Goal setting is super important when you’re teaching your child about finance—it keeps them focused, makes progress easier to measure and gives you the chance to offer praise and reward when they do well. You can set dozens of different goals for your child based on their age and abilities, but these are some of the best if you’re not quite sure where to start.
- Fill a piggy bank or savings jar.
One of the most popular approaches to getting kids involved with money is to have them start saving for something specific they want so as to teach them to plan and resist impulsive buying. Some parents have an issue with this method, however, because kids can become overly focused on the material things they can get. To avoid this issue, simply have your child have the goal be to get their savings jar or piggy bank filled—most young kids love seeing how “big” their pile of cash is getting over time. Challenge them to do it by a certain date if they can. You can offer to match whatever amount ends up filling the jar to keep them motivated without focusing on something specific to purchase. Another good option is to pick a charity together and then donate whatever amount fills the jar.
- Save for and buy a gift for someone.
If your kid already has a mountain of stuff and truly doesn’t need to accumulate more through buying, giving a present to another person can steer them away from being too materialistic. It also will help your child learn to observe what other people like or need, and they get the experience of helping or bringing joy to someone else. Keep in mind that the gift doesn’t have to be expensive—even items from your local dollar store can be thoughtful, especially if personalized with a little creativity. Gifts also can be edible treats your child makes with ingredients they buy themselves.
- Open a checking or savings account.
Piggy banks and savings jars are a great start to saving, but eventually, your child will need to move on to a more abstract way of handling their funds, understanding that their cash is still available even if it’s not in your house. Opening a checking or savings account also gives your child the chance to earn interest in many instances, get introduced to basic banking processes and have more security and convenience when making purchases at stores or online. Just shop around before opening the account to ensure that the bank has zero or very minimal fees, no minimum balance requirements and perks your child might want, such as free online statements.
- Buy a savings bond.
Like using a piggy bank or savings jar, buying a savings bond encourages your child to look into the future and curbs the emotional drive to buy right away. The differences are that, with a savings bond, your child usually has to wait much longer to get a return, and they have the opportunity to explore real investment for the first time. Government bonds are always popular, but they can look into other types of bonds, too, setting the stage for looking at stocks later on.
- Create a basic budget.
Overspending is notoriously easy to do if you don’t keep track of how much money you have available and what your regular expenses are. Don’t let your child be one of the millions who get into financial trouble because they don’t figure out on paper what to do! Although it’s ideal to have your child budget with their own money, if funds are tight and you can’t offer anything for chores or as an allowance, have your child work with whatever you set aside for groceries. They’ll still be able to figure out how much your family can spend during each trip to the store, and you can show them how tricks like coupons, bulk buying, looking at price per unit and reading ingredient labels can slash the amount spent.
Kids will have tons of different money goals to aim for as they journey to adulthood. There’s really no wrong place to start in this sense, but the goals above are among the best because they provide a strong foundation for so many other financial tasks. The earlier your child can reach these targets, the more quickly you can expand your money lessons.