The beauty of teaching kids to save money is that they are eager to learn. Because parents are a great influence on their kids, when we feed them with the right skills about money, they learn to be great savers. Kids love learning new things while they are young, so teaching them to save is simple, and it is a great experience for parents and kids both. The most important thing to remember is that saving should be made fun. Below are some great ways to teach your kids to save money no matter how old or young they are.
Using Envelopes and Jars
Most parents are familiar with the system of envelope budgeting for their own money, but this works for kids as well. On jars or envelopes, have your kids draw a picture of something they want. Help your children understand that many times it takes a little longer to save for some things versus others. For example, you can have jar for short-term savings with a picture of a toy your child wants, and on the long-term savings jar, he or she might have a picture of a trip to Disneyworld. Teach your kids to save for both long and short-term goals, and keep an additional jar marked for everyday items.
Savings Goal Chart
When you know what your child wants to save money for, figure out how long it will take in weeks to save that money and make a chart. Represent each week on the chart with a box that your child can place a sticker on when he or she saves money earned from his or her allowance that week. For example, your child can have a chart with a picture of some Lego’s on it. Every time he or she receives money or allowance that is put towards saving for the toy, he or she can add a sticker on the square. As your child gets closer to the goal, he or she can see how close he or she is to getting their toy.
Rewards for Saving
Some parents help their children learn about money by rewarding them for saving his or her own money. Much like a bank or credit union might offer t-shirts and prizes, you can do the same for your kids. For example, if your child doesn’t spend any of his or her money over a specific length of time, give him or her a small reward. Make the prize better the longer your child saves. Use things like stickers, an extra hour staying up at night on the weekend, one hour of extra video game playing time or whatever might motivate your child to save.
Matching The Contribution
A great way to encourage kids to save money is with a “savings match” program at home. This also gives them a look at the benefits of a company matching retirement savings program, like the 401k, that they might take advantage of later in life. You might have a normal amount of money your child puts into his or her savings account every week from his or her allowance, but anything over that amount you can match! Your child will be inspired to put away more so that he or she can see his or her savings growing faster with your matching money.
Teaching kids to save is an important way to prepare them for a secure future. By being a good example, you can help them learn faster.
- License: Creative Commons image source
Jesse Leimgruber is blog writer for www.SaveUp.com. Jesse earned a perfect 800 on the Math S.A.T. and is currently studying Computer Science at Stanford University.