Post by: The Huffington Post | Published on: 09/14/2016


ou may not have much influence over your kids’ athletic interests or their questionable fashion choices, but you just so happen to be in the perfect position to shape their money habits. Sure, kindergartners don’t need to know the ins and outs of loans and interest rates just yet, but at this age is the perfect time to instill a healthy outlook on saving that will last a lifetime.

Instilling strong financial values in your children will not only help them thrive as adults, it’s good for the economy they’ll eventually inherit. In June the Federal Reserve released alarming data that Americans owe more than $9.7 billion in revolving credit card debt, pointing to a widespread pattern of overspending;  it’s more important than ever to make sure your family doesn’t fall into the debt trap.

So how can you make sure your child is a saver rather than a spender? In partnership with the BuyPower Card from Capital One, we’re bringing you five smart ways to instill healthy financial habits in your children early on. When they have their own bills to pay, they just might look back and thank you.\

1. Go Old School With A Piggy Bank

The toys and technology of your kids’ generation may look pretty different than those of your own youth. But one childhood object that has proven itself timeless? The piggy bank. Predating the world’s first actual banks, the practice of storing coins in kitchen jars goes all the way back to the Middle Ages, when common kitchenware was made of a clay called, in Old English, pygg. A few hundred years and one great visual pun later, piggy banks as we now know them were born.

Sometimes the best methods of teaching your children to save are those that have been time tested for centuries. Giving your children spare change to save over time for a thoughtfully considered purchase is a great way to demonstrate how savings can accrue over time.

2. Stick To An Allowance

Sensible financial skills start with a good understanding of budgeting. Allotting your children a small allowance in regular intervals will help them learn to value money and make smart consumer decisions. Instead of spending one week’s allowance on candy — nothing but a sugar high lasting a few minutes — kids will learn to save up their allowance for larger items that they really want.

Saving for and ultimately buying those high-value items on their own is a great way for kids to learn firsthand the importance of planning and patience. And when your kids do finally spring for that coveted skateboard or scooter? They’re more likely to take good care of their new toy, because it didn’t come quick or easy.

3. Turn Your Grocery Run Into A Cost-Saving Quest

The grocery store is a great real-world classroom to teach kids about making informed consumer decisions. Compare the price per pound on different brands of your dinner ingredients, and suddenly your kids are learning about comparative costs. Or, before you shop, cut coupons together or use a discount app to find weekly sales in your area. When kids are involved in the decision making process, shopping trips can be a fun way to turn a chore into a quest to track down the best buys for your whole family.

4. Resist Bailing Your Kids Out

A strong financial foundation will inevitably be built on some mistakes. When your kids pool their piggy bank and allowance savings and spend it on something frivolous, resist the urge to jump in and micromanage their decision. These are great learning opportunities that will encourage children to make more carefully considered purchases the next time around.

On the other hand, there will probably be times when your kids want to buy something that their allowance won’t quite cover. You might be tempted to just make up the difference, but saying no will be doing them a bigger favor. Instead, teach your kids about borrowing, which in the real world means accruing interest. If the consequence of floating them now is, say, no allowance for the next month, suddenly your kids might not want that video game quite as much — and you’ve put your kids in a better spot to avoid the revolving consumer credit card trap that ensnares so many twenty-somethings.

5. Practice What You Preach

These lessons will only stick if you model smart money management skills yourself. Use age appropriate ways to bring your children in on family finance conversations. Explain how you budget for weekly essentials, or how a portion of your salary goes straight into a college savings fund. Being open and honest with your kids is the best way to raise savers rather than spenders. Don’t just tell them that money doesn’t grow on trees — show them.

Raising kids with smart financial habits will pay off big time over the years. 


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