Kids love to learn, so why not give them real-world money management and banking experience? You can do this by giving them allowances. Now I’m not talking about giving them an arbitrary allowance just for existing. I’m talking about giving them responsibilities, having them earn their money, and helping them to manage the money they earn. If you’re not sure that you want to give your kids an allowance, follow along for why you should and what they can learn.
Banking Experience
Letting your kids work for money will teach them the value of a dollar early on. This can translate into good financial sense as they become adults living and managing their own lives. At this stage, it will help guide them in other money-related aspects of their lives like banking. Allow your children to put their money in the bank. Then teach them about balancing their bank account, check writing, and utilizing banking services. You can also allow them to come into the bank with you to learn how to best open an account. If they’re too young to appreciate a real bank, you can get one of those ATMs off Amazon. They come with a debit card, and you can insert into and withdraw money from the machine like a real ATM.
Money Goals
Aside from having them start a bank account, you can have them start thinking about and working towards savings goals. Get them to think about what they want to spend their money on. Encourage them to spend some, save some, and maybe even invest some. Ask them about their long-term and short-term money goals. Then help them manage their fund so they can reach each one of them.
Savings Opportunities
Lastly, you need to have your child learn the value of saving specifically. Kids are going to find things to spend all of their money on. While it’s good to let them blow it sometimes, the real lesson here is helping them identify saving opportunities. How can they meet their money goals if they are not saving their money? It’s your job to assist them in determining what percentage of their allowance they want to put aside for the future and what they want to blow. Talk to them about why saving is important and how it will benefit them. Most importantly, make it fun so they are engaged and encouraged to follow your lead.
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