In today’s world, purchases involve plastic more than paper. It’s more challenging for kids to understand the concept of money. Having discussions about money can help your kids understand the importance of financial planning. As each year comes to a close, consider making a family plan for how you will manage your money for the year ahead. Here are some tips from our family.
Discuss how to earn money
First, we discuss ways that we can earn money. Our kids are aware of how my husband and I make money through our jobs. We ask them to think about ways that they can earn. When they were younger, we discussed how completing tasks “earned” them money to buy little things like a lollypop or a small toy. For next year, my son has decided he’ll help shovel snow this winter to earn some extra cash. My daughter is taking a babysitting course so she can earn too.
Create a spending plan
Next, we discuss how our money contributes to the things we need first and the things we want second. We create two lists to review what these things are for the new year. My son wants a new computer and my daughter wants a trampoline. We review our needs like paying for food, housing and clothing. Try this with your kids. Look at the list and discuss what they would need to save to earn the things they want.
Create a savings plan
Each year, we discuss the things we want to save for. For example, the kids want to go to Disney World next year, we created a financial goal for each of them to contribute. They track their contributions in a spreadsheet on my husband’s computer. For younger kids, you can create savings contribution jars like the ones below. You might pay them in coins for doing jobs like cleaning their room or raking some leaves.
Discuss longer term goals
Toward the end of elementary school, we began discussions about saving for college. Now that they are 12 and 14, we talk about saving for things like buying a car, home and even retirement planning.
We’ve told our kids how using a 529 plan is part of our overall college savings plan. A great option is the MEFA U.Fund College Investing Plan. It’s the Massachusetts 529 college savings plan manage by Fidelity. The MEFA website provides great information about saving for college.
Create a giving plan
My family also creates a giving plan each year. We like to give to our local animal shelter each month and adopt a family for the holidays. We start saving at the beginning of each year so that we have plenty to contribute later in the year. Ask your kids about how they might like to help other people in need. Little kids sometimes have the best ideas.
What tips do you have for a family financial plan?
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Since 2015 my husband and I have raised money monthly for an emergency account where it has already helped us a lot. It’s worth doing. In addition, we always discuss a possible purchase if it is important or not. I think the conversation is fundamental to the family financial plan.
These are great tips to making an awesome family financial plan. Totally love this post.
These are great tips. It is really important that we focus on a financial plan, especially with the Holidays coming up.
Great tips, we are working on a new budget for the new year and I am going to make sure I include a spending plan.
These are really awesome tips! I could definitely use these tips!
I love that you including making a spending plan. Spending is a part of life so it’s very important to have a plan for it.
These are some great tips. I need to take this into consideration and plan out my finances.
I love your ideas! We’ve been working hard to budget better and seem to hopefully to be on the right track.
Wow this a really solid plan for saving in small increments. I will try it next year instead of my annual savings plan.
I like the spend, save, give jars. That would be a really great idea for my younger kids.
We have MEFA accounts for our kids. It gives me peace of mind for the future.
Discussing your goals and setting a plan is so important. It is smart to have the whole family on the same page.
These are awesome ways to go about establishing a financial plan. Being able to save and work towards long-term goals is the best!
These are great tips. It’s a good idea to get the whole family involved.
Thank you. We enjoy it.
I love how you budget money for helping a family in need over the holidays! That is an awesome idea. We have a pretty good financial plan in place but we need to start adding some savings in for helping others.
We find it so rewarding.
A college saving plan sounds amazing! I have to look into this. All three of my kids are young enough that there’s still time for me to get this rolling.
Never too soon to get started!
These are great tips. It’s key to have the entire family get in on the planning and to ensure that you know exactly what your long term goals are.
I like that our kids have a broader picture of where our money goes.
These are absolutely wonderful tips. I am very much into saving. I have all sorts of different accounts for different things just so that I make sure I have the money I need.
Sounds like you are really on track. Nice job!