Good money habits are important and teaching them to your child early on sets your child up to be a financially savvy adult.
Fortunately, children are naturally curious about how the world around them works, and you can use this to your advantage. Below are some ideas to use when teaching your child about money.
The three-jar management system is an ideal way to teach kids how to count money and budget. Help your child set up three jars, each with different labels: spending, saving, and sharing. When your child receives money, whether it’s an allowance or a gift, help them decide how much to place in each jar.
You can talk about how the money in each jar is to be used and why it’s important to set aside money for all three. This is a simple way to drive home the messages of saving and sharing, and the benefits of doing so.
One of the best ways to teach kids good money habits is to practice good money management yourself. Your child watches you more than you think, so showing them savings in action can inspire them, too. Here are some quick and easy examples:
When it comes to teaching your child the benefits of saving money, creating a savings account for them can be helpful. Open a custodial account at PSECU for your child. If your child is between the ages of 13 and 21, you can also open a regular (non-custodial) joint account.
Set your child up for financial success early by opening a Coverdell Educational Savings Account to help your children pay for future post-secondary education costs.
When your child has their own money, they often become very interested in learning how to manage their finances. Use their account statements to show them how interest works and help them set financial goals to get them excited while they watch their total grow.
Find more money management tips and resources on our WalletWorks page.