All of us adults know what it means to save money. However, it’s another story as to whether or not we save diligently from our paychecks each month. Somehow, someway you learned about saving and now you want to pass along important savings principles to your children. Why? If you’re like many people, you got a job in the real world without much savings in the bank account. You might have had school loans or credit card debt. Maybe you owed on a new car too! You eventually became more wise in your ways and realized it was a good idea to have an emergency savings account with 3 – 6 months of living expenses to protect against financial storms.
Wouldn’t it be great if your children could start off with savings instead of debt? It’s never too early to start teaching children to save money.
Preschool Saving
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The best way to teach children to save money at this age is to use piggy banks. They can start to understand the basic concepts of saving by seeing that the money is placed into the bank and taken out later. It basically serves as a game for them that should be fun and interactive. You can sit down with your child and show them how to put the money in the piggy bank and then take it out later. There are a lot of piggy banks in different colors, shapes and sizes that can make the experience a lot of fun. You can even buy a bank and have your child paint or decorate it themselves. The bottom line is to make the process of learning about saving fun for them.
Elementary to Middle School Saving
Our daughter is in elementary school and she now understands how money can be used to buy, save and give. Unfortunately, she hardly wants to save right as buying with some of her earned money is a lot of fun. Children at this age also understand the idea of earning an allowance when they do a special job or chore for mom and dad.
As your child reaches this age they need to start learning to save for some goal. For example, they might save a portion of their money for a big toy they want to buy such as a new bike or doll. Through this process they learn that they can’t have everything they want and they must save until they have enough money to buy the item.
Children can also begin to understand the idea of having a children’s savings account and that their money can earn money, or interest while in the account. The basic ideas behind a piggy bank built for giving, saving, spending should still be used but a child can get creative and use envelopes, jars, or whatever is most fun for them in managing their money. When the savings jar is full the money can be taken to the local bank and deposited or an adult can deposit the money for them via a transfer out of their own checking account based on the amount saved. Overall, this is a perfect opportunity to start getting children used to viewing their own savings account online and see the balance and the interest earned.
Final Thoughts
Make sure you provide your child with plenty of encouragement when they reach their savings goals. Your child will be pleased with what they’ve accomplished and begin to learn the importance of saving as they get older and approach the teenage years.
Also, remember to be consistent as a parent. Don’t always give into a child’s wants if they haven’t saved enough money . Children need to learn at a young age they must earn to obtain money and must save to buy things they want. Eventually, the value in saving will come naturally as they manage their first paychecks during the teen years.
What do you think about these tips to teach children to save?
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