According to Forbes.com, children as young as 3 years old can understand simple financial concepts. At this age, your child is capable of practicing patience while saving up for something they really want.
Start by helping your child choose a toy to buy with money they save.
Make sure they pick a toy that won’t take too much time to save up for, otherwise they may become frustrated while they wait.
Once they have a toy in mind, explain how long it might take for them to save up for it using simple math. For example, if their toy is $30, you could say, "If you save $10/week, you will get your toy in 3 weeks (or 21 days), but it will take 6 weeks (or 42 days) if you only save $5/week."
After goals and expectations have been set, help them further develop their decision-making skills around how they will spend their money once they receive it.
Something you can do is get three mason jars, label them “SAVING”, “SPENDING” and “SHARING”, and help your child divide their money equally among the jars. The “SPENDING” jar can be drawn from for smaller purchases, like stickers or candies. The “SHARING” jar should only be drawn from when spending money on someone else (or charity), and the “SAVING” jar should only be drawn from for more expensive items.
Also, counting is FUN for kids! Whenever your child has more money to add to their “SAVING” jar, empty the jar and help them count it so they can visually see their progress.
BONUS step: Use positive reinforcement when your child demonstrates patience.
Many situations will present you with different opportunities to congratulate your child for waiting for what they want. For example, while your child waits in line to play on schoolyard equipment, you can say, “You’re doing a good job waiting for what you want — I’m glad you’re learning this so quickly!”.
By doing all of this, they will come to see the importance of being patient while saving, and it will become a life skill that they can feel good about.
At this age, your child can learn about how to make responsible choices with their money. Explain to them that once they’ve spent their money, they won’t have any left so they have to be thoughtful about purchases.
Planning for and buying your groceries is a great exercise to do with your child.
Start by thinking out loud in front of your child when you are making your grocery list.
For example, “We have a lot of toilet paper so we don’t need any more right now, but we are out of oranges so I should put that on the list.” This teaches them to keep supplies replenished without excess. Also, if you need a staple household item (like paper towels), you can tell them about buying in bulk to get a cheaper per-item price.
Once your list is made, take them with you to the grocery store.
As you are browsing your options, be sure to continue thinking out loud in front of them. For example, “I think I’ll buy these oranges instead of those ones because these are 50 cents cheaper!” This teaches your child how to get what they need for less.
While at the store, give them a little money to buy something.
You can hand your child $2 and have them pick out a piece of fruit based on your grocery list. This is a simple way to give them a choice to make with money.
Consider other ways to get what you need.
Be verbal with questions like, “Is this something we really need or can it wait until next week?” or, “Could I borrow this from someone else?” or, “Would it cost less somewhere else?” to teach your child critical thinking skills.
At this age, it’s a good time to shift your child’s goal-based thinking from short-term to long-term. Your child should be able to grasp the idea that the earlier you begin saving, the faster your money can grow from compound interest.
An effective way to teach your child about compound interest is to use and compare real dollar amounts, spans of time and interest rates.
First, sit down together with a pen and paper and draw a graph like this one:
Tell your child, “If you set aside $100 every year starting at age 14 and your interest rate is 5%, you’d have around $23,000 by age 65, but if you start at age 35, you’ll only have approximately $7,000 by age 65.” It’s important to use real numbers because children generally do not fully grasp the idea if you just tell them, “Your money can make you more money if you save it.”
While you are covering the topic of compound interest, help your child do some compound interest calculations so they can see how the numbers grow depending on what the interest rate is. There is also a very inspiring story you can share with them about someone who was able to retire at age 30 by using compound interest to his advantage.
Once they understand, have them pick a more expensive purchase than what they’re used to (like an expensive gadget) and show them approximately how long it will take them to save up for it.
Say for example your child earns $30 a month by doing chores around the house and yard. In this case, you can show them how long it will take them to buy that item if they save $5, $10 or $20 each month. At $20 a month, explain to them that they won’t have enough money for other purchases unless they temporarily give up a regular expense or do something to create more income (like selling toys, games or clothing) in order to reach their goal sooner.
