With the Olympics starting, we can’t help but think about the similarities between preparing for a big sporting event and preparing for financial success. Athletes don’t achieve Olympic-level skills overnight, and neither do savers. It’s never too early to teach kids the value of money by including them in the process of setting and achieving your family’s financial goals. Here’s how to get started on your journey to a savings win.
Start the conversation
It goes without saying that every family’s financial situation is different. Every family should discuss saving and exactly what the family is saving for, regardless of their financial situation. Simply keeping kids involved with the process will help them create good habits.
Tip: Regardless of the size of your financial goals, talk with your kids about the importance of funneling a portion of income to savings rather than spending it. This practice of “paying yourself first” will help you reach your savings goals and manage your budget.
Set realistic goals
Small kids have fairly short attention spans, so start small by having them save for something like a new toy or an outing to the ballpark. Consider matching funds (at least at first) to help kids meet their goals a little faster. Cobalt Credit Union offers several avenues for young savers, including the Dollar Dog Kids Club. Simply having a savings account teaches kids that saving is important. The Dollar Dog Kids Club savings account helps kids learn to save and enjoy its rewards. Kids receive a punch card that is notched each time they make a deposit, and they’re entered in a drawing once the card has been filled.
Tip: When kids are ready to make a deposit, let them interact with the teller. If your child doesn’t yet have an account, let him or her help you do your banking.
Be honest about challenges to financial goals
To save effectively, kids need to be aware of potential obstacles that could result in added expenses. If your family is saving for a vacation, for instance, discuss exactly what sorts of things you’ll need to save for, including lodging, travel, and meals.
Tip: Place an empty jar in plain sight and use it to collect spare change. Stash money in the jar that you’d otherwise spend on takeout pizza and make one at home instead. Once you reach your goal, schedule a family trip to your credit union to make the deposit.
Step up the savings game
Saving on a larger scale, such as saving for college, takes more time and more funding, but the same basic steps apply. So even if your teen can only put a little aside now, he can still feel good about saving and earning dividends.
Tip: Start having budgeting discussions with your children and go through activities with them. For younger children check out our e-books Kids and Money 101: Discussion Guide & Budget Worksheet and The Parents Guide to Raising Financially Savvy Kids. For teens, you can start working through our College Budget Worksheet.
Including kids in the financial goals of your family will help to ensure they won’t be at the back of the pack later in life. It is, after all, a family financial plan.
