As a parent, you care about the success of your child. And establishing positive money habits early in life can drastically shape their financial well-being.
Here are some tips to help teach your child about money and start them on the path to financial success.
- Talk with your child about money One of the easiest ways to help your child is to get them comfortable talking about money.Include them in discussions about how you spend the family’s income. Give them an opportunity to ask questions and help prioritize the use of any discretionary income. Exposing your child to complex financial situations will help them to make better decisions later in life.
- Use their allowance as a teaching tool The best way to understand the value of a dollar is to earn it. Give your child the opportunity to earn money through chores or other age appropriate jobs. Help them establish savings goals and budgets for how they will spend their income. Exposure to real-life financial situations will provide a basis for future financial success.
- Teach them the importance of saving Now that your child is making a regular allowance, you need to help reinforce the importance of saving. Work with them to identify a desired item and outline a plan to save for its purchase. An ideal goal would be something that they can accomplish within a few months so that they learn the lesson without becoming discouraged. Resist the urge to match dollars and let the success be a result of their own work. There’s nothing more rewarding than establishing a goal and working hard to achieve it.
- Establish a custodial savings account As your child starts to accumulate savings, you will want to move them beyond their piggy bank. Visit your local Valley National Bank and ask to open a Kids First Savings Club account. While you are opening the account, have the banker explain interest and any other benefits that come with account ownership. Depositing a small amount on a regular basis will help establish a lifelong habit.
- Get them excited about money management Once you’ve established some basic financial habits, you should think about how to keep them top of mind. Review monthly statements together, talk about your child’s financial goals, and celebrate their future savings milestones. Making money management fun will pay dividends for the rest of their life.