How to Teach Your Child the Value of Money
Teaching kids about money can be a challenge. They may think you have an endless supply of cash and may not understand the value of money. In North Carolina, financial literacy is about average, which means there’s always room to learn more. Teaching financial literacy for kids will not only help your children appreciate what you give them, it will also provide them with a basis for a successful financial future. Here are some simple money lessons for both children and teens from Piedmont Advantage Credit Union to help your kids grow up into financially responsible adults.
Money Management for Kids
Is your child begging you for the latest video game console, the hottest new toy or their first car? Great! Use this as a way to teach valuable money lessons, including the importance of saving for what you want. This simple lesson plan can help.
- The Value of a Dollar: Start your financial literacy lesson by choosing something your child wants to buy and explaining how much that item costs. For your child to truly understand the value a dollar, it’s helpful to have them earn all or part of the cost to buy the things they want. Depending on your child’s age, this could come in the form of chores or jobs like babysitting, pet sitting or dog walking. There are often local social media boards that advertise these kinds of opportunities, so be sure to help your child find something that may work for their schedule.
- Teach Children About Saving Money: After they’ve earned their own money, help your child learn to save it. Putting money away into a youth savings account will help your child understand the concept of watching their money grow over time.
- Spending Money: Once your child has saved up enough money, it’s time for the fun part: buying what they’ve been saving up for. This rewarding experience will help them understand the value of saving and will begin to establish lifelong, healthy money management skills.
Teenage Money Management
If you are the parent of a teenager, it’s important to regularly talk to your teen about money management and teach them responsible habits with regards to saving, spending and protecting their cash. Here are a few ways to help your teen understand how to manage money on their own.
- Open a Bank Account: Is your teen interested in buying a car or going off to college someday? Both of these are going to require a lot of money and serious money management skills. Opening a checking and savings account at Piedmont Advantage is a helpful way for teens to begin saving and managing money.
- College Savings: According to the College Board, the average cost of a private college is over $50K per year. This is a hefty expense for any family, so it’s important to have a conversation early on about how much college is expected to cost at a private, public or community college when your child will be ready to attend. If you’ve been able to create an education savings fund, tell your child how much you expect to have saved so they understand what else they’d need to contribute to attend the college of their choice. This is also a great time to teach your teens about how to find and apply for scholarships or grants, and how student loans work.
- Protecting Cards & Identity: If you allow your teens to have cell phones, credit cards and/or social media accounts, it is critical to also teach them how to protect themselves from identity theft. About 1 in 15 people is a victim of identity theft, according to a 2018 identity fraud report. Unfortunately, thieves know to target those who have not yet learned how to protect themselves. If your teen has a social media account, make sure they understand all the privacy settings that should be carefully managed, and ensure they store their credit cards in a safe space. They should also be vigilant about protecting debit card PIN numbers and their Social Security number. The more open you are about helping your child securing their identity, the more you will be able to protect them now and when they are on their own.
Teaching Money Management Skills to Kids & Teens
We all have short attention spans, especially when we’re younger. Money lessons can feel a bit like school, so to spice it up, consider adding some games or apps into the learning mix.
- Money Management for Kids: When you were a kid, you always dreamed of becoming a millionaire, right? This “When Will You Be a Millionaire” calculator allows your child to plug in different numbers for investment and saving options and watch their savings grow or shrink based on their decisions.
- Money Management for Teens: Although most money management is digital now, it’s still important to learn how to write a check. Use this interactive “Writing a Check” money lesson to teach teens the basics.
- SmartyPig: A money management app that appeals to both children and teenagers, SmartyPig by Sallie Mae allows them to set their own saving goals and congratulates them as goals are met.
Financial Literacy is a Life Lesson
Whether you are parenting children or teens, financial lessons are important to prepare them for the real world. If you’d like to speak with a financial advisor at Piedmont Advantage Credit Union, please contact us to set up an appointment. We specialize in banking solutions that have benefitted members worldwide for generations.