Most experts agree that the younger children start learning about money, the better. So you would think that in these times of crippling consumer debt, troubled investment markets and the real estate turmoil that there would be mandatory training on money management in school. But since that is not the case, here are some ideas to get you started at home.
Buy a piggy bank. This is the tried-and-true symbol of saving. Children should know there’s a place to put their money and they are free to tap into it only to accomplish a goal that the both of you discuss. This isn’t about buying stuff. It’s about setting goals.
Determine the right allowance. As early as kindergarten, your child can start to pay for things. You may want to start with small items like snacks, toys or school supplies. Try to match the allowance closely to the expenses that you expect your child to cover, this way they learn that their spending is not unlimited.
Open a savings account. Check with your bank and open an old-fashioned passbook- like savings account with your child. Try to deposit funds at least once a month to get into the habit of saving.
Discuss charity. Teaching your child to set aside a little for those who have less than they do might be a good lesson in what could be a lifetime of sharing with others.
Don’t miss an opportunity. Watch your child’s behavior to see what they want to buy. Ask them how they plan to pay for it and if it is a want or a need. Also, a child might make mistakes with money by losing it or spending it on the wrong thing. It may be a good idea to ask the child what they might do differently next time.
Adjust the conversation as they age. As children become teens, they want more autonomy with their spending. You will need to match that trust with accountability.
For more information contact Rebecca Robins, CPA/PFS, CFP™, CA Insurance Lic#0D75745 at 661-222-2331. Securities offered through Associated Securities Corp. (ASC), member FINRA/SIPC. Advisory services offered through Associated Planners Investment Advisory, Inc (APIA), ASC, David S. Reinders, CFP, Inc., Registered Investment Advisors. David S. Reinders, CFP, Inc. is not affiliated with ASC or APIA. 25129 The Old Road, Suite 105, Stevenson Ranch, CA 91381.
