America Saves Week: Teach Children the Importance of Saving Money

Did you know that this week is America Saves Week? America Saves, along with the America Savings Educational Council, created America Saves Week. It was started in 2007, and according to the America Saves blog, around 2,000 organizations participate and millions of people are encouraged to improve their finances.

In honor of America Saves week I’m sharing some of my favorite children’s savings tips with you to help you encourage saving in your family and teach this important principle!

savings ahead © by 401K

Use a Piggy Bank - A piggy bank is a great way to teach your children how to save at a young age. Most adults can remember the fun in having a piggy bank. Children can play with them and get a basic understanding of savings by saving up for a toy or some small item that pleases them.  Encourage your child to empty the bank and deposit the coins.  You can even give them spare change to use as you receive it.

Open a Children’s Savings Account - This site is all about helping parents teach savings and to find a children’s savings account that meets their needs. A savings account is a great teaching tool and goes with your child as they grow up. We feature the ING kid’s savings account on this site because of their dedication to helping kids learn about money but also because of the great features which include a competitive interest rate and ease of use.

Help Your Kids Learn to Earn - Your most important job as a parent is to teach and guide your children and teaching savings is no exception.  Kids have to have money in order to save and they must learn how to properly earn this money.  I recommend creating some healthy learning chores around the house and pay your child based on the quality of work performed.  Teach them how to manage this new found money by saving a portion in their savings account or piggy bank.

Create a Savings Goal - It’s important for adults to have a savings goal and definitely is for children too!  Their goal might not be $5000 in the emergency savings account.  However, the goal might be to save for a new bike or even save for a special class trip.  It could even be saving for a toy.  The important thing to remember is to teach your children how to set a savings goal, support them in achieving it and reward them when they’ve done so.

Set a Good Example - Finally, children learn best when they see a good example.  That’s why I’m all for having open conversations about money in the household.  Children, as they grow older, can also participate in the family budgeting.  They need to know mom and dad save money and how this is an important priority.  So, if you’re saving for something, a larger emergency savings account, a car, or whatever, make sure your children are aware and make it a public celebration when you achieve your goal!

Hopefully, America Saves Week will encourage you to teach or reinforce the importance of saving in your household.

What savings tips do you have for children?  Let us know in the comments.

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A Children’s Savings Roadmap

As we’ve been growing our blog it’s become clear that there are a lot of different savings levels for children. Certainly, this is true for adults too. We focus the writing on helping parents teach children the importance of saving for the future. Depending on your child’s age, this could mean a lot of different things. So, we’ve put together the children’s savings road map to help guide your conversations and discussions related to helping your child save.

Piggy Bank Savers

Starting as early as age 4 or 5 you can begin educating your children about savings. Start this phase off with purchasing your child’s first piggy bank and help them save for candy or a small toy from a discount dollar store. Kids don’t have to be earning an allowance at this stage. Mom and dad can just offer them a little bit of spending money each week to allocate towards their savings goal.

Savings Account Savers

Photo © by Kitty Terwolbeck

By now your child is a little bit older and can grasp the concept of earning or receiving an allowance for doing jobs around the house. Saving in a piggy bank can still work great for these youngsters but you might be able to start them with an online kids savings account such as our featured account – ING for Kids. The savings goal obviously increases in this phase as well. Consider helping your child learn to save for a larger toy, or even a fun-filled entertainment event with a friend such as bowling.

Teenage Savers

You’re child is probaly in the teenager years and the savings goals should reflect larger items that require more responsibility. Do they want to go on that special trip with their church or high school? Well, they’re certainly going to need a savings goal, aren’t they? Mom and dad can help with a match, but children need to do their part too. This phase can also mean saving for a down payment for a car which many teenagers would love to have when they are of the proper age.

Saving for College

Phase 4 is saving for an even larger goal such as college. Phase 4 savers are contributing a part of their part-time paychecks to this goal and are doing their part to help earn their way to a college degree. This type of savings doesn’t necessarily replace the saving that parents can do with a college savings plan, or educational savings account, but can be in addition to these tools. Children might continue to use their ING Kid’s Savings account to save for college expenses such as tuition, room and board and food.

Saving while in College

Finally, a phase 5 saver is a child in college that is saving for college, but perhaps future savings goals after graduating. This saver is for children who are a year or two into college and have settled in well. They may have a part-time job while attending school. These types of savings goals may include building an emergency savings account, saving for work related expenses, such as clothes, or even for apartment or housing after school. A phase 5 saver has the present under control and the future in mind. This phase is only possible when a child has learned the importance of saving and done their part in phases 1 – 4.

Hopefully, this article helps create a clearer picture in your mind of a path towards savings for your children. It’s your job to educate them on the importance of savings and why they need to prepare for their future as young adults. Each phase also provides a great opportunity to help children learn to manage their money wisely so they can have enough to contribute towards savings.

What do you think about this children’s savings road map?

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Children’s Savings New Years Resolutions

The New Year is upon us and while not everyone is a believer in New Year’s resolutions, it does provide a great time to stop, pause and think about this year’s accomplishments and what you hope to do next year.  And since we talk about helping children save on this website, why not consider some savings goals this coming year?  It’s a perfect time to start teaching your child the importance of saving money.  So, no matter your child’s age, we have you covered with a short list of goal ideas you can start applying now (even before the New Year gets started).

1) Create a Children’s Savings Account - Yes, you probably guessed we would mention this one.   We think there is value in your child having a savings account.  If nothing else, it’s an important responsibility they can learn to manage with mom and/or dad.  And it even provides you the opportunity to explain to them what savings is and why it’s important.  Check out our list of the Best Children’s Savings Account to find one that might work best for you.  And make sure you check out our tips on how to teach children to save.

Photo © by ThrasherDave

2) Help your Child Learn to Earn - It really doesn’t matter your child’s age.  Earning can start when a child is as young as 4 and certainly continues in various levels of responsibility for years to come.  Does your child have any real responsibilities around the house?  If not, find them some.  They can learn to earn by helping with their assigned jobs and even look for a job outside the home if they’re older.  And what should they do with these earnings?  Saving some, of course.  Try to help your child learn it’s important to save at least 10% of what they earn in their jobs.

3)  Start Saving for College - You have a job in the savings category of personal finance too.  If you choose to help your child off to college one day without significant financial burden, we recommend starting a 529 plan for your child and consistently contributing to it.  Make it a part of your monthly budget and start this saving as early as possible.  But, make sure you’ve maxed out your own savings for retirement before doing so.

4)  Educate Your Child About Finances - Parents with younger children have a big responsibility to start educating their children about money at an early age.  You can share a lot of important savings principles, but one of the best ways for a child to learn is to be taught in a fun and interactive learning environment.  We continue to feature the ING Kids Savings Account, not only for their great account features, but for the Planet Orange kids financial education tool.

While there are a lot of great goals you can pursue this year as it relates to Children’s savings, we like these the best because we feel like they can go a long way to help your child learn and for you to feel good about doing your part as a parent.

What do you think about these ideas?

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