When it comes to money, we have many choices about how to use it. We can save it for the future, spend it on something we want or need, or share it with others in need. When it comes to talking about money, many of us are reluctant to open up. It may be because we associate money with negative emotions like fear, worry, or shame. Or we may have never had the opportunity.
As parents, guardians, or grandparents – having open and honest money conversations with our kids is a healthy way to explore our values and habits related to saving, spending, and sharing. Here are a few concepts to explore with your child to get the conversation going:
SAVING allows us to buy something in the future when we don’t have enough money to buy it today. Maybe one day you would like to buy a car or go to college. These would be long-term savings goals. In the more immediate future, you may want to save for a specific purpose. Let’s say there is a game you want to buy. With some planning and simple math, you can map out a strategy for reaching your short-term goal. First, determine how much you need to save to buy a game. Then, think about how much money you are able to save each week. Maybe you receive an allowance or do some jobs around the house for money. Finally, calculate how many weeks (or months) it will take until you achieve your savings goal.
SPENDING is the transaction of paying or exchanging your money in return for something (either a product or service). This is what we do at the grocery store, gas station, hair salon, or the mall. When spending money, we often need to stop and think very carefully about our purchase. It’s best to ask ourselves a few key questions like: Do I really need it? Can I find it somewhere else for less? Can I wait to buy it later? It’s a smart choice to look for alternatives or trade-offs when spending your money so that it can go further. For example, you could recreate the experience of going out by cooking a meal or streaming a movie at home. Get creative and engage your family in playing a role like a hibachi chef or maître de. Set the table with a tablecloth, flowers, and nice dishes for a real restaurant feel. Make your own popcorn and set up a concession stand with assorted candy purchased at the dollar store to complete your at-home movie experience without the added expense.
SHARING means giving your money, time, or talents to others. An example would be holding a lemonade stand and donating the proceeds to an organization that helps others. Food banks, animal shelters, hospitals, and libraries are some examples of places that might accept your cash or in-kind donations. There are plenty of ways you can share with others without spending any money at all. By volunteering your time, doing acts of service for others, or donating canned goods or your outgrown clothes and toys to help those in need, you can impact others in a positive way. Engage your family and friends in your efforts to increase the size of your gift. Chances are, you will receive so much more in return.
At Allegacy, we are committed to helping our youngest members establish healthy financial habits that will last a lifetime. Tap into our resources and tools to help your child build savings, make smart spending decisions, and plan for the future.