With school out for the summer, most kids are thrilled have three months of freedom. During this time, parents are tasked with keeping them entertained – and that can often mean spending money to do so. Your children might be coming to you and asking for extra cash to pay for amusement parks, concerts or other activities with their friends.
Whether your family already has an allowance system in place, or you’re just considering one, summertime is a great opportunity to teach your children about the value of a dollar. Giving kids an allowance helps them better appreciate the cost of summer fun. Below are some ideas on how to teach your kids smart money habits during the summer break.
Deciding the terms of the allowance is the first step when explaining the plan to your children. Discuss with them, no matter their age, why are receiving the allowance, whether they need to earn it, how much they will receive, how often they will receive money and under what circumstances might the allowance be revoked.
- Specify how your child can use the allowance.
While the decision to create or re-evaluate your child’s allowance may have been brought on by a need for extra cash during the summer, you should establish rules as to where and how the money may be spent. This is the perfect opportunity to teach your child about saving money and creating a budget. For example, you could require that 20 percent of each allowance payment be put into savings.
- Set up a savings account.
While working out the terms of your child’s allowance, consider using this opportunity to open a checking account or savings account for your child, depending on his or her age. Delta Community has several accounts
for children of different ages, ranging from Sandy Savers to the CU Succeed account for teenagers.
- Discuss money and each purchase with your child.
The process doesn’t end once you have decided the terms of the allowance and where and how it can be spent. Ask your child to talk to you about each of his or her planned purchases. You’ll probably be able to offer added insight or expertise, such as where to purchase discounted tickets.
At Delta Community, we always try to promote financial literacy
and summer vacation is a great opportunity to discuss smart spending habits with your child. As always, feel free to stop by your local branch to learn more. We would be happy to explain more about our Youth Savings Accounts and provide additional advice on teaching children about money.
Article submitted by R. Jones