(BPT) - By Mary Hines Droesch, Head of Consumer, Small Business & Wealth Management Banking and Lending Products at Bank of America
As a kid, there's nothing quite like tearing open holiday gift boxes to find the latest gadgets, games and toys. But there's another gift, less often discussed, that can benefit your child all the way into adulthood - financial literacy.
Bank of America found that only 47% of college students feel financially prepared for the real world. Why not take the opportunity to start preparing them at a young age by sharing financial lessons with your kids throughout the holiday season? After all, winter festivities present many teachable moments to help them become more financially savvy rather than getting caught up in the temptation to overspend.
Whether it's budgeting for holiday gifts for loved ones, baking holiday cookies or taking time to give back to a local organization - this season provides plenty of opportunities to help your children develop the skills to manage money with confidence. Here are a few ways you can wrap up the gift of financial literacy for your kids this holiday season:
- Incorporate financial lessons into holiday festivities. With all of the festive activities on your to-do list, there are many natural opportunities to start money conversations with your children. For example, consider giving your child a set budget to plan a holiday activity for the family - whether it's decorating gingerbread houses or having a hot chocolate and movie night. By setting a spending limit, you encourage them to think through costs and make decisions, providing valuable experience in budgeting, planning and responsibility.
- Prepare for cash gifts by opening a bank account. If your child opens an envelope to find a check or cash from relatives, it can be a wonderful opportunity to teach them how to manage those funds. Opening a bank account for your child provides a place for you to deposit the funds, to keep track of balances, and help them avoid the temptation to spend immediately. For example, SafeBalance Banking® for Family Banking is a convenient, digital bank account that gives parents the tools and resources needed to help their children practice healthy financial habits and learn to responsibly manage their money. Parents also have access to Better Money Habits educational content to help facilitate conversations with their children about financial literacy. A bank account gives your child a sense of ownership and accountability over money, setting the foundation for future financial independence.
- Give back to the community. Beyond putting gift money into a bank account, you can also encourage your child to allocate a portion of their funds toward a cause they care about. This can be a powerful lesson in budgeting and prioritizing, as well as the value of giving back. Involve your kid in the decision-making process so they're empowered to be more compassionate and mindful with their finances. Alternatively, volunteering time as a family can also serve as a reminder that the holidays are just as much about giving as receiving!
- Practice spending with their own debit card. If your child has already built a strong foundation of responsible financial habits - consider giving your child their first debit card so they can purchase gifts for their family members. Bank of America's SafeBalance Banking® for Family Banking not only offers an option to provide your child with a debit card, but also allows parents to easily monitor and set spending limits on the child's card. Helping your child navigate their first debit card provides them with hands-on experience to manage money and practice responsible spending. They will also feel more excited having bought their family members' presents on their own!
Although the gift of financial literacy might not seem as 'shiny' as a new gaming console or this season's trendiest water bottle, finding teachable money moments with your kids this holiday season is a worthwhile investment in their future success and independence.
