Teaching Kids to Save Money
It is never too early to start preparing your kids about saving. According to a 2019 National Foundation for Credit Counseling survey, only 55% of adults grade themselves with an A or B in regards to their knowledge of personal finance. And if the parents aren't very knowledgeable, that means their kids may struggle with finances as well. Here are some helpful hints to help teach your children, and perhaps yourself, the value of money and how to save for the future.
- Start with a small savings goal for something such as a toy or fun activity. Use this as a “Stepping Stone” to learn how to earn and save money. Make goals realistic and don’t discourage saving by picking a toy/activity that is too expensive or takes too long to save toward. Reaching the goal shouldn’t be easy, but it should be fun.
- Use a jar to store his/her money and have fun decorating the jar. Create a poster board savings chart and use stickers or color in squares to track progress.
- A weekly allowance or earning opportunities. Extra jobs around the house can help add dollars to their new savings jar.
- Have casual conversations about money. Teach them to think about their spending habits.
- Once the goal is met, celebrate by helping them buy their toy or activity. Continue the conversation and encourage them to start saving again.
- Since children learn from their parents, be a role model. Spend wisely and live within your means in front of your children.
- Talk about giving. It is essential for to kids learn the importance of giving back to others. Consider making three jars – one for saving, one for spending, and one with charity donations.
- Open a savings account. Many banks offer children or student savings accounts with low minimums to open. Offer to match any money they save to encourage lifelong savings habits.
- Download a savings app just for kids. There are a number of apps available that can teach children financial literacy. One example is Savings Spree that helps kids aged 7+ to learn about earning, spending and saving money.
- Create a budget. Kids should know all about budgets and how to stick to one as they grow up.
Teaching kids about money is a lifetime lesson. Demonstrate sound financial decision making but don’t prescribe all of their business decisions. Let them make mistakes early and teach them the lessons learned. With useful guidance and smart choices, your kids are on their way to financial success. Begin by opening a Stepping Stones savings account with North American Savings Bank! Give us a call at 800-677-6272.