Kids want to spend their money on impulse items on top of regular spending (like buying a snack at recess instead of packing one). This lesson will teach them about trade-offs, saving money, and how to take advantage of compound interest.
At this age, help your teen open a savings account if they do not already have one.
Teach them to deposit any income they receive into their account, and use their debit card to pay for things so they have a clear record of income versus expenses on their bank statements.
Also, ask whether they are planning to go to post-secondary school.
If so, they will need help comparing cost differences and learning more about the financial aid options available to post-secondary students. It’s also a good time to discuss what school could be like for them, depending on their lifestyle.
Start the conversations above by comparing college costs. Colleges typically have something called a “net price calculator” on their website, which tells you the approximate overall cost for a student to go there. This number may discourage your teen, but you can explain the difference in salary between those who graduate from college or university versus those who don’t. This will show your teen that post-secondary school, although a very large initial investment, can have a much greater return.
Talk to your teen about how much you can realistically contribute to their education fund each year.
This is a good time to discuss financial options with them, like applying for scholarships, bursaries and grants, or taking out a student loan and exploring government programs that can help them pay it back. Being open, honest and informative with your teen about these things will help them decide which schools would be appropriate to apply for based on cost.
Help your teen look beyond graduation.
Discuss employment prospects and how potential loan debt will affect their lifestyle once they graduate. As with any investment, it’s good to decide together if investing in a particular school is going to be worth the return or not.
Have them get a part-time job.
When your teen heads off to post-secondary school, they should be working no more than 20 hours a week to prevent their academic performance from slipping. An on-campus job is ideal because students who work on-campus are more engaged in campus life, and they tend to do better academically, too.
At this age, your adult child is likely able to make good financial decisions and it is time to introduce them to credit cards.
Start by teaching them how to establish good credit.
This important step will save them from accumulating credit card debt on top of possible student loan debt, which can make it nearly impossible for them to buy larger items (like a car or a house) due to bad credit later on. Prospective employers may also check their credit history to help decide whether or not to hire them, so having a good credit score is crucial.
Then, teach them to use their bank statement to understand their financial limits.
If your adult child has been using a savings account for all of their transactions, help them generate and print their bank statements so they can use them to learn how to budget, save money, and understand their credit card expense limit.
This 5-step process can help them identify their limits:
1. Using their bank statements, add up their total annual income.
2. Add up their total expenses for categories like rent, groceries, car insurance, utilities, and other basic necessities. Also add up total expenses for entertainment, club memberships, subscriptions and other less necessary items.
3. Divide these annual totals by twelve to calculate average monthly totals. Have them write monthly average amounts into a monthly budget worksheet.
4. Split their average monthly income into three sections so they can see what they have for annual spending, saving, and sharing money (explained in the Ages 3 - 5 section).
5. Compare their total spending money against all of their expenses. Will it cover everything? If not, they need to re-evaluate what they're spending their money on. Perhaps they can find cheaper food at a different grocery store, or the brand name clothing they love at discount stores or outlets. If they can't find ways to spend less, they will have to dip into their "sharing" and "saving" money.
Help them decide which credit card to sign up for, and discuss co-signing.
Together, research which credit cards have the lowest interest rate and no annual fees before signing them up. A parent typically needs to co-sign for their child to get a credit card. Before you co-sign, explain the importance of paying off their credit card because, in this case, it will affect your credit history too.
With all of this information, your adult child should have a clear idea of where their money is coming from, what it is paying for, and what they can expect to have leftover. They will also understand the importance of regularly paying off their credit card.
IMPORTANT: If their spending and sharing money are being used in full to cover all of their expenses, they should consider holding off on getting a credit card so their savings can continue to grow.
