5 Ways to Teach Kids Financial Literacy

It’s never too early to teach children the value of a dollar. In fact, even the youngest children can sort through change and begin to understand that coins and dollars have a value assigned to them. As they get older, their financial and saving knowledge matures organically, but there are things you as parents and caregivers can do to ensure they are set for success. financially in the future.

Teaching Wants vs. Needs: This is a skill that even some adults struggle with. There is a difference between the items, services and experiences we need to have to survive and those we want because we believe they will improve our lives. Children who learn this at an early age will grow up with a solid understanding and hopefully make better financial decisions as adults.

Create ways to earn money: Before children can save, they must earn money. This can be achieved with simple household chores or as they get older jobs like babysitting and mowing the lawn, then as they get older they can get part-time jobs during their secondary studies. The general rule for allowances is to pay $1 to $2 per week for each year of their age. For example, a 10-year-old child would earn between $10 and $20 per week; although this may vary depending on household budget.

Set savings goals: Children of all ages inevitably have an on-going list of items they want. Have them make a list of all the toys and gadgets they crave, then prioritize them with the most desired item at the top. Next, have the child research the price of each item and then figure out how much he should save to buy the item for himself. Depending on their age, you will have to help them. Not only will this empower them, but it will also show them how difficult it is to earn enough money to buy something they want. This will hopefully reinforce their parents’ appreciation the next time Mom or Dad buys something.

Specify a location or account to save: It can be something as rudimentary as a piggy bank, but in today’s world there are better options. For example, United Community Bank now offers an account called United’s Treasure Chest Youth Savings Account. With just $5, parents can open an account for their children and manage it in person, online or through mobile banking. The difference between this account and similar offers at other banks is that the United Community option is specifically for young children, ages 12 and under. Not only does it provide them with a place to save their money, but it also allows them to practice going to a bank and experiencing the process of depositing money.

Show them how money grows over time: Whether through the online dashboard, mobile app, or in the physical bank building, create a routine to check the child’s savings account so they can see how the money is growing over time. By making it a habit, children will grow into adults who feel in control of their finances.

These strategies will greatly improve your child’s knowledge and relationship with money. If you have more questions about United’s Treasure Chest Youth Savings Account or would like to open one, visit your local United Community Bank or click HERE for more information.

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