Easy Ways to Teach Children How To Save

by Lance Ekum on · 3 comments

Every par­ent wants to see their chil­dren suc­ceed finan­cially. It takes the invest­ment of time, not just money, to make this a pos­si­bil­ity. From a young age, chil­dren start to pick up habits that could last them a life­time. This is a parent’s per­fect oppor­tu­nity to teach about sav­ing money. There are a vari­ety of dif­fer­ent accounts that are avail­able for children.

 

Mod­eled Behavior

While it is not always easy to admit, chil­dren are con­stantly watch­ing and love to emu­late their par­ents. From the very begin­ning, chil­dren need to see their par­ents sav­ing money. While they are not going to be able to watch as an online trans­fer moves from one account to another, they will be able to appre­ci­ate change being placed in a jar or a fam­ily piggy bank. Mom and dad need to make a con­scious effort to save in front of their chil­dren. Over time, it becomes some­thing that seems natural.

 

Let­ting Them Try It Out

A piggy bank is the per­fect start­ing point when it comes to teach­ing chil­dren how to save. This is a hands-on activ­ity that kids actu­ally par­tic­i­pate in. Choose a fun con­tainer that will add a lit­tle fun to their bed­room and watch them start sav­ing money. When they receive gifts, have them place part of it into the piggy bank and allow them to spend some of the money. They learn that at least a part of every amount of money they earn or receive as a gift should be saved.

 

Tak­ing Sav­ings to the Next Level

At some point, a child is ready to move their money from the piggy bank to an alter­nate loca­tion. When this hap­pens, it is time to find a kid-friendly sav­ings account. In the U.S., many banks offer spe­cial accounts that come with incen­tives for a child when they save. A parent’s name is always on the account and they deter­mine when money is with­drawn. As a child grows, they can be given more free­dom with the account. How­ever, reg­u­lar deposits into the sav­ings account should be maintained.

In the UK, a Junior ISA is a sav­ings account specif­i­cally designed for chil­dren. It grows over time and receives full access when the child comes of age. This money can be used for any­thing includ­ing edu­ca­tion, the pur­chase of a vehi­cle or even a favorite video game. In each instance, a par­ent can point out that sav­ing money was a great way to accu­mu­late the nec­es­sary funds for impor­tant pur­chases. The funds con­sis­tently earn interest.

 

Giv­ing Them Control

When chil­dren are younger, show them the account state­ments, so they actu­ally see their money grow. Older chil­dren will be able to appre­ci­ate the growth of the account from one state­ment to another. At every turn, encour­age them to save. Make it seem excit­ing and fun and some­thing that will ben­e­fit them in the long run. At some point, allow an older child a lim­ited amount of con­trol. They will get a feel for what it is like to have money and the abil­ity to con­tinue to save or spend.


Writ­ten by a staff writer

Lance writes sto­ries from his heart, aim­ing to inspire and moti­vate, as you align more fully with YOUR true peak. When he’s not here, you can find him hang­ing out with his fam­ily, rid­ing a bike, or just gen­er­ally act­ing goofy.   Sign up for the Thoughts from the Tree­house newslet­ter and get addi­tional inspi­ra­tion in your email inbox!
Lance Ekum
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