Did you know that your child forms much of their attitude about money well before they hit their high school years? It makes you wonder why the educational system puts off economics class.
As a parent, the burden falls to you to teach your children healthy financial habits from an early age. How can you teach your children the value of saving their pennies? The nine clever tips below can help.
1. Use Three Piggy Banks
If you never let your child spend their allowance on a candy bar, they may grow to resent money — an attitude that can stand in the way of future success. How can you teach them to save for a rainy day while still enjoying the fruits of their labor?
Use the three piggy bank method. One bank represents short-term savings, and the other two, longer-term goals. Devote the first to the portion of their allowance they can spend on a toy or treat when you do your weekly shopping. The second they save for a year, then blow the sum at the end — perhaps on a new game console.
The third represents their college fund. However, if they have other plans, or you have another way to finance their schooling, it can become a jumpstart on their retirement savings.
2. Switch to a Credit Allowance
Do you give your kiddos $5 each week regardless of what they do? Allowances can become weapons in your savings-lesson arsenal when used correctly.
Consider implementing a credit method of allowance. Decide on a maximum amount of play or electronics time you’re willing to add to your child’s weekly schedule. They automatically get some, but to earn the rest, they have to perform duties like picking up their toys or completing homework without prompting.
This method shows your kids how to save and use credit wisely. They know they can earn extra “luxuries,” but they still must pay the price.
3. Or Pay Commissions for Chores
Another way to use allowances to teach savings is to eschew the automatic allocation and switch to a commission-based system. In this method, you assign a dollar value to each chore. Picking up toys might net $.50, while scrubbing the bathroom earns $2.50.
The beauty of this technique is that it gives your children ownership over what they earn and save. If they want to sock away cash for a hot new video game, they learn that effort equals reward.
4. Make a List Together
Part of a successful savings strategy entails living within a budget. Teach your kids this principle when making your weekly shopping list.
Involve your kids regularly so that they grow familiar with what things cost. Give them a dollar amount and let them help as you go through your pantry and determine what you need to add to make complete meals with the ingredients already on-hand. Make it a game — pretend you are playing “Chopped” and need to spice up your basket ingredients.
5. Send Them on Grocery Missions
The learning doesn’t have to stop when you get to the store. If you have several little ones, divide your grocery list into parts, writing the estimated cost of items atop each section.
Assign a section to each child and challenge them to come in under budget. You can add a reward by letting them spend any savings on a treat.
6. Play Store
What if your kids are too young to roam the aisles solo? You can still teach them money basics by playing store at home.
Have them assign prices to household objects. You can print out play money or use the stuff from your Monopoly game. Include an introductory math lesson by helping them make change.
7. Create a Sample Budget
The best way to learn about managing household finances is by doing. Have your kids help you make a sample budget.
Make a list of your household expenses. If your kids are old enough to use a computer, make this a homeschool Excel lesson by having them create a chart to determine what’s leftover after paying for necessities. Discuss how to invest what remains.
8. Open Bank Accounts
Help your children open and manage bank accounts. While you’ll have to wait until age 13 to open a checking account, most institutions offer younger kids savings.
Each month, show them their statement. Pay attention to how the interest accrues and multiplies over time.
9. Help Them Use Savings Apps
Now that they have a savings account, help them to pad it through the use of technology. Many financial institutions now allow those with checking accounts to round up purchases to the nearest dollar and add the difference to their savings. Help your kids take advantage.
As your kids become teens, they might start adding subscriptions or acquiring monthly bills, like car insurance. Introduce them to savings apps to help them cut costs — these habits will benefit them in adulthood.
Use These 9 Clever Tips to Teach Kids About Saving
By the time your child takes economics in high school, they’ve already formed their money attitudes. Make sure they adopt healthy ones by teaching them these clever tips about saving from an early age.
