As we discussed the “New Year” and resolutions we aspire to accomplish, the conversation turned to money and finances. Every family needs to be smart with their finances more than ever in this tough economy. We all agreed that the kids need positive lessons in saving and budgeting.
Check out this article from Angela Wenke and let us know what you think:
Teaching Your Children
to Start Saving Their Money
Most children these days do not understand the concept of saving or earning money. This has never been a major priority in their lives, or a necessary way of living for them. But as parents, it is absolutely crucial that you teach your children the importance of saving their earned money.
Before beginning to teach your children how to save money, you want to make sure they are old enough to understand the concept of saving money for items that they want or need. Your child should also be able to understand how they can save their money to invest in things, and learn money management.
Below are some tips to help you teach your children how to save their money:
- Once your child is old enough to count money and understand how much they are counting, this is a perfect time to start teaching them the real meaning of money. This is also a wonderful time to start a piggy bank and to start allowing your child to earn money for chores they do around the house.
- A great way to start their interest in saving money is to establish a chart on their wall with a goal for a certain toy that they want to purchase. Each time they put away money into their piggy bank for that item they mark off on the chart how much they just saved or invested for that toy that they really want. By using the chart and implementing them to save their money you are starting to show them how to save their money, and how rewarding it is purchase the item they want with money they earned by doing chores.
- Divide their allowances. This is a great trick that we use in my family, when handing out allowances to my children we made sure they put some money away for their savings piggy bank, some money away in their toy piggy bank and some money they could keep to use on items when we went shopping as a family. By not giving your child their entire allowance in one lump sum you are teaching your child to manage their money and to save and invest. Friends of mine have even gone further by dividing their children’s allowances the following way. One third towards their church for the offering, one third in savings and one third in their pocket. This is another great way to teach your child to give back by donating to your church’s offering plate weekly.
- Even small children are able to earn money for chores that do around the house, your child can start as early as two years old. Make their chores brushing their teeth, cleaning their room up weekly, and helping to clean up their toys throughout the week. Start your children early by teaching them that everyone in the family has to help straighten up the house, and this will avoid your children being lazy and not cleaning up after themselves in the future.
- Other chore ideas are to help care and feed their pets, help with yard work such as picking up trash out of the yard, help with leaves, watering plants or your garden, doing dishes, putting dishes away, and so on.
- You can also teach them to save their money by opening their first savings account once their piggy banks are full. Most banks offer child savings accounts and some banks have incentives for the children to open their own accounts. Our bank US Bank offers incentives for the more money they put away they are rewarded with small toys and gifts for every $25 they save, this is a wonderful encouragement for my daughter to put her money in the bank for a rainy day or for a special item she really wants. This also has helped her to understand banking procedures.
Teaching your children to save money is not going to work over night; this as with most teachings in life will take time for them to truly understand. This can be a very fun and rewarding experience for them to truly learn the value of money and working to earn their own money. Just remember to be patient and consistent in teaching them the importance of saving their hard earned money.
About the Author: