5 Things You Can Do This Summer To Help Your Kids Become Financially Savvy
Now that school is out and warmer weather is here, you probably want to relax and take things a little easier, and who can blame you? After all, kids aren’t the only ones who look forward to summertime.
Of course, summer isn’t just for relaxing. It’s actually the perfect time to sit down as a family and assess just how far you’ve progressed toward important savings goals - such as your child’s college education.
Summer is also a great time to reinforce good financial habits with your kids. Here are five summer activities that will help your children learn about finances:
1. Dust off the piggy bank.
It may sound a bit old fashioned in this digital age to suggest digging out the piggy bank, but piggy banks are great for small children. Numbers printed on paper often seem too abstract for young children to grasp. Coins and bills children can see, hold, and count make the concepts of money and saving easier to understand.
For older children, a trip to the bank to open a combination checking/savings account may be in order. Another option is a reloadable prepaid card with a set monthly allowance. This strategy goes a long way in helping teens get used to the idea of living within their means. Just be sure to get a card with low or no monthly fees.
2. Consider age-appropriate work.
Nothing makes more of an impression on young savers than earning their first few dollars. For younger children, that could mean assigning a few extra chores for which they can earn a “wage.”
For older children, that could mean getting a summer job. When your child brings home that first paycheck, be sure to spend time reviewing required tax deductions together.
3. Encourage fiscal responsibility.
After children have begun earning money, encourage them to separate funds into short-term and long-term savings. Talk to them about which items they would like to spend a portion of their money on now. Explain the reasons they will need to save a portion of their money for long-term goals. Making tough decisions about how much to save and how much to spend is a valuable lesson in managing money.
Young savers will learn just how much things cost as they decide what they want to spend their hard-earned dollars on!
4. Talk about the future.
Many parents are reluctant to discuss their finances with their children – perhaps out of a desire to provide a sense of security or due to their own experiences with money. However, studies show that children whose parents actively teach financial skills and strategies at an early age grow up to be more financially prepared. In fact, one of the country’s leading authorities on personal finance says money habits are already set by age 7.
By having a conversation with your children now about the importance of saving – along with earning good grades and getting a college education – you can better prepare them for the future, especially when it does come time to leave home and begin making decisions on their own.
5. Open a Future Scholar account and track it together.
Children are never too young to start learning about investments and “the magic” of compound interest. What better way to learn than to open a Future Scholar 529 College Savings Plan?
Many parents like to track the account together with their children. That way children can see how the account is growing as they grow. You can also get the entire family involved by inviting other family members to contribute to Future Scholar on birthdays and other milestones.
In addition to administering the Future Sholar 529 College Savings Plan, the Treasurer’s Office also sponsors the Future Scholar Financial Literacy Program. We believe it is crucial to instill good financial habits in children now so that they will grow to become financially confident and knowledgeable leaders of our state in the future - and that includes your kids!
So this summer relax, have fun, and make time to teach your children some important financial lessons!
For more information about South Carolina’s Future Scholar 529 College Savings Plan visit http://www.FutureScholar.com.