Now that your kids are getting to know the difference between wants and needs, it’s time to help them understand that wants can require different actions and non-actions. Sometimes setting a goal for a want can mean giving up some things in the sort-term. Big wants can mean some upfront sacrifice to get to a longer-term want. How can you encourage your kids to save up for the fun things they want? Or to even persuade them to begin to think about saving money for future needs? If your kids are looking to go to college, it’s a good idea to encourage them to “put aside” a little bit of money each time they receive even a small windfall.
On Day 5 of Financial Literacy Month, it’s easy to begin teaching kids to BE A GOALIE! Learning to manage money for both wants and needs means setting goals for saving. To get across the concept, use this simple saying: “Saving requires waiting.”
The most important part of money management, of course, is making sure our basic needs are covered—starting with food and housing. Any extra money beyond that can go toward wants, but we can’t have everything we want at once. Adults often do this kind of planning without even realizing it, such as waiting to buy tickets to a concert until after we’ve paid the rent or mortgage, but kids don’t have this level of experience yet and often need some guidance. Many kids “want it all” and by setting up some goals, you can help kids make choices— “I want this, yes, but I want THAT even more.”
You might need to make specific suggestions to your kids. You could propose that an older child could give up that after-school stop for fast food for a period of time in order to buy a pass to a water park. You could work together to determine just how many of those $3.00 snacks it will take to purchase one $45 water park ticket, for example. You can encourage younger kids to put away pocket change to save up for a desired toy or other small purchase.
One easy way to get started with this type of goal-setting is to try this activity from FUTURES: Financially Literate Kids for a Financially Literate Society.™ This activity will help your kids or students to learn how to begin to set goals and save money. It’s as easy as one, two, three.
1. Instruct kids to create a list, draw pictures, grab screen shots, or find magazine images of several things they’d like to save for. Kids will enjoy this part, and can create a sort of “want-list” mood board that can serve as a good visual reminder of bigger goals when they are faced with making smaller financial choices like downloading a song or stopping for a snack after school.
2. Older kids can then rank the images of their wants in order of importance or from smaller, easy-to-achieve purchase goals to the much larger, longer-term ones. Sometimes, kids recognize that the smaller goals are much less important and they choose to stay focused on the bigger goal. For other kids, smaller goals give them a sense of accomplishment and progress.
3. Finally, it is time for kids to consider HOW they will fund these wants. Have kids write a second list describing ways they could potentially save/get enough money to fund their wants. Some ways might include an allowance, gifts from extended family, or even a part-time job like pet-sitting or plant-watering. Help them brainstorm ideas that work in your home or classroom setting. Can they earn money doing extra activities? Can they offer out their services to neighbors?
Ask kids:
Do you think it’s easier to save for short- or long-term goals? Why?
What big purchase or purchases would you like to make?
How can you get there?
What are you willing to give up to reach your goal?
How important is this goal to you?
How can we help you?
How long do you think it will take you?
Visit Us Every Day in April
Tomorrow, visit the site again as we continue Financial Literacy Month with a weekend book recommendation. We’ll discuss a story about a young girl who does something special for her mom—and learns about saving money along the way.
Please click (here?/below?) for more information about FUTURES: Financially Literate Kids for a Financially Literate Society™, a new and exciting financial literacy program for students in kindergarten through eighth grade. You can download any of the 29 sections of the program, too!