While parents have a lot to teach children these days, one overlooked aspect is teaching kids to save money. As any adult can tell you, money management is a skill that becomes extremely important. You can give your kids a head start by teaching them tips on how to save money at an early age.
Reasons to Teach Kids Money Management
As a parent, teaching important money managing skills will help your kids when they enter the working world. The best way to start teaching your kids how to save money is to start giving out coins when the child is five to eight years old. You can then start discussing monetary values and the importance of saving money.
Tips for Teaching Kids to Save Money
It is always a great idea to give your child a piggy bank to make saving fun. If you give your child an allowance, encourage your child to put a certain percentage of it into the piggy bank each week. If your child wants to purchase an item such a toy or a video game, have your child purchase it with the money in the piggy bank once they’ve saved up enough. You can also make a deal with your child in which you agree to pay for half of it as long as they save up their half.
Setting up ways for your child to earn money is easy. You can give money for tasks such as completed chores and good grades in school.
Helping Older Kids Save Money
As your kid reaches high-school, they will soon be able to have a part-time job. This is the perfect time to take your teenager to the bank and open up their first savings and checking accounts. The bank account will give them a head-start in developing good spending habits and in learning how to handle monetary items such as checks and debit cards.
As your kid works for and saves money, encourage your kid to show you their monthly budget and also offer assistance in balancing their checkbook. Talk to your child about specific goals and help them plan how to save. If you can instill good money skills, especially the ability and foresight to save money, these tools will be with your child for the rest of their life.
Piggy Bank. (Supplied by GeorgHH at Wikimedia Commons; Public Domain; http://upload.wikimedia.org/wikipedia/commons/e/e2/Sparschwein_Haspa02.jpg)