Help Your Children Share, Spend, and Save
April is National Financial Literacy Month, as well as National Credit Union Youth Month. Both these events are meant to highlight the importance of financial literacy and teach Americans how to establish and maintain healthy financial habits. The theme for this year’s Youth Month is Money Magic.TM
The returns on good money management might seem magical, but they are based on sound financial habits. Credit unions across the nation are promoting the importance this month for youth to understand the financial journey. It starts with the habit of saving money at an early age. The journey is, however, more than that. Other common financial concepts to learn and understand include:
- Budgeting: This often comes down to the difference between wants and needs. Budgeting often seems to be the biggest hurdle to financial wellness. It can be educational for both parents and children to learn about financial planning together. And don’t forget your savings and setting aside money for yourself!
- Spending: How you spend can be just as important as how you save your money. Wise purchase decisions involve comparison shopping, research on goods and services, and developing sound judgement for choosing purchases correctly.
- Charitable giving: Giving to others often benefits ourselves as well. Financially, charitable contributions can be a good strategy for tax benefits and perhaps maximizing grants available to your favorite charities. But more than that, the enjoyment experienced is a powerful motivator for making a positive difference by giving back. Giving as a family is a great way to start a discussion with your children on the benefits of helping others by sharing your own means.
- Investing: It’s not surprising to be intimidated by the concepts of investing. Teaching youth about investing might seem challenging. But it can be as simple as starting with a mock account and creating a stock portfolio by selecting stocks to “invest” in and follow. Make it fun by selecting stocks your children can identify with (e.g., toy, entertainment, sports, and fast food companies). Also, include learning about investing principles such as risk and reward, compound interest and inflation.
These concepts are not in any specific order – however, you might want to create a budget before you focus on spending. Whether you are young, or just young at heart, it’s never too late to learn about and understand these concepts for financial wellness.