Ways to teach children the value of saving money
Parents can teach children the invaluable skill of saving money, and it is a benefit that will last them a lifetime.
Teaching children about money, especially saving, is a benefit that will last a lifetime. Kids are naturally inquisitive so their curiosity regarding money is not surprising. Children will primarily model their parents’ money behaviors, and therefore parents’ actions and messages must be clear and concise. Children will also learn through experience and practice with money.
Parents should model the behavior that they want their children to adopt. In this day and age of ATMs and direct deposit, a parent should take their young child to a brick and mortar financial institution like a bank to make a deposit. This event will give the child a physical experience to attribute to the act of saving. Prioritizing and discussing savings also let children know the importance of this facet of money management.
Parents can make their child’s learning experience fun. Let children decorate containers that will be used exclusively for saving. Post a picture of a recently requested item near the savings container. This will introduce the concept of goal setting. Calculate the amount that must be saved to reach this short-term goal. A simple chart or graph can be used to reflect savings growth and the progress toward achieving the child’s savings goal.
Above all, parents must ensure that children have money to use. Children can receive money through allowances, cash gifts, or by requesting it. They can also earn money by completing chores and other tasks. Parents can accelerate the savings by contributing “interest.” Matching what the child has saved at a certain point or simply making a periodic donation will also encourage the child to save.
Celebrate the achievement of a child reaching his or her first goal. Help the children realize that this is a monumental event. Continue to offer encouragement and guidance as the children set short and long term goals and persist in saving.
Parents who provide an opportunity for their children to learn about money are teaching a skill that will prove to be invaluable as the child matures into adulthood.