The following is a blog from our guest contributor, Chris Panek of Financial Adventure, LLC*.

Start a Financial Adventure With Your Kids!

Did you know that by age 3, kids already understand what money is and how it can be exchanged for items? They are also starting to understand the concepts of saving and spending money.

You want your children to be savvy when it comes to money, but how can you ensure your child has the appropriate skills to save money and prepare them for their future?

Here are some ideas for you to get started:

• Let them earn money or have an allowance - it is best if they have their own “tangible” money to work with.
• Talk about how you receive money. You don’t have to tell them exactly how much money you make, just let them know you have to earn money and that money is finite - once they spend it, it’s gone and they will need to earn more. How do you save, spend and share your money?
• Start them off early with a container system - use separate (clear) containers for saving, spending and sharing their money. Help them to divide their money according to their wishes. Talk about “wants” vs “needs”. Have them list a few examples of each.

• Count the money in the containers periodically so they know how much money they have in each container. This is also a great way for kids to learn each of the coins and dollars and how to count them.

• Have kids make a list of some of their wants and prioritize them. Will they save for one or more items at a time? If saving for multiple items at a time you may want to add additional containers and label each container.
• Help them set a savings goal. Don’t let the goal be so expensive it would take months to accomplish - you want them to see the results quickly when they are younger. Make a goal chart with pictures of what they are saving for to help them visualize their progress in addition of seeing the money in their container.

• Set up a matching program to help save for bigger and more expensive items, or even set up a rewards system when they reach certain savings goals. Talk about how they can earn interest when they put money into a savings account at a bank. Find a bank that offers a program for kids to have fun and learn more about banking.

• Delayed gratification is a hard concept for children to learn. It is extremely important for your kids to learn they may have to wait to get something they really want. They may need to save for their purchase, but it will be worth the wait. Wants may change with time and you may find they decide to save for something else while they are saving for a particular goal.
• Discuss how you are saving your money. Do you have a savings goal as well? How close are you to reaching it? Set up a savings goal chart for your goal and let your children see how you are saving. Retirement is a great long term savings goal you can discuss with children and how important it is to you.
• Let them spend their money. If they want to spend their money on something foolish, this is the time to let them do it while the financial loss is small. Many great life lessons are learned and remembered from a poor decision.
• Set an example by using cash in front of them so they see you actually spending, saving and sharing your money. Talk to them about how you look for deals or use coupons to save money.

In summary, try to keep your children’s money lessons tangible whenever possible. Let them “handle” the money by making payments at the sales register, depositing money at the bank or counting their containers. Children will follow your example - don’t be afraid to talk about money with them. Help them by preparing a successful financial foundation for their adult lives.

Chris Panek, Chief Adventure Creator
Financial Adventure, LLC

*The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Plaza Park Bank. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them