Financial Fitness is a Family Affair

Improving our health – physical or financial – may mean changing the habits we  learned as children.  What was your family’s attitude about money?  Is yours still the same?  Financial health is so much more than how much money you make or save: it’s about who you are and what you want from life.  The bottom line is that it’s “All About You.” 

As soon as kids begin to handle money, it’s time to start teaching them how to handle it wisely.  Concepts like saving for something valuable, financial goal setting, and basic money management are all important lessons that generations of children have learned from parents and extended family members.   

Here are five fundamental exercises that will develop financial muscles for kids as they move through the various stages of money maturity. 

  1. Allowance.  Giving children an allowance is a good way to begin teaching how to save money and budget for things they want.  Allowances can be coupled with opportunities to earn extra money by doing chores that fall outside normal household responsibilities.
  2. Saving.  Piggy banks are a great way to introduce the concept of a savings account.  By elementary school the next step is to open a savings account at a bank or credit union. This teachable moment can highlight the value of earning interest on your savings.
  3. Critical Thinking.  As kids get older, television commercials and peer pressure are constant temptations to spend money.  Teach them how to compare items by price and quality and encourage care thinking about purchases they make.
  4. Part-time Job.  Teens that have part-time jobs begin to experience greater financial independence.  This is an opportunity to show how withholding for FICA and federal and state taxes take a bit out of their paychecks.
  5. College bound.  When young adults head off to college a prepaid spending card can offer an opportunity to learn about using credit responsibly without accumulating bad debt. 

In many ways, financial health is like physical health.  Both of them require:  knowledgeable advice, a long-term view and proactive participation.