Tuesday, June 13, 2017

5 Ways To Teach Your Kids About Money

It's never too soon to start teaching your children about money. In fact, the sooner you can begin working to help your children understand important financial basics, the better - research shows that most children determine their attitudes about money by the fifth grade. First Bank of the Lake is here to help pass important financial basics along to your children with these five tips.

1. Talk About Money And How Spending Works. 

Having honest, thoughtful, and regular conversations about money is the most powerful way you can teach your little ones about finances. The first thing your children need to learn is the simple concept of what money is and how it is used. From there, you can begin discussing the different types of money - nickels, dimes, dollar bills, checks, credit cards, etc. Take the time to explain that Mom/Dad go to work so that they can earn money to buy things they need. You can teach them basic spending concepts by giving them a few dollars and letting them how to decide how to spend the money at the grocery store or the toy store.

2. Give An Allowance & Encourage Goal Setting.

Giving your child an allowance is a great way to teach them the value of the chores they help out with around the house, as well as a powerful way to begin inspiring smart spending habits. If your children ask for certain toys, you can respond by reminding them that they can use their allowance to make the purchase. This can be a great way to encourage them to set their sites on a financial goal and make steps to work toward it.

3. Decide How To Store Money.

Some families choose to work with piggy banks when their children are young. Others choose clear glass jars, because it is easier for children to see their money growing (or shrinking) in these jars. Some parents encourage early budgeting (and generosity) habits by having their children keep three jars and divide their money between them: one for spending, one for saving, and one for gifts/charitable donations.

4. Take Your Child To The Bank.

When your child is old enough, celebrate their graduation from piggy banks/glass jars to an actual savings account at your local Lake of the Ozarks bank. Bringing your child with you to the bank is a great time to talk to them about how banks work and the different ways to earn interest and invest money. Your child will feel very grown up and important when he/she meets the banker and hands over the money to make the first deposit.

5. Practice Budgeting.

Budgeting is a valuable skill that will benefit your child for years to come, so it's important to give them time to practice. For young kids, this can initially be as simple as giving them a certain amount of money to spend on souvenirs while you are on vacation. For teenagers, it can be more involved. Work with your teens to create a realistic budget that will account for the different expenses they will likely encounter once they are on their own - groceries, car payment, rent, etc. Emphasize the importance of not spending more than they earn so as to help them avoid racking up credit card debt.

What Are Your Other Strategies For Teaching Kids Financial Lessons?

We'd love to hear your thoughts and ideas! Feel free to share your insights in the comments below.

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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

Suite 100
Osage Beach, MO 65065

(573) 348-2265

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