Every June to August, millions of school kids earn their first paychecks with summer jobs.
Having some spending money in your pocket can be exhilarating – but it would be wise to not spend it all. So, summer can also be an opportunity to start learning good money habits.
Effectively managing money is an important life skill that should begin at a young age – yet teenagers may be unsure on where and how to begin. Getting comfortable with saving, spending and even donating money from a young age can increase confidence when it comes time to make larger purchases later in life, like paying for college or buying that first car.
Here are a few things can help kids and teens save their money during summer vacation:
Don’t look for handouts from mom and dad: It is important to teach kids the significance of earning their own money. For kids, doing simple chores around the house can yield a weekly allowance; for teens, working at a summer job will bring in a consistent paycheck. Having earnings of their own will teach teens and kids to learn the value of their work and how to use their rewards.
Set a summer goal: At first, kids may not see the importance of saving their money. However, setting a savings goal for the summer is a fun way to maintain motivation while parents teach their kids ways to put their money aside. Have the child set a goal for something they wish to buy by the end of the summer (within budget) and see if they can reach it with their new saving skills.
Create a place for saving: Having a place where kids can physically see where their money is located will help maintain organization and inspiration for future spending. Younger children are used to keeping their bills in a piggy bank, but older teens may look to putting their money in a savings account.
Track their spending: If the children receive an allowance, have them write out how much they receive and what they wish to spend on, so they are able to see how much money is remaining. For teens and parents, having a mobile banking app allows for easy access to monitor spending from their phone.
Encourage kids to talk to their parents about money: A Greenlight study in 2021 found that 74% of teens do not feel confident about their financial literacy. By allowing families to have open conversations about their children’s finances will give them more insight on mistakes they may need to fix and other financial recommendations for later transactions.
Rollstone Bank & Trust, located in Fitchburg, MA, has partnered with Banzai to offer free, online financial education to help kids, teens and adults take control of their finances. The program consists of multiple courses that feature lifelike simulations for various age groups. Articles, calculators and coaches are available for all ages, youth through adult.
It’s never too soon to start teaching kids about money. This summer could be a great springboard for a successful financial future for your children.
Martin F. Connors, Jr. President & CEO of Rollstone Bank & Trust