With the Olympics just around the corner, we can’t help but think about the similarities between preparing for a big sporting event and preparing for financial success. Athletes don’t achieve Olympic-level skills overnight, and neither do savers. It’s never too early to teach kids the value of money by including them in the process of setting and achieving your family’s financial goals. Here’s how to get started on your journey to a savings win.
Start the conversation
It goes without saying that every family’s financial situation is different. Crissy Hayes, Vice President of Operations, says every family should discuss saving and exactly what the family is saving for, regardless of the financial situation. In addition, she says, simply keeping kids involved with the process will help them create good habits.
Tip: Regardless of the size of your financial goals, talk with your kids about the importance of funneling a portion of income to savings rather than spending it. This practice of “paying yourself first” will help you reach your savings goals and manage your budget.
Set realistic goals
Small kids have fairly short attention spans, so start small by having them save for something like a new toy or an outing to the ballpark. Consider matching funds (at least at first) to help kids meet their goals a little faster.
Tip: When kids are ready to make a deposit, let them interact with the teller. If your child doesn’t yet have an account, let him or her help you do your banking.
For more information about setting financial goals based on your child’s age, see “Financial education for kids made simple: How to set smart money goals for every age.”
Be honest about challenges to financial goals
In order to save effectively, kids need to be aware of potential obstacles that could result in added expenses. If your family is saving for a vacation, for instance, discuss exactly what sorts of things you’ll need to save for, including lodging, lift tickets, and meals.
Tip: Place an empty jar in plain sight and use it to collect spare change. Stash money in the jar that you’d otherwise spend on takeout pizza and make one at home instead. Once you reach your goal, schedule a family trip to your credit union to make the deposit.
Step up the savings game
Saving on a larger scale, such as a college education, takes more time and more funding, but the same basic steps apply. Cobalt Credit Union has a New Saver Certificate that is unlike most regular-term share certificates. You can open the account with as little as $20. So even if your teen can only put a little aside now he can still feel good about saving and earning dividends. Hayes recommends that young people start saving as soon as they have a regular income.
Tip: Cobalt Credit Union offers several avenues for young savers, including the Dollar Dog Kids Club. Simply having a savings account teaches kids that saving is important. The Dollar Dog Kids Club savings account helps kids learn to save and enjoy its rewards. Kids receive a punch card that is notched each time they make a deposit, and they’re entered into a drawing once the card has been filled.
The Banzai Financial Literacy Program helps teenagers hone their financial education and avoid making costly, real-life financial gaffes. After completing the financial scenarios, teens receive $50 in their savings account. Parents should check out Financial Avenue to beef up their own financial muscle.
Including kids in the financial goals of your family will help to ensure they won’t be at the back of the pack later in life. What financial goals has your family set?