How to teach kids to save money
by Melissa Brodsky
Lessons about money can last your kids a lifetime, and little is more important than teaching your kids to save. It’s only natural that your kids want to spend the moment they get a bit of money in their pockets, but saving at least some of it can provide money for things they REALLY want later rather than simply satisfying an impulse right now. Likewise, they can use their savings to contribute to major purchases as they grow older, such as a first car, a special trip, college costs, or the prom.
So your friends and family start giving junior money before he’s even walking? Open a savings account and deposit it for him. Once junior is old enough to understand saving, share the account information with him and take him along to make his deposits. If you’re starting with an older child (kindergarten age or so), take him along when you open the account and let him have the fun of counting out the money he will deposit and handing it to the bank clerk. Remember that piggy bank saving counts too, and your child may find it more fun. In such a case, your child might want to deposit the money for safer keeping once piggy gets full.
Long-term goals like saving for that first car or college textbooks are certainly worthy, but they may not excite your kid, depending on her age and personality. If such expenses are years off, some kids will find saving for them a drag. Other goals, such as saving for a coveted toy or a trip to a favorite store (at which they can spend their own money) might tickle their fancies when they’re younger. As they get older, you may have more success with suggesting more important goals.
Decide on an Amount:
Even as an adult, you know that money isn’t fun if all you can do is act responsibly with it. Allow your kids to enjoy the payoff they get when they make a purchase they want or diligently save for something and finally get to buy it. Suggest (or require) that they save at least 10 percent of allowances, monetary gifts, and earnings. Of course, explain how they might benefit from saving a little more as well.
The lessons your kids learn now will help them manage their money well once they become adults. Start with saving and then move on to teaching about giving and investing.
For other great money saving tips and to learn about the fiscal cliff, head over to Dollars and Sense for more informative articles.