Here's a money tip for parents who give their children an allowance: Why not teach them the concept of matching? For example, if you give your child $5 a week for allowance based on chores, tell them that if they put $1 into savings, you’ll match it! Keep it simple! You don’t even need to open an account. Just go old school and use an envelope. You could even turn it into a craft day and decorate the envelope. Maybe even have the child decorate it with some of their long-term goals. Create a deadline for when the child can access the money. This deadline will depend on your child's age because time feels different for a 5-year-old versus a 10-year-old. For the 5-year-old, maybe the deadline is until a holiday or a birthday. Perhaps for the 10-year-old, the deadline is 8th grade graduation. And for a 15-year-old, it could be for college. If you do want to dive deeper, consider putting the money into a joint account accruing interest. If the child is old enough, you and the child can review the statement each month. Depending on the child's age, you can also teach the concept of borrowing if your child asks to borrow some of their money, coming up with terms and conditions together. Ultimately, keep it simple, and have fun with it! It's a great way to teach your child about money and to start normalizing those conversations around money. #moneytips #kidsandmoney #moneytalks
We've done this will all of our kids Carol Cho, CLU®, ChFC®, BFA™. I call it the "Bank of Dad". Every time they save up $100, I match it if they put it in a savings account. We use online savings so they get a decent interest rate. We stop the match once they start working in their teens. But it helps them all to think about the best use of money. And now I have teenagers with thousands saved up to help them start their own lives. Great tip you shared!
Michel Hermence
4mo
We do this with our three and started when they where young. We also swap coins they save for notes, which helps them learn to count and gives them intermittent goals. Finally, they don’t just get an allowance for chores but for reading books >200pages from age 8. Essentially rewarding them for developing their minds
Jim Duffy
4mo
Carol Cho, CLU®, ChFC®, BFA™, I love this. As a parent of a 12 and 9 year old, this hits home. I have been trying to impose the concept of saving and making wiser decisions with your money. I am going to put this into practice today!
Arthur Stameris
4mo
You're doing you kids a big favor by teaching them about savings and money management Carol Cho, CLU®, ChFC®, BFA™ Learning about and creating disciplined money habits early-on instills essential life skills in children. Making the learning fun creates habits for life.
Darleen Priday
4mo
We did this with our daughter Carol Cho, CLU®, ChFC®, BFA™ . When she wanted something big, we would make her have some skin in the game. She really developed such a sense of pride from it and now, thankfully, is very wise with money.
Peachtree VA
4mo
Absolutely love this tip Carol Cho, CLU®, ChFC®, BFA™! What a great way to educated our children on the importance and value of saving and investing! Helping them learn and build future wealth for generations to come!
Kate Stallings
4mo
Carol Cho, CLU®, ChFC®, BFA™ What a fantastic idea to teach children about money management! The concept of matching allowance contributions is not only educational but also encourages saving habits from a young age. Plus, turning it into a creative activity with envelope decorations adds a fun and memorable touch to the learning experience.
Carol, I love your idea of teaching kids about money through matching their savings. It's a simple yet effective way to instill the importance of saving and planning for the future. Plus, the craft day to decorate the envelope adds a fun element to the whole process. Great advice!
Writes on Navigating Abundant Frontiers, Caregivers-Who-Work, and Women-Who-Lead.
4moWe’ve been using Greenlight for years with our kids. While I’m not currently aware of a way to set up automated matching, they do get parent-paid interest, and the parents can set the rate. Ours is around 25%. Incentives incentivize. #caregiverswhowork