Many of us may be setting our own financial New Year’s resolution. You could be focused on sticking with your budget or starting an emergency fund. Whatever your goal, you can also use this time to help your child or grandchild set their own financial resolution. Doing so will not only teach them important financial lessons, it will also improve their ability to set and reach goals. Plus they might get a fun treat in the process!
Start by having them make a list of things they want. For example, they might want to buy a new video game or even a car. Or perhaps they enjoy going to the local amusement park and want to save for a season pass.
After they brainstorm, have them prioritize the things they want most. Perhaps they circle one or two things to work for this year. You could even take out a calendar and have them select one thing to save for each month or each season.
Determine a timeline for saving and purchasing the desired items. If your child wants to save for a season pass, have them set a summer deadline, perhaps June 1. If they are hoping for a smaller item, such as a toy, their deadline could be earlier in the year. Larger items might require the whole year to save.
Calculate how much they need to save each day, week, or month to meet their deadline. Older children can probably work with monthly goals, while younger children will likely need shorter goals in order to stay on track. It may be helpful to record their weekly savings goals on a calendar that you keep on the fridge or in their bedroom. Additionally, it may be motivating to print out a picture of their desired item or activity. Posting a picture in a prominent place will keep their eyes on the prize.
Select a money-earning strategy. Older kids might start applying for jobs while younger kids might take on new choirs or help neighbors with yard work. Whatever the means, help them figure out how much they will have to work each week in order to meet their savings goals.
Find a savings-tracking system. Perhaps your child puts their money in a jar in the kitchen and counts out how much they earned each week. Some might be ready to open their first bank account and put their savings in there. No matter the mechanism, ensure they are able to keep track of their savings as they work towards their goal. You might even reward them with a small prize or special dinner for reaching their weekly or monthly goals. Little rewards could help keep them on track.