Yes, we’re in the month of Easter, but did you know that April is also National Financial Literacy Month! It’s a time to highlight the importance of financial literacy and no better audience to focus on than the youth of today.
As a company that helps to elevate, educate, and encourage girls of color to be unstoppable, Corage Dolls wants to see all kids achieve their goals and for families to have the opportunity to help their children learn how to save, especially young girls. This is impactful because it helps elevate these communities, builds education around saving, spending, and investing, and encourages growth in generational wealth.
Do note, there are many ways to teach kids about saving, but no matter what it’s never too early to get the conversation going!
An area that is working towards making this come true is in my good old home state of New Jersey. Back in January 2019, acting New Jersey governor Sheila Oliver signed a new law that now requires financial literacy education for NJ’s middle school students. NJ Assemblywoman Angela V. McKnight and personal finance expert Tiffany “The Budgetnista” Aliche (#BlackGirlMagic all around) were both instrumental in getting the legislation passed.
According to NJSpotlight.com, Assemblywoman McKnight said, “Many young people go into adulthood knowing little about finances and end up making decisions that cost them in the long run...teaching our kids early about the importance of managing their money and making sound financial decisions can prevent them from making costly mistakes and set them on the right financial path.”
Now that you have that baseline, let’s jump into 5 ways to teach your kids to save:
1. Start with an allowance – “Giving a child an allowance, even a small one, empowers them to start making choices about the money that they earn. Make them understand that receiving an allowance is their opportunity to save up for things they want. Consider giving your children weekly or monthly allowances starting as young as kindergarten.” https://www.lgwfcu.com/financial-education-blog/five-lessons-to-teach-your-kids-about-saving-money
2. Show them the value of delayed gratification – “It's only natural for money to burn a hole in the pockets of the youngest kids. But it's important for them to discover the benefits of delayed gratification. If there's a toy or a game they have their eyes on, suggest they forgo spending their allowance on ice cream or another immediate pleasure and instead save for a few weeks to make the bigger purchase.” https://www.merrilledge.com/article/tips-teach-your-young-children-financial-responsibility
3. Open up a savings account – “A piggy bank can be a great way to teach your kids the importance of saving while giving them an easy way to do it, but once the piggy bank is full, take your child to the bank to open up a savings account for them. Have them count how much money is going to be deposited, so they can have a physical understanding of how much money they have. Show them the final number and reinforce the idea of interest. It can provide a great source of motivation for your kids if they understand that their money will grow over time as long as they don’t touch it.” https://www.windgatewealth.com/six-ways-to-teach-your-kids-about-saving-money/
4. Explain the life choice decisions by spending money – “It’s important to explain to your child, “Money is finite and it’s important to make wise choices because once you spend the money you have, you don’t have more to spend,” Kobliner says. While at this age, you should also keep up with activities like the saving, spending and sharing jars, and goal-setting, you should also begin to engage your child in more adult financial decision-making.” https://www.forbes.com/sites/laurashin/2013/10/15/the-5-most-important-money-lessons-to-teach-your-kids/#5def98768269
5. Make it fun (They are kids you know!) – As many kids of today are growing up in a digitally driven world, engaging them through money-saving apps can be a great way to make their experience more enjoyable and keep their attention on an important topic a bit longer. Here are a few apps worth considering including PiggyBot and iAllowance. http://www.themint.org/parents/parent-blog.html
6. As an added bonus, I decided to provide you with an extra link – not 5 but 20 ways to teach your kids how to save! Plus, since financial literacy is a journey that kids can build upon each day, financial understanding can occur at any age so check out some more great tips here. https://www.moneycrashers.com/teaching-kids-save-money/
I hope you enjoyed this read or found it helpful!