If we are to set the stage for our children's financial success, we must role model good financial behavior and give them opportunities to practice good money management skills. If you have young children (or are considering starting a family in the near future), First Bank of the Lake is here to provide you with a few tips to set your little ones up for success.
1. Talk To Your Kids About Money
In our culture, talking about money is considered taboo. While this rule may apply to the general public, it should never apply within your immediate family. Set the precedence that it is okay to talk to your children (and for them to talk to you) about finances. Talk to them about the difference between buying things you need (food, gas, etc) and things you want (a pair of shoes by the most popular brand, new TV, etc). Explain the concept of having to slowly save up over time to afford a big purchase. Most importantly, make sure they understand that once they spend money on something, that money is gone forever.
2. Role Model Money-Smart Behavior
As your children's primary caregiver, you are also their primary role model. Children are always more likely to do what you do (rather than what you say), so it is important to role model the behavior your would like your children to exhibit someday. Telling them that they should put a percentage of every paycheck in savings probably won't help if they watch you quickly go out and spend every penny you earn.
3. Give Your Child An Allowance
Believe it or not, an allowance can be a valuable teaching tool. Offering to pay your child an allowance in exchange for help with household chores teaches your child that in order to make money, he must be willing to put in some effort. If your child neglects to fulfill his duties one week, don't be afraid to withhold payment that week. Giving your child a source of income at an early age encourages them to learn how to manage their money and budget desired expenses accordingly.
4. Offer Your Child A Raise
Teach your child the relationship between the quality and quantity of work performed by corresponding her allowance amount with the type of work she does. For example, start with around $5 a week in exchange for feeding the dog every morning and night. If she picks up extra responsibilities (taking out the trash, doing the dishes, etc), increase her allowance accordingly. If she consistently exhibits excellent work, reward her behavior by giving her a small raise. When she eventually enters the workforce as a teenager or adult, she will be more likely to do well.
5. Turn Everyday Tasks Into Teaching Opportunities
Don't be afraid to get your children involved in adult responsibilities that provide opportunities for a financial education. For example, tell your child you have $150 to spend on groceries for the week and invite them to help you organize a meal plan that will fit the budget accordingly. Encourage them to make decisions, such as whether or not it is smarter to buy 20 ounces of a particular food item for $10 or 40 ounces for $15. When it comes time to check out, hand them cash and let them pay the cashier. This practice will benefit them well in the long run.
6. Let Your Child Hear Your Conversations About Your Own Finances
If you are married, you and your spouse probably have frequent conversations about your financial standing. Are you saving up for a big purchase, such as a new car or a family vacation? How much of your budget is going towards fixed expenses, such as utilities, insurance, and the mortgage? Let your children hear how you must actively manage your finances in order to stay on top of things. If they only ever see you making big, fun purchases, they may not realize you spent months preparing for them.
7. Encourage Your Children To Give Back
Your child's relationship with money is a delicate thing. It's important to teach them the value of holding onto their funds and avoiding reckless spending, but you don't want your children to become so fixated on money that they become greedy. Teach your children that if you have enough to support yourself, giving some of your surplus to others who are less fortunate is kind and valuable. Let them see you providing donations to local charities, and encourage them to do the same. (This is a great opportunity to do volunteer activities together as well, such as walking dogs at the local animal shelter.)
Remember First Bank Of The Lake As Your Financial Resource!
Parenting is an endless journey, but it is one of the most rewarding roles you will ever fulfill. First Bank of the Lake wishes you the best of luck! As your children get older and you want to give them the opportunity to set up their own bank account at the Lake of the Ozarks, remember our local bank in Osage Beach MO. We would be more than happy to assist in any way we can.
First Bank of the Lake - Striving For Excellence
Member FDIC. Equal Housing Lender.
Located at the entrance to the Osage Beach Premium Outlets!
4558 Osage Beach Parkway
Osage Beach, MO 65065