3 Ways to Help Kids Manage Money
Spring is just around the corner! As your grass begins to grow and your flowers start to bloom, you can also begin planting the seeds with your children or grandchildren to start growing their financial well-being. In fact, if you miss the opportunity to plant those seeds now while they are young, they may never have the guidance they need from those they most trust. A recent COUNTRY Financial Security Index survey found nearly half of Americans learned about managing money and finances on their own. The survey found people trust their parents the most for financial advice, even more than a financial adviser.
As you and your family take that first spring walk down the block or through the woods, consider these simple steps toward starting the money conversation with the children:
- As soon as kids can count, they can start to learn about money.
- Early on, you can use coin banks so kids learn how to save, think about money and learn how to share with others.
Use Chores or an Allowance as a Teaching Tool
- When kids reach the age to do chores or to receive an allowance, you can teach them lessons about saving and responsibility.
- By creating a set dollar amount for chores, kids learn about the relationship between work and money.
- The free ChorePal smartphone app from COUNTRY Financial is a good tool parents can use to assign chores while rewarding kids for being responsible. Parents assign values to chores and kids can mark the chores completed. To get the app, visit GetChorePal.com.
- An allowance can also be a teaching tool, opening the door to discussions about spending, saving, and even investments and donations.
Introduce a Budget
- Creating a budget is one of the most important financial habits people can learn to develop. And it’s a great thing to teach kids because it puts financial decisions in their hands.
- More experiences thinking about and practicing budgeting can make it easier for kids to learn responsible money practices.
- You can try the “50-40-10 system” for each allowance or birthday dollar received – save 50 percent, spend 40 percent, donate 10 percent. This concept helps kids understand the importance of categorizing money.
April is Financial Literacy Month. COUNTRY Financial partners with the Federal Reserve and other organizations to educate students across Illinois and all states we serve on how to establish and maintain healthy financial habits. For more information about personal financial security, visit countryfinancial.com/simplesteps.