Homegrown Money Smarts

Podcast Transcription 

Money Talk is a podcast brought to you by PFCU where we will share tips and tricks and talk to the experts on all things finance related. Join us as we cover everything from credit and loans to cyber security and careers. No matter where you are in life, PFCU is here for you.

Hey everyone, welcome to another episode of PFCU’s Money Talk Podcast, as always, I’m your host, Maddy. We talk about budgeting a lot but you might be looking for a way to teach your kids more about money management whether they’re younger or teenagers. Giving your kids the practical skills to handle money at an early age will benefit them as they get older. Financial literacy doesn’t have to be dull. By involving your children in everyday decisions and hands-on activities, you can turn learning about money into something fun and meaningful. So, in this episode I’m going to share some practical ways to make financial conversations and habits more family friendly, empowering everyone in your household.

So, the first way to get your kids involved is a grocery store challenge. Either give your kids the grocery list or let them lead the way in creating a grocery list. Give them a budget that they need to try to stay within and allow them to lead the way when shopping with the goal of staying in that budget. Encourage them to compare prices, look for sales and make smart choices.

When it’s all done, discuss how they think it went. Did they stay in the budget? Was it difficult to stay within the budget? Did they get everything that was needed? What might they do differently next time? And did anything factor into their decisions? Such as things that were needed versus wanted, sales that were happening, priorities, anything like that.

Now, the grocery store challenge might be a little more suited for older kids or teens. What you can do for elementary aged kids is give them some money to be in charge of while shopping- as much as you are comfortable with. You can give them guidelines on how to spend the money such as snacks for school or lunch items, something for dinner or you can tell them that money is theirs to spend how they want while explaining opportunity cost. If they spend their money on one thing, they can’t spend it on another and explaining things they may need vs what they want.

For both of these examples, make sure you’re explaining things along the way, let them hand the money over, if you’re using a debit or credit card, talk to them about how those payment methods work. And that swiping the card is not “free” money.

The next thing you can do is set a family savings goal or you can each sit down and share your own personal goals or you can do both! Some examples of family savings goals could be a family vacation, a new gadget for the household, a gaming system that everyone can enjoy, a new piece of furniture or just a night out for family fun. These might be things that you’re already saving for but don’t be afraid to bring your kids into the loop. Keep them updated on progress and talk to them about how your decisions are affecting that progress as you are trying to save and how they can develop a SMART goal. If you don’t know, SMART stands for specific, measurable, achievable, relevant and time bound. You do not want to make a vague goal with no deadline, no specific amount of money to reach and you want it to be reasonable. You don’t want to set a goal that’s going to be so difficult to reach that you’re never going to get there by the time that you want to get there. You want to make it doable so it can keep you motivated. So, you can get excited about saving your money.

Now this next one might be intimidating but that’s getting your kids involved in the overall family budget. Gather income statements, bills, bank statements and whatever else you might need to budget. Review these documents as a family and if you already have a budget make adjustments to it, review it with your children. If you don’t already have a budget, create a budget with your kids. This activity will allow everyone to see the full financial picture and celebrate successes and address challenges and help with the understanding of limited income- that we can’t buy everything we want, as well as what needs are versus what our wants are, our priorities in spending and reaching our goals.

And to expand on needs and wants, it’s important for your kids to understand the difference between the two. If you feel like your kids don’t understand the difference here’s something simple you can do. Write down various items on cards or slips of paper. Things like groceries, toys, a new video game, a car, clothes, sports tickets, a house- anything you can think of!

And then as a family, categorize each of the items you wrote down as either a need (something that you have to have to live) or a want (something you would like to have but you can live without). Make sure to talk about the reasons behind each decision, especially if not everyone agrees or if there’s items that you’re kind of unsure about. This activity will help the entire family understand the difference between needs and wants in order to better prioritize spending and make informed decisions when creating your budget.

Make it fun and don’t be intimidated. Things can get complicated very quickly, especially when it comes to finances and you don’t have to be an expert on everything just to start the conversation with your family and getting them involved. This is truly a great way to set them up for success.

If questions come up, use your resources! PFCU has a ton of resources available from the podcast and videos to blogs and our financial coaches. We also have an awesome resource called Banzai. Elementary to high school ages and beyond can go through interactive courses and games, articles and calculators that are going to allow you to make financial decisions and manage a budget. Check it out on our website.

Thanks for listening everyone, see you next time!

Money Talk is a podcast brought to you by PFCU. PFCU offers many products and services to fit your needs. From our various loan and account options to our team of financial coaches to help you reach your goals. Make sure to take advantage of the many conveniences PFCU offers, such as the mobile app, mobile wallets, bill pay, and more. Visit our website at pfcu4me.com to learn more. PFCU is an equal housing lender and is federally insured by the NCUA.