Help Shape Their Future Financial Habits

Financial crises can hit at any age. A recent study by the Principal Foundation found that more than half of Americans under the age of 30 have already hit their financial rock bottom. Such crises can be caused by anything from mental health and job loss to simply accumulating too much debt. While schools often provide instruction in financial literacy, there are many lessons parents can teach their kids that will prepare them to face a financial crisis.

“It’s important for children to learn early on that unexpected issues can arise, especially when it comes to finances,” says Valerie Gaede, Fidelity Bank & Trust Waverly branch. “Knowing how to manage finances and build savings can provide them with a safety net that will help them navigate financial troubles.”

Being exposed to sound financial decision-making at an early age is crucial, and there are many firsthand lessons parents can provide their kids to help shape their future financial habits. Here are seven ways parents can teach their kids about responsible money management.

Set A Good Example

Kids are observant and learn many behaviors from their parents. Explain to your kids how you spend your money and why you put off buying certain things.

Give Allowances

Hands-on experience is critical to learning how to use money wisely, but children can’t get that experience if they don’t have access to money. Set aside a weekly amount to give to your children, and help them decide the best way to use it.

Introduce Them To Spending And Saving

Bring your children with you to the grocery store, and tell them to pick out an item to buy that can’t exceed a specified amount. Have your child pay for the item at checkout to introduce them to the process of spending. This will also give them an idea of how far their money can go.

Additionally, bring your children with you to visit the bank and explain the importance of saving money in a bank account.

Open A Savings/Checking Account

Once your children start earning money, they will need a place to store it that is more secure than a piggy bank.

“At Fidelity Bank & Trust, we want to teach the new generation about saving! Bring in your child, from newborn up to 13 years old, and open a savings account or College Fund CD and they’ll automatically become an All Star Kids Club member,” says Valerie Gaede. “Through the All Star Kids Club at Fidelity Bank & Trust, your child will receive one token for every $5 deposited into their accounts, with a maximum of 20 tokens per day. The tokens can be redeemed for a variety of prizes like iTunes cards, toys, gift certificates, and much more.”

Set Goals

Talk to your children about what they want to accomplish with their money. Whether it’s putting money away for their college tuition or saving to buy a car, they will need to know what they want to accomplish so they can put together a plan that will help them achieve it.

Create A Budget

A budget is a plan that will help your children reach their goals. Review their budget and help them see how putting a specific amount of money aside each month can help them achieve their goals.

Teach Children To Track Their Spending

Once your children have a budget in place, it’s time to track where their money is going. Set a date with your children once a month to analyze their bank statements, so they can see how much was spent versus how much was saved. Then they can determine if any adjustments need to be made to help them reach their goals.

To set up a checking and/or savings account for your children, or to schedule a visit to Fidelity Bank & Trust contact us here.