Attention: You are now leaving the Wintrust website.
by Connie Mei
June 21, 2018
by Connie Mei
June 21, 2018
As a child, I was given a small weekly allowance. But unlike most kids, I didn't choose to spend it right away. Instead, I couldn't wait to put it in my piggy bank. At that age, I wasn't really saving up for anything, it was just exciting to watch my bank get filled with coins.
Although I didn't realize it at the time, I was slowly learning about saving and how to manage money even at a young age. It's never too early to start teaching kids good financial values. Kids soak in the most when they are young, so why not get a head start?
The concepts and lessons on money they learn will stick with them through adulthood. Here are four of the best lessons to teach kids about finances.
One of the most common things I hear parents telling their kids is that "money doesn't grow on trees". While that is true, it may be difficult for children to understand.
To help them better grasp of this concept even into adulthood, have them earn their own allowance. Give them a small amount for each chore they complete. This will help them learn that money needs to be earned and doesn't just appear out of thin air.
As kids start earning their allowances, they'll start to accumulate a small amount of money. Teach them to understand the concept of saving by giving them a piggy bank. Or better yet, help them open a savings account at the bank.
Then encourage them to start saving a portion of their allowance money. It becomes fun and exciting every time they make a deposit. It also helps them understand the principle of saving up for the things they want.
While it's important to encourage kids to save, it's also important to allow them to spend. This helps kids understand the value of money. Money is used to buy things, but also to create memories and experiences. It's important for children to understand this.
Different things/experiences come at different prices. Allow them to spend a portion of their savings and see what they buy. Their spending habits will change over time as they start learning about how much things costs, and this helps encourage financial responsibility.
Kids learn a lot by example. That's a big reason why you should practice smart spending habits yourself. If they see you spending wisely, they will learn to do the same. And vice versa. Be a good financial role model for your kids to look up to.
You may think your kids are too young to understand the concept of money. But you will be surprised. Kids can catch on very quickly.
Make it fun for them to understand and learn new concepts about money. Pretty soon, they'll be developing good financial habits that will stick with them as they get older.