How to prepare your kids to be financially independentMel Barnes, SVP – Chief Operations Officer
Every parent wants their kids to be knowledgeable about finances, but teaching them can be difficult. Here are a few suggestions to help you prepare your children for their future.
- Start when they’re young. Teach your kids the value of a dollar early. Give them an allowance for completing their household chores. This will instill responsibility and give them a taste of what it’s like to buy something with their own hard-earned money. Do not include clothing, food, shelter or necessities when calculating allowance.
- Increase responsibilities and allowance concurrently. As your children get older, increase the amount of responsibility they have around the house. The more work they do, the more money they will earn. Give each chore a value, so that if they want to maximize their monetary potential, they can do the jobs worth more. For example, unloading the dishwasher is $1 but cleaning the toilet is worth $3.
- Teach them to prioritize what they want. Help them make a list of things they want and then let them prioritize the items. If the list is “dolls, video games and going to the movie theater,” ask them which is the most important, give a dollar number for each item and then give them a timeline of how they can save their allowance for each. Help them avoid impulse purchases like candy in the grocery store checkout line, reminding them they are saving up for that doll from the list they made.
- Budgeting. Help your children make realistic monetary goals. If they want to save up for something, such as a new bike, show them the smaller steps it takes to get there. Help them research bikes, taking money, color, wheel size, etc., into account and discussing the importance of each. This will teach them the value of prudent money management.
- Open a shared savings account. Take your kids to the bank and set up a savings account with you as the primary. Take them to deposit some of their allowance, birthday money, etc. Let them see you deposit your own money into the bank, check your balance and interact with the teller. Teaching by example is often the most effective method.
Taking these steps can increase your child’s confidence when it comes to money. As they get older and get a full-time job, they will know how to be financially self-sufficient. And isn’t that a goal for every parent?
Did you know you can open a personal savings account with Oklahoma State Bank? Our savings accounts include free benefits such as online banking, eStatements, mobile deposit,* online bill pay, mobile banking and ATM access.** Personal savings accounts are a great way to put back a little here or there for a rainy day. See osbbank.com/personal-savings for more information.
**Transactions at other banks’ ATMs may result in a surcharge fee.