Teaching children how to save from a young age could help set them up for life. When you are a kid you think money grows on trees, or at least your parents have an endless supply. Learning good money habits at a young age can help build a foundation for responsible financial decision-making in the future. If you have children, consider these tips to help teach your young ones the importance of money management, especially saving.
- Provide an allowance. One of the best ways to teach proper money management is by giving your child an allowance. The occurrence and amount of the allowance matter less than the act of handing over money for the child to control. Use the allowance to help instill in your child that when they put in the work, money is provided for their good work. Teaching money basics is simpler when the child has real money to learn from and interact with.
- Encourage children to make goals. One way to teach young children financial responsibility, particularly saving, is by imparting a goal-setting habit. Make a savings goal chart and use stickers or drawings to visually demonstrate the amount of money saved each week. If your child wants to save up for a specific item like a new video game, a bike, or maybe even money to spend on an upcoming family trip, consider adding a picture representing what he or she wants to purchase with the saved funds as a motivation. Being able to visually see your goal and see your progress will encourage them to save more to reach their goals.
- Open a savings account. Having their own independent account may encourage kids to save more money, and it will make them feel more responsible. Head to 1st Financial Federal Credit Union with your kid and open a CUbby account. In the CUbby Kids Club, children 12 and under have fun while learning how to save money through a reward-based savings club. A monthly trip to the credit union where your child personally deposits their new savings and receives a balance slip is a positive reinforcement that they are growing their account. Additionally, this repetition will help solidify the importance of stashing away money and spark a lifetime of financial smarts.
- Teach the power of patience. Sometimes even as adults, we need to be reminded we must wait to buy the things that we want. I know this a struggle for me, but we always want the best and to be better for our kids. Set an example and practice holding off on buying something by making a savings plan that you share with the family. Explain to your children why waiting a little longer for the things you want may help you save and stay within your financial means.
- Encourage giving. In addition to saving, you may want to teach your children the importance of giving to others. Suggest giving a certain amount of their allowance to a local, not for profit of their choice or to use for friends or family member gifts. Encouraging them to save so they can experience the joy of gifting someone they love a gift for Christmas or birthdays, is a joy and a feeling that is in important to experience.
Saving and managing money is an important step to becoming a financially-responsible individual. By instilling this skill in your children early on, you can rest assured they will be better prepared for their future endeavors.
Until next time,