Teaching your kids to save money is an important lesson to help your child become a successful adult. Children can begin understanding money concepts as early as the age of 2 or 3 years old. Many of us have learned about the importance of saving money through experience, often the hard way. Money management is not something our public school system teaches, it is from our example that our children will learn best. I’ve put together 3 simple ways to teach kids how to save money.
- SAVINGS JAR
Piggy banks are cute but having your child repurpose an old pickle jar or some sort of clear container will allow them to be able to see inside and watch their money grow. Just like adults, kids need goals. Set a simple goal from the beginning: Fill the jar all the way to the top! Reward your child with an allowance for chores done around the house and encourage them to put the money into their savings jar instead of spending it on candy and other impulse purchases. If at all possible, match each amount they put into their savings jar. Attach a photo or have them draw a picture of something they would like to save for. Help them set goals, but make sure they are realistic and attainable. You want to set them up for success! Print this great savings chart (PDF) for your child to use for tracking his/her goals and money!
- LEAD BY EXAMPLE
We all could use a little extra money in savings, right? Lead by example and start your own Savings Jar. Add money to your jar while your child is watching and explain to them the importance of saving money and what you are saving for. The idea is to normalize saving money. If everyone is doing it then it will seem normal to them and become a healthy lifelong goal. I love the idea of a savings jar for the family with a trip to the movie theater or even something larger like a family vacation! Make it exciting and have them help you count the money inside. Fun and educational! If you are saving coins in your jars – check your local bank or credit union as some offer the use of Coinstar for free if you make a deposit into your account.
- OPEN A SAVINGS ACCOUNT
As they get older, savings jars won’t be as appealing and they will want something more “grown up.” Have them bring their jar to the bank to open their very own savings account. Explain how interest works and the benefits of leaving their account alone to grow their money faster. Help them set short and long term goals. Saving for a car or college fund is a great long term goal for tweens and teens. This is also a good time to introduce a checking or savings account register. Teach them how to balance their account by adding and subtracting deposits and withdraws. These things will teach them essential money management skills they will need as adults.
There you have it, 3 simple ways on How to Teach Kids to Save Money. One final tip, besides saving and spending money on ourselves I believe it is equally important to teach our children to have a giving, selfless heart by donating to charity. Have your child choose a charity that speaks to them, maybe a local animal shelter or children’s hospital. Donating money is nice, but it’s also fun to take them shopping for things their charity may need. Giving back is so fulfilling and will create a lifelong desire to pay-it-forward.
Don’t forget to read my last 2 articles related to saving and earning money:
10 Easy Ways to Make Money Now
How to Pay Off Debt When You Live Paycheck-to-Paycheck
Final 2 articles in the series – coming soon:
How to Save Money and Build an Emergency Fund
How to Stop Spending Money and Start Saving for a House