When you have kids, you know that there are times in their lives that they end up with an extra windfall. Birthdays, graduations and holidays all tend to stuff the kids’ piggy banks. It doesn’t matter if you have a toddler or teenager–they get excited about all this money, as they should! But it can also mean they don’t know what to do with their windfall. As a parent or guardian, it’s our job to help them make good decisions and that includes financial.
So, if you’re in a situation to advise your child what to do with an extra windfall, check out these 5 helpful ideas:
- Save It
Depending on your child, this may be a very difficult idea to wrap their head around. The key here is to help them understand what or why they are saving this money. For younger kids, a visual could be helpful to use as a saving tool or older kids might like a chart they can follow to see how far they’ve come. Although the least fun of the ideas, teaching your kids to save money will be the most beneficial.
- Spend It
It is their money so let them spend it if they want! This can be a great lesson for them to learn how to spend their money responsibly or if you want to teach them the hard way, irresponsibly. When kids spend their own money they realize that everything has a price and you want to be selective of what you spend your money on. When it’s gone it’s gone!
- Budget the Money
Do your kids even know what a budget is? Now that they have extra money, it’s the perfect time to help them plan what they want to do with their money.
Find helpful tips to teach kids how to budget and a printable to use as your kids learn to spend, save, and share their money in a smart way.
- Invest the Windfall
Has your kid ever asked you for money to buy a jewelry set so they can make and sell friendship bracelets? Or when they wanted to set up a lemonade stand and needed the finances for cups and lemons? If they have a passion and want to use their money to invest it into a bigger project, the extra windfall is a great startup idea.
- Donate or Gift
Kids can be very kindhearted and we should encourage them to be compassionate with their money as well. Teach them to have a charitable nature by helping them choose how much they want to donate, where they want to donate (find a cause that they love) and show them the impact their donation will have.
When kids get extra money in their pockets they may surprise you when they decide what they want to do with it! As a parent we hope to guide them without taking away the freedom they feel with the money they have. So try these tips to help kids decide what to do with an extra windfall.
“You’ve got to tell your money what to do or it will leave”. –Dave Ramsey