Teaching your child the basics
More often than not, we assume that children know that you must earn money to have money to spend. We also assume they know what “earn” means. Start early with the basics. Explain why you go to work everyday and that this is how you make the money needed to pay for their needs and wants. Let this lead to a conversation about how they can earn money, too. Come up with ideas together about how to earn money – more chores around the house, bake sales, cutting lawns in the neighborhood, raking leaves, walking dogs, etc.
Meanwhile, include your child in your interactions with your credit union or bank, whether they are online or in person. When your child has enough money to open an account, take him or her with you and involve them in the process. Make sure the interest to be earned is discussed and understood since compounding is a powerful tool.
Don’t forget to include discussions about charitable giving to help those less fortunate. Also, drive home the point that your child doesn’t need to purchase everything he wants, and that needs must take priority. Children should learn to prioritize their spending on “wants”. This lesson is easy to teach if there are multiple wants. Explain that if they spend that hard-earned cash on one of the items then none may be left for the others. Help them make smart decisions about that impact. This can be aided by tracking the saving and spending results in the savings passbook.
Learn more about tips for teaching your child about money at: The Mint
Your Cornerstone representative can help. Call 615.385.6866 to get your child started on the right path with an Adventures in Savings account.