Teaching children the concepts of budgeting, saving, and investing can be a challenging topic for parents. However, the biggest mistake parents can make is not discussing these concepts with their kids.
Tip #1: Budgeting Money
A good place to start teaching your child about budgeting is to show them there is a limit to the purchasing power of money. For instance, you could tell them you have $100 to spend at the grocery store. Let them sit down with you and make out the grocery list using the weekly circular from your local grocery store.
As they add items to the list, write the price next to the item. Once they are done helping make the list, help them add up and total the amount for everything on the list. This will allow them to see just how much food $100 will buy.
Tip #2: Saving Money
Another great idea is to encourage your kids to start saving money from their weekly allowance. You can bring them to one of local credit union branches to open a share savings account so they have somewhere to deposit their money.
They can open an account with as little as $5 at The People’s Federal Credit Union when they open a Kirby Kangaroo® Kids Account. All new children’s accounts receive a Kirby Kangaroo® membership card and passbook.
For each $5 they deposit into their account, they receive Kirby Kangaroo® reward credits. Their reward credits can be redeemed for fun and exciting prizes! Each week, when they get their allowance, let them decide how much they want to deposit into their credit union account.
For example, if they get a $20 each week, they should learn to set aside at least 10%, or $2 each week. They may decide they want to deposit $5 each week just to get more reward credits.
Granted, this might not seem like much, at first. Yet, once they start to see their deposit balance grow, along with regular interest payments, they are more likely to want to deposit even more each week—not to mention all the cool stuff they can earn with their reward credits.
Tip #3: Investing Money
Investing in stocks can be a fun money-saving exercise for both children and parents. If they have a particular restaurant they enjoy eating at or a brand name product they prefer, show them they can purchase stock in that company.
Start off by only investing in one or two shares of stock since this is a learning exercise. Show them the daily stock price so they can see how it fluctuates. You could also help them make a chart to track changes in stock prices. This will allow them to see that while prices fluctuate daily, eventually most stocks slowly and gradually increase in value.
Keep in mind, these are just a few tips to help get you started on teaching your children about budgeting, saving, and investing. For more savings tips or to open a Kirby Kangaroo® Kids Account, please feel free to visit the nearest the People’s Federal Credit Union Branch or contact us at 806-359-8571 today!