All parents agree - we want the absolute best for our children! We strive to educate them, pick them up when they fall and guide them on their individual paths to success. A fundamental part of this lifelong aim is to instruct our children in the ways of personal financial management, especially earning and saving money. As such, we have assembled some advice to help you teach your kids how to earn and save money this summer.
Don’t Be Afraid to Talk About Money
It’s important to establish a culture of openness and comfort around the topic of money in the home. Like any other important matter for youth, the more comfortable parents are in honestly discussing money, the more relaxed children will be in approaching the subject. Regular conversations about earning and saving money enables parents to first, prior to teaching, acquire a greater understanding of a child’s disposition toward fiscal affairs. Moreover, these exchanges provide parents the opportunity to share personal experiences of success and failure, become more relatable to their child and thus establish them as viable mentors.
Lead by Example
From social learning theories outlined by famous psychologist Albert Bandura, we know that modeling is a primary method of learning, wherein behaviors are both consciously and unconsciously patterned after others. Parental modeling has been further shown to serve as one of the greatest influences on youth, and consequently demonstrates how significant the financial practices of parents can be on children. Thus, parents must “walk the walk and talk the talk” by displaying appreciation for their earned income and expressing the security they feel because they are saving.
Emphasize Consistent Principles
It’s essential to be consistent in your instruction of general financial principles and standards. For example, parents may positively assert that their child should have a summer job, save a portion of their paycheck and engage in other practical behaviors to establish habits conducive to financial freedom and self-reliance. Additionally, parents should be consistent with the financial parameters they set for their child. Over time, this promotes well-established habits in youth that they will be motivated to maintain.
For example, if it is initially agreed that a child is required to save 10% of their earnings, and that they are responsible for the expenses of gas and insurance for their vehicle, the child will be gradually introduced and accustomed to regularly earning, saving and meeting expenses.
Find Creative Ways to Motivate
If a parent finds that their child requires additional motivation to earn and save money over their summer break, there is a surplus of ways to reinforce positive behaviors. Listed below are some suggestions that are designed to be implemented in conjunction with the previously mentioned recommendations. Parents are of course also encouraged to think creatively, and come up with ways that they know will work for their individual children.
- Praise your child’s success at earning and saving money.
- Bring your child into any Bank of Utah location and our friendly tellers will help them open a savings account and talk to them about options for tracking their savings.
- Bank of Utah’s Regular Savings for Children account encourages kids under 18 years old to learn about personal finance. With an initial deposit of $10, minors can gain valuable early money-management experience.
- Consider matching your child’s savings to get the process started, such as matching the first $500 saved by your child.
- Help your child create a budget, allotting funds to their savings, any expenses and even entertainment. This will illustrate the necessity of saving.
- Work with your child to set reasonable goals for using their savings.
Bank of Utah’s expert knowledge in personal finance combined with your love and understanding of your child, makes us the perfect team to teach your child to be financially responsible, starting this summer.