Every parent I meet wants to make sure their children are financially savvy. I have yet to meet anyone who dreams of dropping their child off at school hoping they will learn about credit from the nice women passing out free t-shirts in exchange for signing up for a credit card. The challenge is how do we teach children about money over their entire life at home. This is an 4 part series about how to teach kids about money at any age. Check out kids and money tips for Preschoolers, Elementary Schoolers and High Schoolers.
Today we will cover 4 Tips for helping your Middle Schooler spend and save money
Start with the End Goal
It is important to remember that our end goal is raising a financially savvy young adult. A financially savvy high school graduate should have:
- A checking account with a debit card attached.
- A low limit emergency credit card.
- A comfort level living within their means.
- Knowledge of how much they will be paying for college and how they will earn money to pay for it.
In order to achieve this goal you need to give your child as many opportunities as possible to:
- Earn Money
- Spend Money
- Save Money
4 tips for helping your Middle Schooler spend and save money
- Open a savings account – even though we all bank primarily online I encourage opening a savings account in person with your middle schooler. This gives them a chance to see saving money as a concrete experience vs money moving around online. Have them help choose a savings account by going through different interest rates. Show them a compound interest calculator so they see why interest rates matter.
- Earning Money – Hopefully your child started earning money in elementary school, but middle school opens additional opportunities. This is a great age to start tutoring or babysitting. Help your child think creatively about skills they have that other people might be willing to pay them for.
- Create savings goals – work with your child to create a list of savings goals both short and long term. This can be part of the wants vs needs list from Elementary school. Talk about how long it will take to meet these goals and add a timeline to a few – end of summer can be a good timeframe.
- Match their Goals – At this age your kids are starting to want more expensive items – hello iPhone. One mistake I see parents make with their children is having them save for a “big ticket item” that will take them forever to purchase. Kids are very short term. They will quickly figure out it will take them 8 months (aka an eternity) to earn the money for an expensive item and give up. We want kids to save and then have the “reward” of getting to purchase the item. Then they learn that saving is delayed gratification, rather than punishment. The easiest way to help them with this is to match their large savings goals. For instance my son wants an iPad mini so we have told him we will match his savings to help him reach this goal.
Every child is different and these are general guidelines. If your middle schooler is not ready for some of these ideas refer to the Elementary school list. If your middle schooler is an advanced saver check out tips for High Schooler.
Financial literacy will have fits and starts – kids will make mistakes. We want them to make mistakes now when the consequences are smaller. Stay consistent and work together as a family to educate your child about money.
Know any parents with an middle schooler who is hoping to teach them how to use money responsibly? Please share this article with them.