As you solidify your New Year’s resolutions, it’s a great time to start having a conversation with your kids – whether they’re in elementary school, high school, or college — about smart ways to navigate finances. Starting the conversation earlier on will help to create healthy money habits as they grow, ultimately benefiting their financial future.
To help you get started, here are tips that make it easier for kids of all ages to learn how to save, budget and begin managing their finances more independently:
1. Start the conversation
It’s never too early to start talking about money in a realistic way so kids can understand how it’s used to support your lifestyle and help you achieve your goals and dreams. Begin the conversation in an age-appropriate way that highlights ideas, such as knowing the difference between needs and wants, saving for something special, and tracking the money you earn, as well as the money you spend. For example, young children can understand the idea of saving up money from their allowance or lemonade stand to buy something they want in the future.
2. Take notes and use tools
As your kids get older, explain the budgeting basics – even as simple as listing what you earn and what you spend, so you can ensure you won’t spend more than you have. Any leftover money is best put in savings first, then they can consider working toward items or experiences they might want to buy. There are many budgeting resources out there, so you can find the one that works for you, including budget worksheets to track spending.
3. Get organized and go digital
Financial confidence starts with getting organized. You can find easy-to-use budgeting tools that work for kids and parents both, with different levels of parental oversight and management suitable for different age groups. Whether it’s a first banking account, or an account geared towards a high school or college student, there are multiple options that can help students of various ages with firsthand digital transactions and account balances, assisting with budgeting and saving.
4. Plan for the future
According to Bankrate, 59% of Americans are uncomfortable with the amount of emergency savings they have, and 27% have no emergency fund at all. It’s important for kids of all ages to know that unexpected events in life can happen, so planning ahead may help reduce stress and better cope with whatever may occur. For this reason, building an emergency fund or saving for a rainy day is a crucial skill to learn.
Your kids can start learning and practicing vital money skills now that will stay with them for life, as well as how to use financial tools so they will be able to stay on top of their finances and achieve their goals.
Learn more about all the options available to get your kids started on the right financial footing at chase.com/studentbanking.
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