I say kids and savings; you say piggy bank. That's how their money savings journey starts at a really young age. It's up to the parents to keep them engaged in learning about being financially fit because this is one lesson most likely they won't learn at school. From age 5, kids should start learning more about setting financial goals in concepts they will understand.
Short-Term Financial Goals
At this age they are starting to learn about standing in line for their turn at the park slide, anticipating their birthday party, or waiting for Christmas morning. Once they grasp the notion of now and later, you can use those examples to explain to them that sometimes we all have to set a goal to buy an item we want.
I'm sure they have a small toy they want in mind (with all those commercials, what kid doesn't!) but don't have the money to buy it right away. Count together how much money is in the piggy bank and how much money they need to get to the goal. Create a budget plan with them on how long it will take to get the toy, tell them the amount of money you can contribute within the plan timeline, and what extra activities or chores they can help with to accelerate their savings.
Long-Term Financial Goals
Familiarize them with the idea of owning a savings account and setting money aside for bigger purchases or a future need. You could associate long-term with the end of the school year for them to get a better idea of how long it will take to have the money. Good examples for them to save for might be to go a specialty camp, buy a better computer or bike than what they already have or to have spending money for the summer.
Once they have picked a goal to save for, chat about the plan of action to make this long-term financial goal happen. Share with them what extra weekly chores or small jobs they can do to earn money. Be as consistent as you can to make this part of their routine. Sit down every month to take a look at the savings account statement and how their money is piling up putting them closer to the goal.
Make it a fun experience so they will want to do it again and again. They'll be on their way to becoming a financially fit adult.
Yoly Mason, a blogger living in Orlando, Florida, wants to live in a world where Latinas can enjoy an abundant life with a small budget, and being in debt is as out of style as the rotary phone.
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