You may not have much influence over your kids’ athletic interests or their questionable fashion choices, but you just so happen to be in the perfect position to shape their money habits. Sure, kindergartners don’t need to know the ins and outs of loans and interest rates just yet, but at this age is the perfect time to instill a healthy outlook on saving that will last a lifetime.
Instilling strong financial values in your children will not only help them thrive as adults, it’s good for the economy they’ll eventually inherit. In June the Federal Reserve released alarming data that Americans owe more than $9.7 billion in revolving credit card debt, pointing to a widespread pattern of overspending; it’s more important than ever to make sure your family doesn’t fall into the debt trap.
So how can you make sure your child is a saver rather than a spender? In partnership with the BuyPower Card from Capital One, we’re bringing you five smart ways to instill healthy financial habits in your children early on. When they have their own bills to pay, they just might look back and thank you.
Sometimes the best methods of teaching your children to save are those that have been time tested for centuries. Giving your children spare change to save over time for a thoughtfully considered purchase is a great way to demonstrate how savings can accrue over time.
Saving for and ultimately buying those high-value items on their own is a great way for kids to learn firsthand the importance of planning and patience. And when your kids do finally spring for that coveted skateboard or scooter? They’re more likely to take good care of their new toy, because it didn’t come quick or easy.
On the other hand, there will probably be times when your kids want to buy something that their allowance won’t quite cover. You might be tempted to just make up the difference, but saying no will be doing them a bigger favor. Instead, teach your kids about borrowing, which in the real world means accruing interest. If the consequence of floating them now is, say, no allowance for the next month, suddenly your kids might not want that video game quite as much — and you’ve put your kids in a better spot to avoid the revolving consumer credit card trap that ensnares so many twenty-somethings.
Raising kids with smart financial habits will pay off big time over the years. The BuyPower Card from Capital One will pay off big time, too, by rewarding users with Earnings on every purchase. With no limit and no expiration, Earnings are redeemable towards a new Chevrolet, Buick, GMC or Cadillac vehicle.