By Holly Markham, VP, Community Engagement & Student Strategy
Education has moved online, and parents have become teachers in the age of COVID-19. Math, history, science are some of the traditional disciplines, but what if parents expand the curriculum and teach children how to save?
Saving money is a habit that takes time to build, and is one that many adults have yet to master. Almost three in ten Americans have no savings set aside to cover emergency expenses. Our children can’t escape messaging that glamorizes spending, so we need to equip them with equally entertaining and powerful messages to share, save, and spend smart.
First step, make the process fun! Kids need to enjoy the route to becoming money-smart. Some credit unions and banks offer resources– like apps, books and online games—to teachers and parents for use in the classroom or the home to help children get excited about saving money.
Second step, be sure to include the three core money-smart skills that children need: 1) knowing the difference between needs and wants, 2) understanding how to make smart money choices (share, save and spend smart) and 3) setting goals and saving for them. Engaging kids with positive money messages can help prime the pump and get them excited about something other than spending money.
The three-jar method is a simple system to help kids learn to make smart money choices. Set aside three jars: Save (this is the jar for setting money aside for longer-term goals), Share (this is the jar for charitable giving) and Spend Smart (this is the jar with funds for buying what they need). Set up an allowance. When you offer an allowance in exchange for chores, you’re also teaching kids the value of their hard work. Remember that the primary objective is to give your kids real-world experience with money.
Final step, don’t be intimidated by your own lack of knowledge or past mistakes. In fact, sharing some of your own errors may help your kids learn more; mistakes can be powerful learning tools. Kids may occasionally make bad decisions with their money, and that’s okay.
Small mistakes now (like buying a cheap trinket that disappoints) can help to avoid agony down the road (committing to a high interest credit card, for example). There are no silly questions. If you want to learn more, visit the GTE Financial website at https://www.gtefinancial.org/education/gte-education/money-mammals.