As we settle into the new year, is one of your resolutions improving the financial health for your family? If so, there are many ways for everyone to learn healthy money habits. Ohio 529 CollegeAdvantage has some ideas for how your family can learn to save together while still having fun.
Board games
Board games are a great way to learn valuable life lessons while playing together as a family. You can select games that teach basic principles of personal finance, like the Game of Life, Pay Day, or Monopoly. There are also games that specifically focus on money management techniques like Cash Flow 101. Depending on the ages of your children, you can choose board games that are specially tailored to their current level of maturity and ability to learn more complex insights of personal finance.
As your family plays these games together, you1 can learn core financial concepts to help them in the future. And you can brush up on your personal financial skills.
Books
Reading with your child or grandchild builds their language skills. It can also build their money skills. When you read age-appropriate money books together, it builds your children’s or grandchildren’s understanding of how money works and how they can make money work for them.
This time together also allows them to ask questions, which can demystify talking about finances and allow for more open communication. You know that they are learning when they are curious about what the family is doing with their money. Your willingness to discuss the family’s finances and budget can save your children and grandchildren from learning some painful money lessons when they are older.
Like board games, there are age-appropriate books on money to read together. And who knows, you may learn a new thought or two to add to your personal finance thought processes.
Learning how to save
If your children are young, introduce them to basic budgeting concepts with spend, save, and share jars. They can watch how Elmo from Sesame Street saves in those three jars. After they have earned money from their allowance or completed chores, talk to them about the value of saving now to use it later.
For teenagers, show them how to set up a budget to pay for their smart phone, buy gas, or save for their education after high school. Another idea is to give your teenagers money to get school clothes money once per year so they can choose how to spend the funds. This way, they can see how much or how little they can buy, depending on their own personal spending decisions. It’s better to learn what things really cost now so to better set their financial priorities later in life.
Parent Magazine also offers guidance on money lessons to teach your children at every age.
Set and incentivize savings goals
Talk to your children about something that they would like to have, like a new phone or video game. Then help them come up with a plan to reach their savings goals. By breaking down their savings goal in small chunks based on their allowance or summer job, they can learn how to budget and then track their progress.
To keep them motivated, you can offer incentives for when they reach new levels with their savings goal.. It can be something small like an ice cream cone if they are younger, or you can offer to add a certain dollar amount to their savings once they have reached a percentage of their goal.
The B word
Let’s talk about the B word – budgeting. This may not be an entirely fun activity for you or your children, but it is so important that they learn when they are young how to create a plan to tell their money where to go.
You can start small: When they are young, teach your children or grandchildren the difference between a want and a need, an important lesson at any age. Then demonstrate how to set some money aside to pay for a want.
When they are older and if you feel comfortable with it, include your children in the decision-making process for the family’s budget.
Grocery shopping is an easy opportunity to show your children how to work within a food budget. You and your child can start by looking around at your pantry and refrigerator and make notes on what is needed. You can discuss with your child what your budget is for groceries and how long these supplies have to last until the next time you shop. It’s also a great time to reinforce the difference between a need and a want. They may want those potato chips, but you need to buy milk instead with those dollars.
If shopping online, then start looking together for your items on your shopping list. As you add it to your cart, have your child keep an eye on your growing total. Once you reach your budgeted dollar amount, it’s time to stop. If there are still items you need to purchase, you and your child can decide together on what to put back in order get the necessary items. Again, this is a great time to discuss a need vs. a want. Later, if they want a treat while checking out, they can spend their money for it. This will show them the true cost of non-budgeted items.
When paying your bills online, have your children watch so they can start to see the costs of running the home. They might start to understand why you are constantly reminding them to turn off the lights when there’s no one in a room!
You can also include your children in deciding on how to save for a major purchase, like a vacation. Show them what you expect the costs to be for expenses like travel, accommodations, food, admissions and tickets and mementos. Once your family determines the total cost for the trip, you can discuss were, as a family, to reduce expenses to have a great vacation. Show your children that even fun things have a cost, and you need to save for them.
Saving in a 529 plan
Let your children know that you are saving for their college and career training. You don’t need to share the dollar amount saved in your 529 account but set your expectations with them–that they will be continuing their education after high school.
Research from Institute for Higher Education Policy shows that when children know that there are college savings set aside for them, they are much more likely to expect to attend college. In fact, children with $1-$499 in college savings are three times more likely to attend college and four times more likely to graduate than those with no savings.
As you are teaching your children about saving, show how all members of your family are contributing to their future college and career training by following a budget, and setting aside funds for what the family values. Whether your child is learning to use the spend, save, and share jars, or are working a part-time job for their own spending money, encourage them to add their own funds to their Ohio 529 account. They will better understand how important their future college and career training is and how they can become a stakeholder in their own future, which might inspire them to work harder in saving and on their education.
529 plans are for whatever school comes after high school for your children and grandchildren. Funds in a 529 account can be used tax-free for qualified higher education expenses at four-year colleges or universities, two-year community colleges, trade or vocational schools, apprenticeships, or certificate programs. So, your children can go to a school where their interests, talents, and skills lie.
Since 1989, Ohio 529, CollegeAdvantage, has been helping families across the nation save for their children’s higher education. Ohio 529 covers qualified costs for your child’s college or career training. Learn, plan, and start with as little as $25 at CollegeAdvantage.com.
