Spending

Conversation Starters on Spending

• What do you like to spend your money on?
• Is it good to spend all your money? Why or why not?
• What does it mean to “spend wisely?”
• Can you spend money you don’t have?
• Do you plan what you’re going to spend your money on?
• Are there some things you only buy on sale?
• Could you have fun if you spent 10% less and put that money in a savings account?
• If you had a lot of money and could spend it on anything you wanted, what would you buy? Why? How would that make you feel?

Conversation Tips on Spending

• Talk to your kids about how spending is okay (and fun!) as long as they balance it with saving and sharing.
• Incorporate your own family values and philosophies into your conversations on spending, saving and sharing.
• Have your kids share their dreams and goals and talk about how they can achieve them by spending and saving wisely.
• Encourage your kids to think of ways they can make good choices when it comes to spending their money.
• Have your kids keep track of where they spend every dollar for a month. They might be surprised to see where it all goes!
• Ask your kids to prioritize their spending. Share with them how you prioritize your spending.
• Show your kids how you make good spending choices by using coupons, buying things on sale, and making a list of items you need before you shop to avoid making impulse buys.
• Encourage your kids to wait a day before buying things on impulse so they can decide if this is something they really want.

Saving

Conversation Starters on Saving

• What does it mean to save?
• Is saving a habit like looking both ways to cross the street? Should it be?
• Can you save things other than money?
• What is a “rainy day” or “emergency” fund? Why is it important to have one?
• Why did Albert Einstein call “compound interest” the 8th wonder of the world?

Conversation Tips on Saving

• Teach your kids that saving is like a habit. This will help them to develop a lifelong skill that will help them to avoid the accumulation of unnecessary debt in the future.
• Explain to your high school-age kids that:
  • According to the Jump$tart Coalition, 45% of college students are in credit card debt with the average balance being more than $3,000.
  • According to college administrators, they lose more students to credit card debt than academic failure.
  • Credit card debt should not be used to sustain a lifestyle. Most of us cannot afford to buy everything we want, so instead we need to make decisions on priorities and set goals and then save for it.
• Encourage your kids to talk about their goals and then encourage them to save for them. This will help them reach their goals and feel the sense of accomplishment once they’ve reached them. Also, it will encourage them to continue setting goals throughout their life.
• Show your kids that by saving just $5 a week they can accumulate $260 after only one year. This is a large amount of money for kids and may influence them to save for big items and their long-term goals. Be sure to show your kids what they can buy with $260 – it will help them relate to the amount.
  • Use a calendar to write down the dates and amounts of deposits into a savings account. Keep a running total of the amount, kind of like a passbook. Hang the calendar in your child’s room and talk about savings goals often.
  • Show your kids what would it take to become a millionaire.
• Talk about how depositing and saving money at a bank or credit union will earn interest (additional money) for them over time. Explain that the bank or credit union will pay them interest so that it can use their money in other ways (tell them not to worry, they’ll be able to get their money out when they need it!). Explain that they won’t earn interest on the money they save at home.
• Explain that when they open a savings account it’s a good idea to check how much interest they’ll earn (the interest rate) on their money because it varies at different places.
• Discuss that as they save their money over time, they’ll earn even more money because they’ll earn interest on the interest! This is called compounding and it is a very powerful tool to help them achieve their dreams and meet their goals.
  • Show your kids that the earlier they get started saving, the less they actually have to put away to reach their goals because of compounding interest.
• Talk about having an emergency fund. Ask them how much they think they would need for things relevant in their lives.
• For your older kids, explain that direct deposit is when their paycheck (or a portion of it) is automatically deposited into a savings or checking account. This can be a great convenience because they won’t have to go to the bank or credit union to deposit or cash your check, and it is a great tool to help them save automatically.

Sharing

Conversation Starters on Sharing

• What does it mean to share?
• If you found $100 and had to share it, who would you give it to? Why?
• Can you share more than just money? What else can you share?
• How does it feel when you share things with others?
• What are values?
• Who and what influences your values? Family, friends, society?
• Can you do well by doing good?

Conversation Tips on Sharing

• Discuss opportunities to share money with organizations that are consistent with your family's values and philosophies.
• Discuss what values are and how they are different for everybody based on their family and experiences.
• Explore opportunities where your child can share things within your community, be it their time, by volunteering, or by sharing some of their own money for school fundraisers, non-profits, community needs or religious affiliations.

Additional Resources:

Financial Literacy

National Endowment for Financial Education
JumpStart Coalition for Personal Financial Literacy
National Association of Federal Credit Unions
Moonjar
National Credit Union Administration

Credit Scores and Credit Usage

www.annualcreditreport.com
www.myFICO.com

Investor Education

National Association of Securities Dealers

Saving for College and Financial Aid

www.finaid.org

Savings Bond Interest Rates

www.treasurydirect.gov

Financial Calculators

TopLine Investment Services

Books

The Millionaire Next Door
By Thomas Stanley and William Danko
Practical information on how other millionaires made their money.

The Richest Man in Babylon
By George S. Clason
Common sense ideas on the concept of paying yourself first.

A Chair for my Mother
By Vera B. Williams
Family picture book that shares a story about saving.

Content on this page may contain information from, and is used with permission by, the National Endowment for Financial Education, the National Association of Federal Credit Unions, Moonjar, and the JumpStart Coalition for Personal Financial Literacy.

Links to additional resources are provided for information purposes only and are not endorsed by TopLine Federal Credit Union.

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