Mutual funds, approved exempt market products and/or exchange traded funds are offered through Investia Financial Services Inc. The particulars contained herein were obtained from sources which we believe reliable but are not guaranteed by us and may be incomplete. The opinions expressed have not been approved by and are not those of Investia Financial Services Inc. This website is not deemed to be used as a solicitation in a jurisdiction where this Investia representative is not registered.
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Kulingana na Forbes, watoto wenye umri wa miaka mitatu wanaweza kuelewa mambo ya kifedha. Katika umri huu, mtoto wako anaweza kuwa na subira na kuhifadhi pesa kwa ajili ya kitu anachotaka. Anza kwa kumsaidia mtoto wako kuchagua kichezeo cha kununua kwa pesa anazopata. Hakikisha kwamba wanachagua kichezeo ambacho hakitachukua muda mwingi kuhifadhi, la sivyo wanaweza kukata tamaa wanapokuwa wakingojea. Baada ya kuchagua kichezeo, waeleze jinsi itakavyotumia muda mrefu kukiokoa kwa kutumia hesabu rahisi. "Kwa mfano, kama kichezeo cha mtoto wako kinagharimu dola 30 kwa wiki, unaweza kusema, ""Ikiwa umehifadhi dola 10 kwa wiki, utapata kichezeo chako baada ya majuma matatu (au siku 21), lakini itachukua majuma sita (au siku 42) ikiwa umehifadhi dola 5 kwa wiki.""" Baada ya kuweka malengo na matarajio, wasaidie kuendeleza zaidi ujuzi wao wa kufanya maamuzi kuhusu jinsi watakavyotumia pesa zao mara tu watakapopokea. "Kama unavyoweza kufanya, chukua chupa tatu za mason, weka alama ""kuokoa,"" ""kutumia,"" na ""kugawana,"" na umsaidie mtoto wako kugawanya pesa zake kwa usawa kati ya chupa hizo." Chupa ya "UTUMIAJI" inaweza kuchukuliwa kwa ajili ya ununuzi mdogo, kama vile stika au peremende. Chupa ya <unk>SHARING<unk> inapaswa kuchukuliwa tu wakati wa kutumia pesa kwa mtu mwingine (au misaada), na chupa ya <unk>SAVING<unk> inapaswa kuchukuliwa tu kwa vitu vya bei ghali zaidi. Pia, kuhesabu ni jambo la kufurahisha kwa watoto! Wakati wowote mtoto wako anapopata pesa za kuongeza kwenye chupa yake ya "kuokoa", tumia pesa hizo na umsaidie kuhesabu ili aweze kuona maendeleo yake. Hatua ya BONUS: Tumia nguvu nzuri wakati mtoto wako anaonyesha subira. Katika hali nyingi, unaweza kumshukuru mtoto wako kwa sababu ya kutarajia kile anachotaka. Kwa mfano, wakati mtoto wako anangoja katika mstari wa kucheza kwenye vifaa vya shule, unaweza kusema, <unk>Unafanya kazi nzuri ukingojea kile unachotaka <unk> Ninafurahi <unk>unajifunza hii haraka sana! <unk> Kwa kufanya hivyo, watagundua umuhimu wa kuwa na subira wakati wa kuokoa, na itakuwa ujuzi wa maisha ambao wanaweza kujisikia vizuri juu yake. Katika umri huu, mtoto wako anaweza kujifunza jinsi ya kufanya maamuzi ya uaminifu kuhusu pesa zake. Waeleze kwamba mara tu watakapotumia pesa zao, hawatakuwa na pesa zozote, kwa hiyo wanapaswa kuwa wenye kujali kuhusu ununuzi. Kupanga na kununua vyakula ni mazoezi mazuri kwa mtoto wako. Anza kwa kufikiria kwa sauti mbele ya mtoto wako unapofanya orodha yako ya ununuzi. Kwa mfano, <unk>Tuna karatasi nyingi za choo kwa hivyo hatuhitaji zaidi sasa hivi, lakini hatuna machungwa kwa hivyo ningeweka hiyo kwenye orodha.