Why you should Start Early When it comes to Teaching Kids about Money
As with many other things in life kids learn by watching there parents or picking up on what their parents teach them. Many people ask, when should I start teaching my kids about money?
Well, a couple of phrases come to mind… the earlier the better and it’s never too soon to start. Time and time again, studies have proven conversations about money as a youth have an impact on you as an adult. Adults with parents who took the time to educate and help them start saving when they were young have a much better relationship with money.
You can start teaching money basics at 2 to 3 years old, but you aren’t going to teach them how to balance a checkbook or creating a budget. Start small; work on coin recognition and how to count the coins at an early age, then by 4 or 5 they can start understanding the idea of how much stuff costs when you can tell them that toy costs $5 or 500 pennies. Then they are like WOW that’s a lot!
You can start a bank account for them as soon as you get their social security number, which most of the time is a month or two after they are born. They aren’t going to pick up on what you are doing until they are 4 or 5, but making regular visits to the credit union will help them have a healthy relationship with banking especially if you have a financial like WCCU that make it fun to do banking. So, if they can grow up having fond memories of going to the local credit union they are more likely to continue that, as they get older.
Once they start to understand the concept of money and how much things cost you can start having them earn a little something for themselves with an allowance for chores and set savings goals with them. Maybe there is a toy or game they want to save up for, teach them to save their money and pay themselves first. The idea of this is having a cushion in a savings plan, for example teach them to spend no more than 50% of their earnings or even less if you prefer, put ¼ of the earnings in a potential spending bucket.
If you start young and make this a habit for them it will just become natural for them to have a cushion in their spending.
As your child continues to age and understands the concept of saving you can start having some comparison-shopping conversations with them. Since they understand the idea of money by now. They know what it means to save $5-10 while shopping and the impact it can have to their overall budget.
In the end, it is important to have regular conversations about money and budgeting as your child continues to get older. Finances are one of those things many people tend to avoid or don’t feel comfortable talking about. Don’t let this be you. Start your kids off on the right foot by opening a youth account early, make saving and budgeting part of everyday life together, and make it fun!
For more details or to open a new youth account visit one of Winnebago Community Credit Union's three branches in Oshkosh or Neenah, call 920.233.9096 or visit https://www.wincu.org/deposits/wccu-kids for the WCCU Kids program.