10 Essential Tips To Teach Your Children about Saving Money

kids

Teaching your kids how to become civilized, awesome people is one of the primary goals most people have. Unfortunately, it doesn’t work out for everyone because their idea of awesome and civilized is so different from the rest of ours. However, that doesn’t mean that parents can’t teach their kids some pretty useful lessons in life. One of the most useful, for instance, is how to save money. Many parents make the mistake of not teaching their kids how to view, handle and think about money and that will come back and bite them in the behind as adults. Money is one of the most important topics parents can teach their children; financial education is the key to a successful future. If your kids can’t manage money, they can’t manage their own lives. And since school is teaching them strange ways of adding and subtracting and calculus is not helping anyone balance a checkbook, it’s our job as parents to teach our kids the most valuable money saving lessons in life. And we have some tips for you that will make teaching your kids to save money a little bit simpler.

Talk about Money

The more you talk about money, the more your kids will begin to understand how it works. There is no time like the present to get started on this if you have not already. There is no such thing as a child too young to understand the value of a dollar and how money works in the real world. Answer their questions, be honest with them and talk about money often and honestly.

Set a Good Example

Kids learn by example and if yours is not a good one, they will learn from you. If you make money mistakes, you don’t save and you don’t show them what responsible earning and spend looks like, your kids will not learn how to care for their own money and finances. You have to be a good example of saving if your kids ever will do the same.

Make Goals

Sit your kids down and make some savings goals with them. Explain to them what you save for (retirement, vacations, etc.) and ask them what they’d like to do with their money. Help them make a goal of what they want so that they have something tangible they can look forward to and refer to when they need a bit of assistance remembering why they save.

Create a Family Budget

Sit down and help your kids make a budget. This is a budget that will help them understand where your money goes and what it’s for. You can even make one for the kids so that they can see where their allowance is going or where their income from their job is going when it comes home with them. It shows them how to budget for monthly expenses, savings and for fun.

Make it Fun

If you make savings fun, kids are more likely to do it. For example, if you let them choose something fun to save for, they’re going to want to do it more. A good idea is to write down what it is they want to save for, how much they need, and then write down the balance of their savings every time they add to it so they can see how much more savings is needed to reach their goals. It’s fun and helpful, and it will motivate them to save.

Use Jars or Buckets

Mason jars are everywhere right now, so go get some. Now put labels on them for the things that your kids want to save for. For example, a preteen might be interested in saving for college or a car. Or a first apartment or a new dress or shoes or whatever; a younger child might be interested in saving for something else, such as a new toy or spending money for vacation. Write everything on stickers, put them on the jars and let kids see their savings. It makes a big difference.

Offer to Match

Sometimes it’s hard to convince kids to take their money and put it away, so offer to match whatever they save. This is a particularly good idea for someone such as a teen who is looking to save for a car or a down payment on an apartment to rent. If you offer to match whatever they manage to save by a certain date, they are probably going to be more inclined to want to save more and want to do more with their money so that they get more from you.

Open a Savings Account

Older kids will do better with this one, but it will help all ages, too. Open a savings account for your kids. You can make saving more fun by giving them control of their ‘checkbook’ to balance, by letting them make their deposits and check their statements every month or quarter and by essentially being in control of their own financial future. It’s a great lesson for all kids on the art of saving and making life more fun.

Let Kids Make Mistakes

Teens will do this more often than smaller kids who have no real control over their income. If your teen fails to save for the things that need to be saved for, such as gas for his or her car, don’t be there with the funds to bail him or her out. Let your kids learn the hard way that not budgeting correctly and not saving correctly has negative effects on their life. Not getting to go out with their friends one Saturday night at 16 because they didn’t save for it is going to be far less painful than missing a car payment at 21.

Offer Advice When Necessary

Some kids need advice; they need guidance. They might ask for it and they might not. Your job is to recognize when advice is called for and offer it in a way that is not condescending or out of line. Your kids will learn from you, and you need to be there to teach them why it’s important to save money; sometimes by just talking it through when they have questions.

Photo by Adam Berry/Getty Images