As we are coming to a close soon on our Take Back Your Finances 52-Week Challenge, we wanted to continue to talk about raising money-smart kids.
Last week, we shared how important it is to set some financial ground rules – or at least concepts that are age appropriate.
Well this week, we want to encourage you to take some action on these concepts. We want to encourage you to start savings accounts for your kids this week.
In fact, a separate account for each child. In our own family, we actually start this from birth, adding $0.50 weekly based on age automatically into their account.
For example, a baby under age 1 gets $0.50 in his/her account every week = $26 by the end of the year. Year #2 gets $1 in his/her account every week = $52…etc. Currently, our 12-year old receives $24 a month allowance, plus additional opportunities to earn money from us and from others (her and a couple of her siblings run some side businesses too).
This is how we do it, but you can set up whatever account or method you would like. In fact, you can start an account and seed it with a small amount initially (most banks usually require $25 anyway) and then let them build upon it, etc. It doesn’t hurt to let $25 sit there for a while if this is the only start that you can make right now.
The amount we give our children is actually their allowance. It goes right into the bank and then the 10% giving, 50% savings and remaining as spending are figured out from this account. Our older children track how much “spending” money they have. We rarely let our children under 7 or 8 make buying decisions and just let their accounts grow until we feel that they have moved into an age where we can discuss financial goals, saving for a purchasing goal, earning a little, etc.
One of the biggest obstacles to teaching good financial stewardship to children is the lack of them seeing their own money grow and having the opportunity the manage their money. This week’s task will help solve that by taking the concepts we shared last week and making them much more clear and exciting to your kids in a real and visible way – all with the hope to instill the desire from early on to make wise decisions with their finances!
This week’s task:
Set up accounts for your children and if they are old enough, have them actually join you in the process of getting them setup! It’s a wonderful adventure!
Need to catch up? Come join us on this challenge from the very beginning by clicking on the 52-Week Take Back Your Finances Challenge and sign up to start receiving your automated challenge from the very beginning!
One final thing…we also have a Facebook Group where you can engage in discussions, receive encouragement and talk to others that are participating in the challenges too for more ideas! Head to the Be Intentional with The Thrifty Couple Facebook Page HERE and ask to join us there! You can also invite friends and spouses too!
Disclaimer: We are not licensed financial planners. We are only a couple that have been just a hair-breadth away from bankruptcy and found our way out of debt with a goal to now help others. Please make sure to consider any advice given on our site and in this challenge as tips we have used ourselves; they may not work for everyone. If you have questions please make sure to contact a licensed professional.