<unk> Hii inawafundisha kuweka vifaa vilivyopatikana bila ziada. Ikiwa unahitaji bidhaa za kawaida za nyumbani (kama vile karatasi ya kufulia), unaweza kuwaambia juu ya kununua kwa wingi ili kupata bei ya chini kwa kila bidhaa. Baada ya kufanya orodha hiyo, chukua vitabu hivyo na kwenda kwenye duka la vyakula. Unapochunguza chaguzi zako, hakikisha unaendelea kufikiri kwa sauti mbele yao. Kwa mfano, <unk>Nafikiri nitanunua machungwa haya badala ya yale kwa sababu haya ni senti 50 nafuu!<unk> Hii hufundisha mtoto wako jinsi ya kupata kile anachohitaji kwa chini. Unapokuwa dukani, wape pesa kidogo ili wanunue kitu fulani. Mpe mtoto wako dola mbili na umwambie achague matunda kulingana na orodha yako ya ununuzi. Hii ni njia rahisi ya kuwapa chaguo la kufanya na pesa. Fikiria njia nyingine za kupata kile unachohitaji. "Kwa mfano, unaweza kuuliza swali kama ""Je, kweli tunahitaji hii au inaweza kusubiri hadi wiki ijayo?"" au ""Je, ninaweza kukopa hii kutoka kwa mtu mwingine?"" au ""Je, ingekuwa nafuu zaidi mahali pengine?"" ili kumfundisha mtoto wako ujuzi wa kufikiri kwa busara." Katika umri huu, ni wakati mzuri wa kubadilisha mawazo ya mtoto wako yanayotegemea malengo kutoka kwa muda mfupi hadi kwa muda mrefu. Mtoto wako anaweza kuelewa kwamba kadiri unavyoanza kuokoa pesa mapema, ndivyo pesa zako zinavyoweza kukua haraka. Njia bora ya kumfundisha mtoto wako kuhusu riba ya mchanganyiko ni kutumia na kulinganisha kiasi halisi cha dola, vipindi vya muda na viwango vya riba. "Kwanza, kukaa chini pamoja na kalamu na karatasi na kuchora grafu kama hii: ""Kama kuweka kando $ 100 kila mwaka kuanzia umri wa 14 na kiwango cha riba ni 5%, utakuwa na karibu $ 23,000 kwa umri wa 65, lakini kama kuanza katika umri wa 35, utakuwa na karibu $ 7,000."" Ni muhimu kutumia idadi halisi kwa sababu watoto kwa ujumla hawaelewi kabisa wazo kama wewe tu kuwaambia, ""Pesa yako inaweza kufanya fedha zaidi kama wewe kuhifadhi.""" Kuna hadithi ya kuvutia sana ambayo unaweza kushiriki nao kuhusu mtu ambaye aliweza kustaafu akiwa na umri wa miaka 30 kwa kutumia riba ya mchanganyiko kwa faida yake. Mara wanapofahamu, wafanye wachague ununuzi wa bei ghali kuliko kile walichokizoea (kama kifaa ghali) na uwaonyeshe takriban itachukua muda gani kuokoa kwa ajili yake. Kwa mfano, mtoto wako anapata dola 30 kwa mwezi kwa kufanya kazi za nyumbani na za nyumbani. Kwa mfano, unaweza kuwaonyesha muda utakaotumia kununua bidhaa hiyo ikiwa watahifadhi dola 5, 10, au 20 kwa mwezi. Kwa $ 20 kwa mwezi, waeleze kuwa hawatakuwa na pesa za kutosha kwa ununuzi mwingine isipokuwa wakiacha kwa muda gharama ya kawaida au kufanya kitu ili kuunda mapato zaidi (kama kuuza vitu vya kuchezea, michezo au nguo) ili kufikia lengo lao mapema. Watoto wanataka kutumia pesa zao