By: K.H. Smith
Saving money is a difficult task for adults, but starting your kids saving at an early age makes it seem natural. I think getting your kids interested in saving and money managing will serve them well for their lifetime. Here are some ideas to start your kids saving…
- Start a savings account in their name. Have your child put part of their birthday, Christmas, and holiday money in it. You can discuss a flat amount, percentage, or let them decide. Discuss the importance of putting money away for a special day, item, or treat and just having money for the future.
- An allowance is a great way to get kids to manage money. How you set it up can vary depending on your situation. My son can earn $5 per week allowance through chores. Some weeks he does his chores, some weeks he doesn’t. He gets paid accordingly. He is still a pre-teen, so I anticipate he will need more spending money in the future, but that will require more work from him!
- Discuss your own financial plan, within reason, in front of your kids. I try not to be specific with numbers, but I think it is good for my son to hear what we are saving for, and things like why I opted for a used car vs a new car. Children learn by example. I wouldn’t give more information than you are comfortable with, but I think it helps them to know you are not buying everything you want either and why.
- One thing my parents did regularly with me as a kid is match my savings for a purchase. So if I wanted something expensive, say a new flute for band, my parents would pay 50%, but I had to come up with a plan to earn the other 50%. Sometimes this took months of chores, babysitting, lawn mowing, etc., but I appreciated the item more, and it helped prepare me for life.
- Think about purchases before making them. I usually have my son think for a while about a purchase, usually, he decides he would rather have the money. Sometimes he walks around the store holding it, sometimes we wait a week to see if he still wants it. We also discuss how long it would take to earn that money back. Is it worth it? This works for adults too!! If you do this, point it out to your kids!
- Another trick that worked well for my son, that may work for other kids, was to let him keep the leftover spending money. My son went to a scout camp for 6 days. He was asked to bring $10 per day for spending on whatever he wanted in the camp store. I told him to consider wisely what he wanted and see if he still wanted it by the end of the week. I told him he could keep what he didn’t spend. He came home with $55! Obviously, this may not work for all kids, but my son enjoyed the challenge and really appreciated the funds! I was happy that he didn’t just spend $60 on junk food or silly toys. It gave him a great opportunity to be financially responsible.
How did your parents help you learn to save? Any other ideas on helping get kids interested in saving? Feel free to comment!