piggy-bank

Teaching children to save money will give them the #Beststartinlife

1. Use Different Envelopes/Jars
You may be familiar with the envelope budgeting system for your own money, but this can also work for children. On either envelopes or jars, have your child draw pictures of what he or she wants. You may also want to help your child understand that some items will take longer than others to save for.

For example, the short-term savings container might have a picture of a specific toy, while the long-term container might have a picture of a trip to Disneyland. Teach your child to set aside money for short-term and long-term goals, and have another container or envelope for spending on everyday items.

2. Make a Savings Goal Chart
Once you know what your child wants to save for, figure out how many weeks it will take and make a chart. You can represent each week with a box and your child can put a sticker in that box once the money from that week’s allowance is set aside.

We did this with my son, and he put a picture of the Transformer toy he wanted on the chart. We figured out how many weeks of allowance it would take to save up (after his long-term savings and church donations were taken out). Every time he received his allowance, he would divvy up his money and put a sticker in a square (he loved stickers at the time). This way, he could see himself getting closer and closer to his goal.

3. Offer Rewards for Saving Money
Consider rewarding your child for saving his or her money. Much like my credit union, which offers t-shirts and other prizes, you can offer prizes to your children.

For example, if your child doesn’t spend any money for a certain amount of time, provide a small reward or treat. You can also make the prizes better the longer your child saves. Try stickers, an extra 1/2 hour of video games, toys, or whatever motivates your child.

4. Set a Good Example
One of the best things you can do is let your child see that you save money too. Put money in a jar while your child is watching and tell him or her it’s your savings jar. This will show your child that saving is “normal.” Plus, since most young children want to be like their parents, seeing you do it will provide them with money lessons that further inspire them to save.

5. Match Your Child’s Contributions
A “savings match” can be a great way to encourage your child to save extra money and get an early peek at the benefits of a company match for a retirement savings program like the 401k. While we have a standard amount my son is required to set aside from his allowance, if he chooses to save more, we match it.

girl piggy bank

Helping Older Kids Practice Saving

As your child gets older, a goal chart may be less inspiring, and drawing pictures on an envelope tends to lose some of its charm. However, you can still set an example of saving and you can still match your child’s contributions. Plus, it’s always a good idea to have different envelopes, jars, or accounts for different purposes.

 

 

-Money crashers

Comments

comments