November Topic of the Month: How to Help Kids and Teens Save For the Future
As a parent, you often want to protect your children’s innocence. You want them to play, have fun, and live without many responsibilities because you know how short childhood is. Teaching them to manage money and save for their future now can still be fun—and it can help them prepare for adulthood. By seven or eight, kids have tackled enough basic math at school that they’re able to understand how money works. Not only can you empower them to plan for their future, but you might help them understand math better too.
In a digital world where most of us make everyday purchases with the swipe of a card, it can be hard for kids and teens to contextualize the value of a dollar. And spending is the easy part. It’s the saving that’s hard.
If you have a young child, we recommend starting a savings account for them. Stowing away even five dollars a month for the future will help them achieve their goals. As they get older, you can show them how you move the money around online or take them to a bank to make the deposit. Each month you can take a few minutes to look at the savings and discuss how interest accumulates over time. What a great opportunity to teach the value of compounding interest!
As your child gets older, you can help them learn to save money by asking them to attribute a portion of their allowance or paycheck to their savings. As your child enters their teenage years, it’s a great idea to give them some fiscal responsibility – perhaps they have a car payment, insurance, or a cell phone bill. It’s also a great time to teach them the value of an emergency fund. If they turn 18 with an established emergency fund and the know how to save money, they’ll be well prepared to begin adulthood.
Unfortunately, costs will continue to go up and people will require much more savings to retire comfortably as time goes on. You can help prepare your children for adulthood by supporting them as they develop financial smarts now. You can even bring your teens along to financial planning appointments. Call Orsinger Investment Group today at (724)588-9067 to discuss how we can help you prepare your children for future financial success.