kwenye vitu vya msukumo juu ya matumizi ya kawaida (kama kununua vitafunio wakati wa mapumziko badala ya kufunga moja). Somo hili litawafundisha kuhusu kufanya maamuzi, kuokoa pesa, na jinsi ya kutumia faida ya riba ya mchanganyiko. Wakati wa umri huo, msaidie mtoto wako afungue akaunti ya akiba ikiwa bado hana. Wafundishe kuweka mapato yoyote wanayopokea kwenye akaunti yao, na kutumia kadi yao ya mkopo kulipia vitu ili wawe na rekodi ya wazi ya mapato dhidi ya gharama kwenye taarifa zao za benki. Pia, uliza ikiwa wanapanga kwenda shule ya sekondari. Ikiwa ndivyo, watahitaji msaada kulinganisha tofauti za gharama na kujifunza zaidi juu ya chaguzi za msaada wa kifedha zinazopatikana kwa wanafunzi wa baada ya sekondari. Pia ni wakati mzuri wa kuzungumzia jinsi shule inaweza kuwa kwa ajili yao, kulingana na mtindo wao wa maisha. Anza mazungumzo yaliyotajwa hapo juu kwa kulinganisha gharama za chuo kikuu. Chuo kikuu kwa kawaida kuwa na kitu kinachoitwa "net bei calculator" kwenye tovuti yao, ambayo inakuambia takriban jumla ya gharama kwa mwanafunzi kwenda huko. Hii inaweza kuwa ya kufurahisha kwa vijana wako, lakini inaweza kuelezea tofauti ya mshahara kati ya wale ambao wamehitimu kutoka chuo kikuu au chuo kikuu dhidi ya wale ambao hawafanyi hivyo. Hii itakuonyesha kwamba shule ya sekondari, ingawa ni uwekezaji mkubwa wa awali, inaweza kuwa na faida kubwa zaidi. Zungumza na mtoto wako kuhusu kiasi cha pesa unachoweza kuchangia katika bajeti ya elimu. Wakati huu ni wakati mzuri wa kujadili chaguzi za kifedha pamoja nao, kama vile kuomba udhamini, ruzuku na ruzuku, au kuchukua mkopo wa mwanafunzi na kuchunguza programu za serikali ambazo zinaweza kuwasaidia kulipa. Kuwa wazi, mnyoofu na mwenye habari na kijana wako juu ya mambo haya utawasaidia kuamua ni shule zipi zitakuwa sahihi kuomba kulingana na gharama. Msaidie kijana wako aone mambo ya baadaye. Kuzungumzia matarajio ya ajira na jinsi uwezekano wa madeni ya mkopo itaathiri mtindo wao wa maisha baada ya kuhitimu. Kama ilivyo na uwekezaji wowote, ni vizuri kuamua pamoja kama kuwekeza katika shule fulani ni kwenda kuwa na thamani ya kurudi au la. Waambie wapate kazi ya muda. Wakati kijana wako anaanza shule ya sekondari, wanapaswa kufanya kazi saa 20 kwa wiki ili kuzuia utendaji wao wa kitaaluma usipunguke. Kazi ya chuo kikuu ni bora kwa sababu wanafunzi wanaofanya kazi kwenye chuo kikuu wanajihusisha zaidi na maisha ya chuo kikuu, na huwa na kufanya vizuri zaidi kitaaluma. Katika umri huu, mtoto wako wa kibinadamu anaweza kufanya maamuzi mazuri ya kifedha na ni wakati wa kuwajulisha kadi za mkopo. Anza kwa kuwafundisha jinsi ya kupata mikopo mizuri. Hatua hii muhimu itawaokoa kutoka kwa kukusanya madeni ya kadi ya mkopo juu ya madeni ya mkopo wa mwanafunzi, ambayo inaweza kufanya iwe karibu haiwezekani kwa wao kununua vitu vikubwa (kama gari au nyumba) kwa sababu ya mikopo mbaya baadaye. Waajiri wanaotarajiwa wanaweza pia kuangalia historia yao ya mkopo ili kusaidia