Teach Your Little Owls to Fly with a Conversation About Money
The first step to teaching your kids about money is talking about money.
“The most effective way to teach is by having frequent discussions and don’t ever lecture,” said Ted Beck, president and chief executive of the National Endowment for Financial Education, in a recent Wall Street Journal article. “Look for teachable moments and always be willing to answer questions.”
A 2015 T. Rowe Price survey found that 72% of parents experienced at least some reluctance to talk to their kids about financial matters, and 18% were either very or extremely reluctant. The most common reasons given were that the parents didn’t want them to worry about financial matters or thought they were too young to understand.
But on his blog, the personal-finance guru and radio host, Dave Ramsey, encourages parents to be more open with their kids about money, even their failures. Parents’ biggest regrets are often not saving enough or going into too much debt, wrote Ramsey. Being honest about that, in an age-appropriate way, can be a powerful lesson.
So how to start the talk?
Ask questions. If you’re going out to eat, talk about the price difference between the menu options, and ask them which dish they would choose. If they select an expensive dish, talk about what they will have to give up later in the week. It's always easy to spend someone else's money. Ask the child what he or she would do if they were paying for dinner.
Make them part of your budgeting when and where appropriate. If you’re doing any kind of financial planning for the year, solicit input from your kids. Enlist them in your saving goals—no one watches you more closely than your kids, so they’re natural accountability partners! If you’re uncomfortable revealing too much of your financial picture, you can keep the discussions at a high level, but involving them makes money concrete and easier for them to understand.
And most importantly, bring your children (under the age of 18) with you to open a youth savings account at State Credit Union by April 28, 2017. While you’re in the branch, ask the Accounts Representative for a coin folder for each child. Or, if your child already has a Savings Account at SCU, simply stop in and request a coin folder.
When you return home, have the children earn quarters by doing chores around the house and fill the folder(s) with $5.00 in quarters. Bring the full folder back to SCU before April 30, 2018 to deposit the quarters into the child’s Savings Account and we’ll match that with another $5.00!
One matching deposit per child until April 30, 2018.
This is a great way to help kids learn to save money for what they find meaningful in life. A lifetime of good savings habits can start now!