4 Important Lessons to Teach Kids About Money | St. Johns Bank
Studies show that 64% of American adults report money being a significant stressor in their lives. What’s even more alarming is that 34% of adults described their financial situation as “just getting by.”
These statistics show how important financial literacy is and the significance of teaching the next generation better ways to manage their finances.
At the age of 5, children begin understanding concepts about money. The earlier these lessons are taught, the better-equipped children will be with their money as they grow into adulthood.
Here are a few tips for providing your children with financial knowledge that will encourage them to manage their money well for years to come.
The Concept of Earning Money
After you’ve worked on identifying money with your little ones, it is time to teach the concept of earning it. A good way to do this is to implement age-appropriate chores within your home.
Set a financial amount that your children will receive weekly. When it’s time to give them their allowance, count it out with them and have a place for the money to be stored.
Why Saving Is Important
Saving is a financial concept that should be learned as early as possible. Teenagers who earn their own money can learn how to save.
Putting money away for an emergency or towards a savings goal is a challenge, but it’s important to do.
How to Budget
Where is your money going? Even at a young age, children can learn the concept of budgeting.
When it’s time to purchase something with their hard-earned money, kids can be encouraged to put it towards things that matter. Younger children are more likely to purchase toys, while teenagers may need to delegate funds toward car payments, insurance or extracurriculars.
How to Use Credit Cards Wisely
Credit cards can be used to your advantage, or they can be abused and hinder your credit score. It is important to teach kids about credit cards, interest rates and paying bills on time. Encourage the healthy use of credit to build credit history, but discourage using them when there isn’t money to pay off the balance.
Teaching kids about money is one of the best lessons they can be given. With these tips, you’re on your way to helping your children receive the financial education needed to effectively manage their money.
Ready to discuss banking options for your kids? Contact us today!