Hey there! It's Talk About Money Tuesday, my favorite day of the week!๐ค
Summer is often a season of big plans and aspirations. I've got a few goals of my own this summer โ mastering a buttery, flaky pie crust from scratch and finally organizing my basement storage space are at the top of the list.
Kids may not have culinary or decluttering goals on their summer to-do list, but maybe they're looking forward to learning a new skill, taking a trip, buying something special, or redecorating their room.
Whatever the goal, it usually has a financial side. Summer gives parents a natural opportunity to help kids understand that connection.
When young people learn how to identify a goal, estimate what it will cost, create a plan, and then track their progress, they're forming habits that will serve them for a lifetime.
Money Stat
70%
Many people assume that saving money, a common financial goal, is mostly about self-control. But in reality, people are more likely to save when they have a specific goal in mind.
Yet, according to a NerdWallet survey, 70% of Americans don't have savings goals for this year.
More importantly, the survey suggests that many people never make the leap from a general desire to save to a specific, actionable plan. Setting a goal is an important first step but it's not enough to drive behavior on its own.
That's an important lesson for young people, because having a clear purpose shifts saving from something they're working toward, not just something they're giving up.
Smart Money Quiz
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Which goal is most likely to help youth build a saving habit this summer?
A. Save as much money as possible
B. Cut back on spending
C. Save $60 for an amusement park ticket by saving $10 a week for six weeks
D. Be more responsible with money
(The answer is at the end of this newsletter.)
Get in the Zone
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Money skill: How to set a SMART savings goal
Why it matters: A SMART savings goal is one that is Specific, Measurable, Achievable, Relevant, and Time-bound. It helps turn a general idea, like "I want a new video game," into a clear plan such as, "I'll save $60 by August 15 by saving $10 a week."
SMART goals teach kids how to break big wants into realistic steps, which is an essential life skill for managing money effectively.
Try this: Turn a wish into a SMART goal together. Help your child choose something they want and create a plan around it by identifying the total cost, when they'd like to buy it, and how much they'll need to save each week or month to reach that goal. The more specific the plan, the easier it is to follow.
Instead of focusing on the final amount, help your child celebrate their progress along the way. Reaching the one-third, two-third, and finish-line milestones helps kids stay motivated. It's also a great opportunity to reinforce that big goals (for kids and adults!) are achieved one step at a time.
Money Talks
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Young people today are growing up in a world where it's easier than ever to buy what they want immediately and pay for them later, rather than wait until they can afford it. That's because Klarna, Affirm, Afterpay, and other popular "Buy Now, Pay Later" services have become a common way for consumers to split purchases into smaller payments.
But installment payments can encourage instant gratification, which is the opposite of the delayed gratification taught by setting financial goals.
Here are two ways to jumpstart a conversation with your kids about that contrast:
1๏ธโฃ If your child has a summer savings goal, create a visual savings tracker together. Watching progress build over time reinforces the link between patience and achievement.
2๏ธโฃ Discuss the phrase "future me pays for present me" with teens. Ask them what else they might want (or need) to buy later with the money they're spending now.
Over time, these talks can help young people understand that financial decisions are really about tradeoffs between what they want now and what they want later.
Loose Change
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๐ฎ As the standard price of blockbuster video games hits the $80 mark, nearly two-thirds of gamers said they no longer buy games at full price.
๐ Rising prices on everyday items have made it harder for Americans to save money. April's personal savings rate was the lowest since June 2022.
๐ฅง Does it really take butter and shortening to make a top-tier pie crust? I'll report back at the end of the summer. ๐
Thanks for reading! If you want to read some of my past newsletters, click here. And if this newsletter was forwarded to you, please subscribe โhereโ.
'Til next time,
Audrey
โFounder &
Certified Financial Education Instructorโ
The FinLit Zone
ANSWERโ
โC. Save $60 for an amusement park ticket by saving $10 a week for six weeks. Specific goals include a target amount, a deadline, and a purpose. These details make it easier to track progress and stay motivated.
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