LOUISVILLE, Ky. (WAVE) - From paying the mortgage and daycare to putting food on the table, it’s not easy to save money, but leading by example is so important.
New advice from MoneyCrashers.com lays out the best ways for parents to teach their kids how to save money.
One tip is for parents to be open and honest with their kids when it comes to saving, budgeting, and ultimately how you spend your money.
If you have younger kids, start by using fake money, like Monopoly money, to help teach them the value of a dollar.
If they pick up their toys on time, or help with chores, reward them, but make sure they have a special place to put it like a piggy bank.
Think of it like using training wheels; they’ll use a piggy bank now, and be ready for an actual bank account when it’s time.
If your kids are older, avoid using an open wallet policy. Instead, have a family fund where you and your kids both know how much money is in there, and you budget together. At the beginning of the month, set aside money for specific things like a trip to the mall, or a family night at the movies.
If your kids spend too much on one thing, and can’t afford the other at the end of the month, it’s important to stand your ground. The real world doesn’t give in when it’s time to pay rent, and as parents, experts say it’s important not to, either.
Another good piece of advice is to have a save, spend, and give account. Teaching little ones that someone will always be less fortunate will make for smart savers and grateful kids.
And, don’t forget about the three main saving accounts. Experts say to start teaching your kids about personal, emergency, and retirement accounts as early as elementary school.