Finances for Children | blog.firstffcu.com

With another school year about to get into full swing, money management is an important lesson your children can be taught right at home.

Your kids probably don’t have a deep knowledge about money and how to manage it. What they do know, they’ve probably learned from watching you. Here are some basics that all kids should learn about finances.

It has to be earned: As you were probably told when you were young (and possibly in a snarky tone), “money doesn’t grow on trees.” While that’s only partially true (cash is made from paper and paper is actually made from trees), money is not free. An allowance in exchange for doing chores is a great way to teach your kids about earning money.

It must be saved: An easy way to get your kids to learn how to save is to give them a goal. Whether it’s a video game system or a new toy they have been asking for, don’t just give your kids whatever they want. Have them save up for the item, and for something more expensive like a video game system – give them a savings goal and have them pay for at least a good portion of it.

It should be spent: While it’s important to save your money, it’s also important for kids to understand that money is meant to be spent. You have to spend money in order to live your life. But when learning to spend, they should learn how to spend wisely. Teach your kids about coupons, sales, and generics brand items. Saving and spending may seem like opposites, but spending wisely is also a great way to save!

Need a great way to teach your children to save? Open a First Step Kids Savings Account! Available for kids up to age 18, there are no minimum balance fees, and dividends are posted quarterly on balances of $100 or greater.* Get your kids on the path to savings today, we’re here to help!

*As of 7/2/2020, the First Step Kids Account has an annual percentage yield of 0.03% on balances of $100.00 and more. The dividend rate may change after the account is opened. Parent or guardian must bring both the child’s birth certificate and social security card when opening a First Step Kids Account at any branch location. Parent or guardian will be a joint owner and must also bring their identification. A First Financial Membership is open to anyone who lives, works, worships or attends school in Monmouth or Ocean Counties.

Article Source: John Pettit for CUInsight.com

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Your children may not always look like they’re listening, but they’re certainly watching. That’s why it’s important to make sure your actions line up with what you say, especially when it comes to managing your money. Robin Taub, chartered accountant and author of A Parent’s Guide to Raising Money-Smart Kids, said the key to raising financially aware children is to lead by example. “The first step to teaching kids to be money smart is to be a good financial model. We want to be able to lead by example. Our kids are watching and learning from us and they are aware of both our positive and negative behavior around money,” said Taub. Are your actions lining up with your words? Here’s how to be a good financial role model for your children.

1. Shop responsibly.
Show your child how to shop responsibly. Both of you can start by taking stock of what you already have so that unnecessary purchases aren’t made. Once you’re ready to shop, work together on creating a shopping list. Demonstrate how to search for sales and find coupons. Refrain from purchasing items that are not on the shopping list (unless it’s truly necessary) so that your child can understand the importance of exercising self-control at a store. Impulse spending is not only bad for your budget but also sets a bad example.

2. Take your child to work.
Let your child see that you have to work for money. Demonstrate the importance of a strong work ethic and the value of contributing your talents in exchange for a paycheck. Take Our Daughters and Sons to Work Day is a great opportunity to show your child what you do at work. Take Our Daughters and Sons to Work Day is typically held in April each year.

3. Budget together.
Budgeting doesn’t have to be a solitary act. Instead of balancing your monthly budget alone, invite your child to watch you go through the process. Explain how to take stock of how much money is coming in and going out of the household for that month, and how you plan your spending so you don’t run out of money. This will help your child see that your pockets are not an endless source of cash. It takes careful planning and discipline to make sure you’re living at or below your means. If your child receives an allowance, this is an additional opportunity to show him or her how to budget and spend responsibly.

4. Pay bills together.
Even something as mundane as paying bills can be a teachable moment. Show your child how to write a check and balance a check register. There are plenty of downloadable and printable check registers. If you prefer, you can also keep track of your banking activity on an Excel spreadsheet. Also explain the importance of paying bills on time and in full and how late payments can impact your credit score.

*Original article source courtesy of Sheiresa Ngo at Money and Career Cheat Sheet.