5 Steps to Build Generational Wealth...with your 5-year-old

Your 5-year-old is developing money habits. Don’t believe us? Check out this study from the University of Michigan...or, take our word for it, and start putting your money where your mouth is (literally) with your little one.

  • Start Here: with your friendly neighborhood Credit Union. For just $5, SPC Members can open a Kids’ Club Savings Account for children ages 3-12. Kids’ Club Members earn Kids’ Club bucks every time they make a deposit and attend Kids’ Club events. Then, just like credit card rewards points, they can redeem their brightly-colored “bucks” towards exclusive prizes. And, voi-lah: saving becomes just as fun as spending.

  • What’s Next? Depositing money generally requires having money to deposit, which, for a 5-year-old, can be a real obstacle to progress. Luckily, they’ve got you. Invest in your little one’s financial future by throwing them a bone--and maybe a dollar, here and there, for completing household chores, demonstrating good behavior, walking the dog, cleaning the hamster cage...You get it. The point is, they’ll need a little help starting out, and you’re their #1 resource!

  • Then What? As the dollars begin to add up, the ole’ “If You Give A Mouse a Cookie” syndrome is liable to set in. They’ll see you spending money and they’ll want to spend theirs, too. Before they flush their $10 down the drain at the school snack shack, empower them to think twice about how they spend and save by coaching them through the value of money using real-life examples, like a fast food pit-stop, or a gas station fill-up.

  • And then? Once you’ve effectively helped your savvy saver connect the dots between the cost of a kiddie meal and the sum of their hard-earned savings, it’s time to put a goal in place. Have a conversation with your child about an adventure they’d like to take, a special toy they’d like to purchase, or even a charitable cause they’d like to contribute to. Help them figure out the cost of their savings goal, then work together on a plan to make it happen. For example, if zoo admission costs $25, they might save $2.50 every week for 10 weeks. This timeline might seem like forever in the moment, but the feeling of success your child is bound to get at the end will be priceless!

  • The grand finale...But it’s really just the beginning! Once they’ve completed their first major saving/spending exercise, it’s time to debrief: What parts were hard? What parts were easy? How did you feel once you reached your goal? What’s next? A bigger savings goal? A new income idea? Investments, even? In the words of Buzz Lightyear...To infinity, and beyond! (In the meantime, click here to find financial fun & games to keep their skills sharp!)

One final thought: Making money a part of the conversations you have with your kiddos isn’t just a nice thing to do--it’s essential. Andy Hill, a contributing writer for Forbes, puts it this way: “By starting early, creating smart investing habits, and teaching our children how to build wealth for themselves, our kids will gain the confidence and skills needed to strengthen their family tree for generations to come.”

Meghan Godwin