Now more than ever, it's important to teach good spending habits to our kids early on, and teach them the value of money throughout their childhood. By patterning good behavior, and through making the most of teachable moments in childhood, you are more likely to raise kids who will have good spending habits now and into adulthood.
To begin with, any lesson on good money habits begins with the example you set for your children. That means:
- Making sure you have a household budget in place
- Being prudent about how you spend
- Having a savings plan.
You may be surprised at how much your children can learn merely through observation. Modeling good spending habits is a natural springboard for other important financial lessons you may want to teach:
- How work translates to financial gain - or where money comes from: some parents have done away with using the word "allowance" in favor being more direct. Their children can earn a "commission" or a "salary" based on completing age-appropriate tasks around the house. Whatever you call it, establishing the fundamental relationship between work and money is key to establishing smart spending habits.
- The value of saving: once they're earning money, it's time to help them understand the importance of saving. One approach might be to encourage your child to allocate at least 10% of his/her allowance to savings. This helps establish a financial routine early on in life.
- How to use money to make more money: some parents reinforce their children's savings habit by taking one step further - they'll set up a homegrown "401(k)," by offering to match their child's savings.
From there, you can easily begin to incorporate other good spending habits lessons, such as how to comparison-shop when at the grocery store or the mall.
Finally, there are also some kid-friendly websites which help your child develop good spending habits. Famzoo.com and themint.org are reputable, safe and engaging websites to open children's minds to healthy spending habits.
As for the other side of that coin - your saving habits - consider the benefits of opening an Online Savings Account from Ally Bank. Your money will earn interest at a variable rate that is among the most competitive available in the country published by Bankrate, and you won't have to worry about monthly maintenance fees chipping away at your hard-earned money. Even better, you can open and fund your account with any amount.
Simply visit AllyBank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.