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Money Is Important
I can’t think of one parent I know, including myself, who hasn’t said to their children, “money doesn’t grow on trees," or “do you think I’m made of money?" While I have no idea where those two statements originated from, I know they’ve been around for quite some time especially for parents who are looking for tips on how to encourage children to save money.
As adults, it seems like a simple concept to save money—we know we’ll need it sooner or later. To a child, money seems endless at times and teaching children to save and skip spending sprees is often a challenge.
Unfortunately, as parents, if we don’t nip bad saving or spending habits in the bud before our kids reach their high-school years, they may have to learn the money lesson the hard way—by not having any. Items as simple as understanding how a bank account works, balancing a checkbook or making a budget may seem easy to us, but for children who no nothing of the money world, these lessons need to be taught.
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Ten Tips for Teaching Your Kids to Save Money
When I was a kid, my Dad had what he called, “lose a buck." None of us kids liked the lose a buck concept because it meant if we didn’t do our weekly chores and based on the number of missed chores, we’d lose one buck, sometimes more. I do think it was a great tool to make us be more responsible, however. Actually, my grown daughters will tell you I also utilized the “lose a buck" system only with fake money with my face copied on the dollar bills, something they didn’t like either—but they did learn from it.
For those of you seeking ways on how to encourage children to save money, these top ten tips will help:
1. Budgeting the Allowance – Kids shouldn’t just be handed an allowance, they should work for it. Once they receive the stipend, explain to them how long the money will need to last and help them create a budget.
2. Savings Account – Beyond the piggy bank, when your child is old enough, open up a savings account for them. Help them understand how saving accounts work and teach them how to read monthly bank statements to see how money adds up if you save.
3. Kids with Jobs – If your child is job age and has no money control, you need to teach them not only the importance of money but also the work ethic that goes with that paycheck.
4. Parent Match – For any age child, if they are excited about saving money, tell them you’ll match $1 to their $5, or whatever denomination you feel is fair.
5. Goal Setting – If your child wants that new video game or skateboard, help them set goals to save money to buy the item or put toward the item.
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6. Be an Example – If you love spending sprees, it won’t take your child long to figure out what a spending spree is. Be responsible yourself in order for your child to understand how important money is.
7. Software Programs – Show your children how to save money in Microsoft Excel through a spreadsheet or utilize KidsSave, a software program geared toward teaching kids money management.
8. They’re Not Adults – Your financial worries or concerns should not be shared with your child, no matter the age. They will become discouraged or even fearful of money or the lack of money if you tell them when you are hitting rough financial woes.
9. Share Some Costs – If you have an older child who was able to buy that motorcycle or car, consider covering the cost of the insurance or needed repairs.
10. Let Them Make Mistakes – Even if you know your child has five dollars in their pocket and fifteen dollars worth of items in their hands they want to buy, allowing them to make mistakes can often show them how to handle money better. Follow through by discussing what they did wrong and what they can do better next time.
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Encouragement and Follow Through
Never forget to encourage and praise your child when they do well as budgeting and saving their money. Talk with them often about finances and why money is important.
To aid you in teaching your children money responsibility, visit Bankrate.com where you'll find links to many fun websites where kids can learn how to save money.
Learning to save money is especially important for kids who have jobs. If you start utilizing these tips on how to encourage children to save money at a young age, they’ll be more responsible as they grow.
Please be sure to check out the other tips and strategies in Bright Hub's collection of personal and household budgeting guides.
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Children on a Spending Spree? How to Encourage them to Save Money
Is there a way to learn how to encourage children to save money?Financial responsibility is important, especially when your child finds their own way to make money. Find out in this two-part series how to teach your kids to save money as well as top ways kids can earn money.