4 Tips for teaching kids about saving
With National Credit Union Youth Month approaching in April, now is an ideal time to teach little ones about saving money. Learning smart money management skills at a young age builds their confidence and encourages financial responsibility — even before they go to college or earn their first real paycheck. Use these fun ideas to help them look forward to setting money aside early and often.
1. Roll Multiple Lessons Into One
Encourage your kid to save up for an exciting treat! Brainstorm together to discover a toy or experience they’d love to have. Figure out the cost of the item and establish a time frame to reach the goal. For example, if they want a $60 game accessory, they could make six deposits of $10 over six months. Goal setting teaches multiple money lessons: delayed gratification, budgeting, and a consistent savings habit.
2. Let Them Earn It
Present children with the opportunity to develop money-saving skills by first teaching them how people earn an income. Encourage them to provide a product or service to someone else in exchange for money. Even though they may not be old enough to work a regular job, they can still make money by selling homemade items or completing chores. Let them see how their ability to earn money is directly tied to their desire to earn and save.
3. Keep Their Eyes on the Prize
Pictures can motivate kids to stick to their savings goals. Images act as a vivid reminder of why your child should skip an impulse buy. Place a photo of the savings goal, e.g., a motorized toy, where they can see it often.
A simple savings chart can also keep your child engaged. Use one that prompts them to color an image at various savings intervals with crayons or markers.
4. Reinforce Progress the Fun Way
Kids of all ages benefit from frequent rewards along the way to their final savings goals. If a small child must wait an entire year to save $50, they might lose interest and fail to meet their goal. However, if you set small rewards at specific savings milestones, you have a better chance of keeping them excited about saving. For example, give them nonmonetary rewards, such as a special playdate for every $5 they save.
Plant the seed of financial wellness this April. Teach your kids about saving money so they can develop the habits they’ll need to enjoy the bounty of a secure financial future. Then, deposit your child’s cash and coins into an interest-bearing savings account so they can see the power of compound interest.