Money Smarts Blog

Financial literacy may not be the first thing you think of when it comes to essential life skills, but what kids know about money at a young age can shape the way they manage money in adulthood. And what better way to strengthen your family’s bond than to work on saving as a family?

1.  Needs and wants game.  When teaching your kids good financial decisions, start by distinguishing between what’s necessary to have and what’s just nice to have. Explain that needs are things families need to spend their money on first – food, shelter and medicine. Meanwhile, wants are things such as toys and vacations. These should only be bought after needs have been met.

Take a piece of paper and write ‘Needs’ on one side and ‘Wants’ on the other. Go around the house together and point to different items. Have your child hold up the correlating side of paper. If you touch food this would be a need, if you touch a toy, this would be a want.

2.  Earn their own money. Find a unique and fun way for them to earn money for something they want. Let’s say your child wants to purchase a new toy, instead of buying it for them, show them how to earn enough money to purchase it themselves. Here are some fun ways for kids to earn cash!

• Garage sale: Have your kiddo clean out their old toys and put them in a garage sale.
• Lemonade stand: I know you’re thinking ‘Do people really still do lemonade stands?” and the answer is YES! It doesn’t have to be lemonade, but they can be a modern-day Lucy from the Peanuts comic and shell-out advice to passersby. Let them work at the stand and collect the cash as a reward.
• Extra chores: Have a list of chores that your kids can do to earn cash. Admit it, unloading the dishwasher isn’t your favorite chore, anyway.
• Babysitting: For older kids, babysitting is the perfect way to earn money.
• Yard work: mowing the neighbor’s lawn or shoveling snow.

3.  Savings game. Teach your child to save for special items. Sit down together and create a budget. (Example if the item is $100, if they save $10 per week, they’ll have enough to purchase their item in 10 weeks). Create a fun chart to show their progress and every time they deposit money, they get to color in a bit more of the chart.

4.  Online resources. There's an abundance of free online resources that can help you teach your kids about money in fun ways:

• Education.com: Kids learn a variety of skills including identifying and ordering coins according to their value. Geared toward first and second graders.
• Mymoney.gov has some great resources to learn about money. It has lots of information and fun games that teach you how to recognize different bills and how money adds up as you collect it.
• TreasuryDirect KIDS has great information and games.

5.  Pay it forward. Giving back to your community and those in need might be the most important financial lesson of all. Volunteer with your child for a local charity (think animal shelter or food pantry) or city-wide clean-up day. You can also encourage them to gather up old toys they don’t play with anymore to donate to a child in need. Teaching your child to help those in need is an invaluable lesson.

6.  Come to IHMVCU and open a Balance Builder Savings Crew account for your kid account. Don’t do this alone. Bring in your child and let them set up their account. Give them the opportunity to learn some basic financial literacy from the experts. Our team members will show them how to keep track of their money and start good savings habits now. Anytime there’s a deposit for their account, bring them and let them do it themselves. Make having an account and depositing into their account a big deal.