Every Wednesday this month, the creators of Biz Kid$ (and authors of How to Turn $100 into $1,000,000) will be sharing tips to help build your children’s financial literacy. First up: help your kids set 2017 savings goals.
Many New Year’s resolutions begin with better money habits—make more, save more, spend less. It’s also an ideal time to help your kids jump on the money resolution bandwagon. Start by getting them to set a financial goal for the year that’s age appropriate. Ten years old? How about saving up $100—allowance, and some extra chores can get them at least part way towards that savings goal. Sixteen and have a job? Maybe $1000 is doable. Once you’re agreed on a goal, write it down, post it on the mirror, or make it the background for the phone . . . wherever it’s going to be seen every day as a reminder.
As we say in our book, How to Turn $100 into $1,000,000, starting with a financial goal is like charting a course towards the “Island of Financial Freedom.” Having a financial goal and a plan to get there will keep your kids from being adrift in an ocean of money. And, it’s a lot easier to dodge the sharks of spending temptation if there’s a goal in mind. Meeting that goal means spending less, earning more, and ideally a combination of the two. Maybe you throw in an extra reward at the end of the year for your kids if they reach their goal.
One of the keys to success is getting kids to understand the concept of PYF: Pay Yourself First (put money aside to reach your financial goal FIRST, and then spend whatever is left over LAST). If you always leave your goal of saving to the very end, you’ll likely not meet your goal—the temptation to spend is just too strong. But if you prioritize your savings goals just like a bill that needs to be paid, then you always meet your savings goals and the rest falls into place.
Older kids may want to create a budget that helps them reach their financial goal. Fortunately, there’s a plethora of financial apps targeted towards teens that make budgeting fun:
Whether it’s on an iPad, phone, or paper, it’s important to check in each month to monitor progress. You can even create a monthly family financial planning session. And if you can get kids to stick with it for at least six months, their financial resolution will turn into a financial revolution.
About the Book:
From the creators of Biz Kid$ and Bill Nye the Science Guy, here is a comprehensive guide for kids to the basics of earning, saving, spending, and investing money.
Written in a humorous but informative voice that engages young readers, it’s the book that every parent who wants to raise financially savvy and unspoiled children should buy for their kids. It is packed with lively illustrations to make difficult concepts easy to understand—all as a way of building financial literacy, good decision-making, and the appreciation of a hard-earned dollar.