Teaching your kids how to save money will help them to understand how to wait for rewards and how to prepare themselves for the unexpected.
As you continue to teach your kid the importance of making wise money choices, the first stop you can make on the Save, Share, Spend, and Show method is Save. Teaching your kids how to save money will help them to understand how to wait for rewards and how to prepare themselves for the unexpected.
Depending on the age of your child, there are many different ways to help your kids understand how to save their money.
Talk about it
The first thing to do is to talk about money and why it is important to save the money you have. Put it in terms that your kid will understand. You don’t necessarily need to explain the complex financial structures that exist to your young child but you can explain that saving money helps you prepare for the future. You can also explain that sometimes you don’t know what the future holds so saving a little money over time can help you prepare for anything that comes up.
Use a Piggy Bank
A piggy bank can be a great way to teach your kids the importance of saving, while giving them an easy way to do it. Tell your kids that the goal is to fill up the piggy bank with dollars and coins, until there is no room. Illustrate that the piggy bank is for saving money for the future and that the more they save, the more their money will grow. Once the bank is full, empty it out and count the money together.
Open a Bank Account
When your kid is old enough to understand what a bank is, open an account for them. That way when they fill their piggy bank or get a check in a birthday card, it can become a ritual to take the money to the bank and save it to use in the future. This will develop a positive relationship between your kid and the bank.
Make a goal
Sometimes your kid may need a more real reason to save money than the potential “future.” To help, you can help them make a saving goal. This can be a goal to save money for a toy or game, it can be for a shopping trip, a dinner out, anything that will get them excited to put a little money aside. If they need a more visual way to track it, you can use jars to put the money in rather than a piggy bank. They can watch the jar fill with dollars and coins over time and once they save enough, help them count the money and use it for the prize.
Lead by Example
Children learn by example, so the best way to teach your child about saving money is to save money yourself. Have your own jar of money that you put funds in regularly. When you’re out shopping, show your children how to discern between various prices and explain why buying one item makes better sense than another.
Teaching your kid to save money can be both useful and fun. If you need help with strategies on saving money, reach out to a Mary Rigg Financial Coach.