kuamua kama kuajiri au la, hivyo kuwa na alama nzuri ya mkopo ni muhimu. Kisha, wafundishe kutumia taarifa zao za benki ili waelewe mipaka yao ya kifedha. Ikiwa mtoto wako amekuwa akitumia akaunti ya akiba kwa shughuli zake zote, msaidie kutengeneza na kuchapisha taarifa zao za benki ili waweze kuzitumia kujifunza jinsi ya kuweka bajeti, kuokoa pesa, na kuelewa kikomo cha gharama za kadi yao ya mkopo. Hatua tano za kwanza zinaweza kusaidia kuamua mipaka yako. Kwa kutumia taarifa zao za benki, ongeza jumla ya mapato yao ya kila mwaka. 2. Uwezekano wa kupata Ongeza jumla ya gharama zao kwa makundi kama vile kodi, vyakula, bima ya gari, huduma, na mahitaji mengine ya msingi. Pia ongeza jumla ya gharama za burudani, uanachama wa klabu, usajili na vitu vingine visivyo vya lazima. 3. Uwe na mtazamo wa kweli Gharama hizi za kila mwaka gawanya kwa kumi na mbili ili kuhesabu jumla ya wastani wa kila mwezi. Waombe waandike kiasi cha wastani cha kila mwezi katika karatasi ya bajeti ya kila mwezi. 4. Uwe na uhakika "Kupima kipato cha kila mwezi kwa kutumia vipimo vya ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwezi"" na ""mwaka"" na ""mwaka"" na ""mwaka"" na ""mwaka""." 5. Uwe na mtazamo mzuri. Linganisha jumla ya pesa wanazotumia na gharama zao zote. Je, itashughulikia kila kitu? Ikiwa sivyo, wanahitaji kuchunguza tena ni nini wanachotumia pesa zao. Labda wanaweza kupata chakula cha bei nafuu katika duka tofauti la vyakula, au nguo za bidhaa wanayopenda katika maduka ya punguzo au maduka ya kuuza. Ikiwa hawawezi kupata njia za kutumia pesa kidogo, watalazimika kutumia pesa zao za "kugawana" na "kuokoa". Wasaidie kuamua ni kadi gani ya mkopo ya kujiandikisha, na kuzungumzia kusaini pamoja. Jifunze kadi za mkopo ambazo zina kiwango cha chini cha riba na hakuna ada ya kila mwaka kabla ya kuziandikisha. Kwa kawaida mzazi anahitaji kusaini pamoja na mtoto wake ili apate kadi ya mkopo. Kabla ya kuwasiliana na mtu mwingine, ni muhimu kumweleza jinsi ya kulipa kadi ya mkopo, kwa sababu hii itaathiri historia yako ya mkopo. Kwa kuwa na habari hizi zote, mtoto wako mzima anapaswa kuwa na wazo wazi la pesa zake zinatoka wapi, zinatumiwa kwa nini, na wanaweza kutarajia nini. Pia wataelewa umuhimu wa kulipa kadi zao za mkopo kwa ukawaida. Ikiwa pesa zao zinatumiwa kikamilifu kulipia gharama zao zote, wanapaswa kufikiria kuahirisha kupata kadi ya mkopo ili akiba yao iendelee kukua. Fundi za pamoja, bidhaa zilizokubaliwa za soko la msamaha na/au fedha zinazouzwa kwenye soko hutolewa kupitia Investia Financial Services Inc. Maelezo yaliyo hapa yalitolewa kutoka vyanzo ambavyo tunaamini ni vya kuaminika lakini havijahakikishiwa na sisi na inaweza kuwa haijakamilika. Maoni yaliyotolewa hayajaidhinishwa na na si yale ya Investia Financial Services Inc. Tovuti hii haichukuiwa kama ombi katika mamlaka ambapo mwakilishi huyu wa Investia hajasajiliwa. Copyright 2021 Matchett Financial Services - Haki zote zimehifadhiwa. Imeendeshwa na GoDaddy