Effective ways to teach your child about saving
Average American lost an estimated $1,819 in 2022 due to financial illiteracy
Gregg Murset is a certified financial planner and the CEO of BusyKid, an app that helps parents introduce the concept of budgeting to their children through their allowance.
“And we do this magic where we literally split up the money, some in saving and investing where they can learn how to invest. Sharing a little bit goes into there, where they can learn philanthropy and donate to causes that they like,” Murset said. “And then lastly spend, where they can go in and literally load the money onto their own card and go out and spend like the rest of us.”
Murset said since so much money management is online and kids are comfortable with technology, it is a natural fit to use technology like apps and computers to teach young ones about money management.
He also urged parents to be says be more transparent about household finances.
“And this is not like, ‘all right, sit down, let’s have a big, long lesson,’” he explained. “This is when you’re sitting on the couch with them and you get an email about your electric bill, like, tell her to come over. ‘Hey, look at this. This is what it cost to cool our house in Phoenix in August, right?’ $500 it blows their mind, and that kid will start to understand money in a very natural way.”
Murset said start early to help develop good habits, echoing a 2013 study by Cambridge University that found children have already developed financial behaviors by age seven.
Murset added teaching kids the value of saving and not burning through money the moment they get an allowance is a very valuable life lesson.
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