The age between childhood and young adulthood is a pivotal time for learning and growing, and comes with great opportunities to expand your child’s understanding of financial literacy. Tweens may have a foundational understanding of currency and savings, but they are likely just beginning to grasp and develop healthy money habits. Furthering their understanding of healthy financial habits, and allowing them to develop their own, can be easily achieved with these helpful tips.
Using an Allowance to Teach Savings Habits
Using an allowance as a tool to introduce money topics at an early age can help teach kids about money through real-life experiences, as well as further their understanding of savings, how money accumulates over time, budgeting, and financial responsibility. Similarly, this may help your child to appreciate the importance of working to earn money, encouraging them to get a job earlier on in their life. By making and managing their own money, your tween will take an active role in their own finances, allowing them to watch their savings grow in realtime and further develop healthy spending habits.
The decision to pay kids an allowance is different for every family, and can be tailored to each family and their comfort levels with this concept. Often, an allowance is based on payment for completing household chores and duties, with amounts varying from a weekly wage based on age, to a set amount for each chore. A commonly used rule of thumb is to offer $1 per week for each year of the child’s age. For example, a 9 year old would receive $9 per week.
Taking an Active Role in Spending
Watching their funds grow from earning an allowance can help your tween to gain a deeper appreciation for their savings and the things they want to spend their money on.
Once their savings have developed, your tween may be interested in spending some of their saved money. While children aren’t known for their abilities to delay gratification, working for their money and seeing its slow progression in real time may encourage them to budget some of their savings and set specific goals to save up for the things that they really want. By doing so, they take a more active and attentive role in their spending, improve their decision making skills, and establish a sense of financial freedom.
Goals for the Future
Allowing your tween to earn money and watch their savings grow can embolden them to set goals for themselves and their future. For example, the next time they pick out an item that they want at the store, point out the price and encourage them to work towards saving that amount of money. This will not only help to establish a sense of work ethic and working hard for the things you want, but will encourage healthy goal setting and budgeting practices.
Teaching Your Teen to Manage Money Responsibly with Piscataqua Savings Bank
If your tween is at an age where they are outgrowing a piggy bank, and you wish to further their financial literacy skills, it may be time to join the Piscataqua Savings Bank Kids’ Bank program. To get your tween started on the path to financial success, visit us at 15 Pleasant Street in Portsmouth, NH or get started by opening a savings or checking account online on our website.
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