Youth saving and spending advice that works!

[ 0 ] February 9, 2012 |

We are wrapping up our 4 part blog series from Cynthia’s advice and tips on how to teach youth on responsible savings and spending habits.  The following is her advice and what worked with her kids!

 Advice from me:  

  • Start young to develop a habit of saving verses spending by joining the Kirby Kangaroo Club
  • Become involved with the credit union by participating in the activities offered by the Kirby Kangaroo Club.   
  • Make saving fun – especially for preschoolers.  Set goals and reward these goals when met.
  • Set a rule of the % that must be saved regarding gifts of money. 
  • Tell kids “no” and stick to your decision.  All kids push boundaries to get what they want but as long as your decision remains “no”, they learn they don’t receive monetary rewards for negative behavior. 
  • Teach children that some things are expected of them with no financial gain because they are part of a family unit.  There was no payment for getting good grades because they were expected to try their best and do well in school. They were also not paid for keeping their room clean as that was their responsibility.
  • Substitute an allowance for an option of completing chores for cash.  It gives them the choice to participate or not.  Too many times an allowance turns into paying kids even when they fail to complete their chores. 
  • Encourage gifts of money for Christmas or birthday.  They learn to deposit the money and wait until there was something they really need.  For my kids, it turned out being a college education. 
  • Show them the time value of money.
  • Open a checking account and Visa credit card with a $500 limit at a predetermined age.  Taking responsibility as teenagers teaches them to carefully consider their purchases.
  • Teach them it’s not important to have what “everyone else” has.  For example:  I didn’t allow them to get a cell phone until age 16 even though their friends had one at a much younger age.  While they were not happy with me at the time, they now have money saved whereas many of their friends have been through 6 new phones but still have no savings.
  • Provide choices:  Example:  drive their parent’s hand me down vehicle for free or go buy a vehicle where they would be responsible for gas, insurance and repairs.   It teaches kids to think before making large purchases.  To this day, my teenagers still drive our vehicles so they can save money.  
  • Encourage teenagers to obtain summer employment once they turned 16.  They learn that it is better to earn money because you are more careful when it comes to deciding how to use it later.  Earned money is spent much slower than gifted money.
  • Begin direct deposit for paychecks as soon as they obtain employment – out of sight; out of mind.
  • Show them a mortgage amortization schedule and the total costs of loans with different down payments.
  • Have college students contribute to their education in some way. 
  • Teach children that how they decide to spend their money today will affect their financial decisions in the future.  Saving now puts you in a great financial position to retire early or to vacation when you do retire.

Thanks Cynthia, these are really great tips!  Comment if you have any to add or use these in your family!

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Category: Kids

About the Author ()

Hello! I have been with IAACU since August of 2011. I am a Member Development Rep. You might have talked to me a few times on the phone or through e-mail.

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