BUDGETING FOR KIDS 101
It’s never too early to start teaching your keiki about how to manage money. If your child grows up involved in decisions with money, they’re more likely to develop healthy financial habits. Here are a few ideas on how you can teach your kids how to budget.

MONEY MANAGEMENT FOR KIDS
You might think your child isn’t old enough to understand money. However, it’s never too early to start teaching them good financial habits. Start with these simple steps to help your children understand how money works.

SET A GOOD EXAMPLE
Children are often referred to as sponges, soaking up everything around them. This includes watching your money habits. Even young children will pick up on certain habits, such as paying for everything with a credit card. While credit cards can be excellent tools when used responsibly, you may want to switch to cash when you take your child on your shopping trips.
Paying in cash instead of using a plastic card allows your child to observe you giving up something in exchange for something else. Consider allowing your child to count and hand over the money the next time you buy groceries. The act of handing over money can help teach money management for kids and allows them to practice their math skills. They’ll also probably be excited to be a part of the payment process so they can be just like you.

USE CLEAR JARS TO BEGIN SAVING
Piggy banks make great gifts and often look good on a shelf. However, most piggy banks are solid so you can’t see what’s going inside. Switch to using clear jars for savings instead of a piggy bank. Your child will benefit from seeing the money grow or decrease based on their saving and spending habits.

ENCOURAGE THEM TO PHYSICALLY HANDLE MONEY
Your child will eventually want to buy something with the money in their jar. You should let them make a small purchase with their savings every now and then. Part of budgeting for kids is allowing them to learn what happens when they spend their money.
Encourage them to compare prices for something they want before they buy. You can also tell them to wait at least 24 hours before they can make a purchase. This helps them learn to resist impulse buys. When they decide what to buy, take their jar to the store and help them physically take the money from the jar and hand it over.

PAY THEM TO DO CHORES
The best way to teach money management for kids is to have them to earn the money they want to spend. Instead of offering an allowance for free, ask your children to complete certain tasks. Easy tasks like brushing their teeth each night for a week can earn lower payments than a big chore like mowing the lawn. Set up a weekly list of chores or tasks with a dollar amount next to each. Give your child a “paycheck” at the end of each week.

OPEN AN INTEREST-BEARING ACCOUNT FOR THEM
Consider using birthday or holiday money from relatives to open a savings account for your child. You can open a children’s saving account, like Moneyhune Savings from American Savings Bank, to get started. Take your child with you to the bank and allow them to physically hand over deposits to put in their account. Sit your child down and go over their account statement each month to see how the money has grown. This step to budgeting for kids helps them learn that money can grow over time and introduces the idea of investing for the future.

HOW TO TEACH YOUR TEENAGER THE VALUE OF MONEY
Once your child hits their teenage years, it’s time to take money management for kids to the next level. Most teenagers are itching to grow up and be seen as an adult. They’re often incredibly independent as well. You can use these traits to help them build healthy money habits before they go off on their own.

DON'T HAND THEM MONEY WHEN THEY ASK
Many teenagers understand money doesn’t grow on trees. That doesn’t necessarily mean they will make smart financial choices as soon as they are making money.
If you feel your child has outgrown normal allowance for chores around the house, let them get a part-time job. You can use money formally used for allowance as bonuses in addition to the money they earn at their job. For example, if your teenager works 10 hours a week and also earns great grades, consider giving them extra cash as a bonus. Earning their own money helps teenagers think of the future instead of instantly spending the money they receive.

INVOLVE THEM IN FINANCIAL DECISIONS AND CONVERSATIONS
As your child gets older, budgeting for kids can morph into budgeting for adults. Invite your child to sit in when you have conversations about money. Bring your teenager with you to important money decisions, such as filing taxes or meeting with a financial consultant. Show them how you budget and share the tools that you use to keep you on track.

HELP THEM OPEN A CHECKING ACCOUNT
If your teenager gets a job, it’s probably time to open a checking account. Checking accounts give your child much faster access to their money. If they get a debit card, use this opportunity to remind them that plastic cards can run out of money. As your teenager gets used to using a debit card responsibly, they’ll be better prepared to open a credit card when they’re an adult. Encourage your teenager to properly manage their money by visiting an ASB branch and opening a checking account today.

While teaching your kids how to manage money and budget takes effort and time, it can reap many rewards in the long run. Consider tackling one or more of these tips today to help get your keiki on track towards financial success.