It is important to teach your children about money at an early age. These finanical tips for kids are a great way to get the conversation started.
1| Teach children to budget.
While young children don’t have to worry about household expenses and paying for auto insurance, it is still important to teach them how to budget. Being smart financially at a young age, lays the foundation for them to be fiscally responsible adults.
We give our son an allowance each week. This gives him a bit of financial freedom and gives him the chance to learn more about money. With his allowance, we talk as a family about how he should spend, save, and gift his money.
2| Let children spend as they wish.
This part can be difficult for many parents. We all cringe at the the thought of another building set, fidget spinner, or more doll accessories. However, allowing your child to spend their money will be helpful down the road. Spending $5 on another whatever-toy-catches-their-eye may mean that they don’t have enough money to go to the movie with a friend. It’s important to not cover that expense. Let your child learn from their spending choices.
3| Teach them the importance of saving.
It’s important to encourage your child to save for short-term goals, like a new book, and long-term goals, like collge. College may seem like it is so far away, the reality is that it will be here before you know it. Talk with your child about how parents can help them save for college by investing in the MEFA U.Fund College Investing Plan. This is the name for the Massachusetts 529 college-investing plan. It’s a tax-advantage savings plan offered by the Massachusetts Educational Financing Authority managed by Fidelity.
Saving can be the hardest piece for your child. With so much technology, everything is accessible quickly by the swipe of a finger tip. Reminding your child that the money they have marked as savings shouldn’t be spent on a new toy today, but should actually be saved for something special – like mom’s birthday gift!