Recently Forbes published “3 Financial Goals To Focus On In Every Decade.” The article discussed goals for people 20 and over. Walter the Vault feels it’s important for children and teens to have financial goals as well.
Here are our three financial goals to focus on for each age milestone:
Baby-Toddler (2 and under)
Though this age group is young you can start teaching them basics.
Teach them about numbers and how to count
Teaching your child numbers and how to count is the first step to learning about money.
Give them a piggy bank
A quarter here, a dollar there. Whenever they receive money you can teach them to save by having them put money in their piggy bank (or vault).
Give them a Savings bond
It takes years for savings bonds to mature. If your toddler receives one around this age, then by the time he turns 18 a $500 bond might double its worth.
By now your child can’t keep everything in the piggy bank, although it is still good to have. Check out our previous post to learn how to set up a bank account.
Teach them how to use money
Explain how you earn your income and show them the different essentials you spend money on like groceries, bills, and clothing. They can also start earning an allowance by doing household chores.
Learning not to splurge
Once they learn how to use money sometimes kids tend to overspend every dime they receive. Reiterate the difference between needs vs. wants so that they know not to purchase every piece of candy or toy they see.
At this age one can open up a checking account and have more access to the money deposited in the bank. Having a checking account will help teenagers manage how much they spend in addition to how much they save.
Getting a part time job
Having a part time job is a big responsibility. It’s the first time most teens learn how to earn money on their own outside of allowance.
Learning not to splurge
With more money comes more responsibility and temptation. Teens tend to have disposable income to spend on clothes, fast food, and other items that might not be a necessity. Learning not to spend every dollar they have is an important lesson in money management.
Bonus Financial Goal: Start saving for college
Parents can start contributing to their children’s college education at any age. Having a small savings today can help alleviate college expenses later.
What financial goals would you add to this list?