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Pioneer Blog

Great Ways to Teach Finance Skills to your Children

Posted on April 1, 2019

The earlier you start teaching your children about personal finances, the better. Money management skills are just like every other skill you learn. The more your children practice and learn, the better they will be when they enter adulthood.

We’ve come up with some fun and useful ways to help your children learn skills they’ll need to find financial success in their lives.

Teach How to Save Money at All Ages


kid running through a forestFrom their early years to their first steps into adulthood, you should always be teaching your children the importance of saving money. Once they can understand what money is and what it can do, help start saving it.

Get a Piggy Bank Early On
A piggy bank is a tried and true method to start your child on the path to saving. They drop coins and bills in and watch their savings grow. But simply owning the piggy bank isn’t enough.

Children need goals to save towards, a reason why they should drop those coins into that bank. It could be buying a new toy or paying for a treat. Help them choose something they want that they could reasonably buy after a few months of saving. By working towards saving for it and buying it with their own money, the lesson of saving money has a much larger effect on them.

Open a Youth Savings Account
As your child begins to get older, transition out of using the piggy bank and instead open a savings account. This change can take the lessons learned from saving with their piggy bank, and help them understand how a savings account works. They can begin making regular deposits to their account, have ownership over something, and learn how to withdraw cash as they need it.

Plus, Pioneer’s Super Star Youth Savings Account gives incentives for children who open and make deposits to their accounts. At many events throughout the year, we offer youth deposit matches for any children with a savings account with us, rewarding them for making deposits with extra money.

Teaching Teenagers Strategies to Save Money
As your kids start to grow into adulthood, it’s time to teach them how adults save money. When they start to get jobs and gaining expenses they have to pay, more and more of their income will disappear. Many would rather use their leftover income on themselves instead of saving it away.

Teach your children how you personally save money month to month, and what tools you use. This could include having a set amount from each paycheck you save, setting up automatic transfers from your checking to savings account, or creating an additional savings account for special purposes.

Creating a Budget They Feel Rewarded With


young girl writing on paper at a tableEveryone needs to learn how to create and maintain a budget. With young children, one way to do this is by creating a fake budget with candies and let them try and figure out how to make a budget. Have expenses that cost a specific amount, an option to save the candy, and let kids put it together and try to figure out how much they can save versus eat right away.

Another idea is to have three jars for different purposes and having your children put money into each. One jar for a general savings, another for a specific goal (like a expensive toy or even donating to a charity) and the third for spending.

As your child grows, so should their budget skills. As they enter middle or high school, teach them what makes up a real budget on a spreadsheet and how to track their expenses. You could even let them take a crack at making the family budget. If you struggle to get them interested, add an incentive. Make it a challenge by telling them any money they can save that month can be theirs to keep. Have them help out with grocery shopping and the effort that is required to stay on your created budget.

Lending Your Child Money to Teach about Debt


young boy hugging a massive size teddy bearDebt is a very real part of the world, and teaching your kids about it early on can help them deal with it. One of the best ways to help them understand how debt works, and the dangers of it, is by lending them money.

For example, let’s say your child wants to buy a new $20 toy, but doesn’t have the money for it. You offer to loan them the money to pay for it, with an interest rate of ten percent per month. Each month they need to make payments towards the debt as it gains a few extra dollars in interest per month. Once it is paid off, tally up how much more they paid for that toy and ask if it was worth that extra money. It’s a great object lesson on how loans work and why saving money is often a cheaper choice.

You could even do this same lesson with your older kids and teens. They want a new video game console or smartphone? Lend them the money, charge some interest, and make sure they meet their monthly payments.

Attending Classes Where They Can Learn


woman teaching a class of kids about saving moneyIt’s sad to say, but a lot of schools don’t actively teach children and teens the rules of personal finance. Parents should be actively involved in helping their kids learn about money, but sometimes an outside authority figure can really help drive the lessons home.

Pioneer’s Super Star Youth Saturday is just the opportunity you might be looking for to help your kids learn. For 2019, we have two dates your kids can come, for free, and learn about saving money. RSVP quick though, as spots are filling up!

Consider looking into other classes offered in the area. If not, online classes are a great alternative to help teens and young adults have finance information presented in a format they are accustomed to.

When it comes to your children, you want them to succeed. A huge part of that is helping them understand how to control their finances. Help them avoid costly mistakes that could wreck their credit and leave them broke and instead be on the road to financial stability.

RSVP for our Super Star Youth Saturday!

 

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