banking should grow with them. Many banks have programs that educate young bankers while simultaneously catering to their experience with an account that is age-appropriate. Prairie State Bank & Trust has its own, part of the Voyager program, called the Explorer’s program for our customers 17 and younger.
- Treat Allowances like Commissions. Allowances might be a little outdated. Instead of giving money, show your children the importance of EARNING money. While many kids might get ten bucks a week with the expectations of certain chores being done. Putting a value on individual choirs and rewarding them once each is done might be a better approach. Often this can even lead to children asking what things are worth and getting a greater appreciation for “value”.
These are just a few suggestions, but they might be a great start to your children’s financial journey!