How Teaching Good Money Skills Early Pays Off in the Long Run

How Teaching Good Money Skills Early Pays Off in the Long Run

September 25, 2012
by Kimberly Shuck
AFC® Candidate 
FINRA Military Spouse Fellow

As a child, I was taught by my parents to save my money for a rainy day.  They made sure I saved at least ten percent of any allowance, birthday or Christmas money.  I even remember saving money I received from the tooth fairy. She didn’t pay what she does now!   My parents modeled how to live within their means and be happy about it. Their actions and expectations for how I handled money laid a strong foundation for my financial success in adulthood.

How to Teach Your Teen Money Skills Before it Matters

No one is born with the ability to manage their money effectively. It is a skill we must all learn.  Beginning at a very early age our views of how to handle money are influenced most by the actions of our family and friends.   If a child grows up seeing mom and dad routinely monitoring their investments, saving money and making financially sound decisions the odds are in his favor that he will have a financially sound future.

Three Steps to Saving Money When You Start Your First Job

Raising financially competent young people is challenging.  Our youth are exposed to constant marketing on the internet and TV convincing them they need everything now and must have more “stuff” immediately. 

There are a number of tactics parents today can use to aim their child in the direction of financial success. 

Case of the “I Wantas”

Here are some suggestions:

·    Have your child to pay himself/herself first, just like my parents did, by saving 10% right off the top.
·    Match the deposits your child makes in a savings account.  This will help the account balance increase quickly and also serve to show the child how serious the parent is about saving. 
·    Help set a savings goal and place a picture of the item the child is saving for on the fridge.   Even adults have a difficult time saving if there is no attainable goal recognized.
·    Give allowance money in denominations that encourage savings.  For example, if the allowance is $5, give the child five single dollar bills.  This makes it extremely easy for the child to allocate his money to saving, spending and even charity. 
·    Talk to your child about the power of advertising and how it can persuade people to spend more than they might otherwise. 

Parents must remember that the money management skills they teach may not show up until the child is much older.  This is due to the fact that most children and young adults lack the most important key to financial success: maturity.  I am sure there were many times when my parents thought that despite all their efforts, I was forever going to be wasteful with my money.  Eventually I matured and then everything my parents taught me as a child was crystal clear! 

Tip of the Day

  • Written by Guest Blogger | March 25, 2014

    #Save #money monthly through an automatic transfer from checking to savings using #myPay   

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