Smart ways to encourage kids to start saving early
Are you tired of your kids spending money like it grows on trees? Encouraging kids to save their money in a world that revolves around spending is not necessarily an easy task. Given the fact that many Americans are distressingly under-saving, it’s critical that we instill the importance of saving for the future in the next generation. Here are some excellent ideas to make saving money attractive and, dare we say it, even fun for your kids:
1. Clear the piggy bank
The piggy bank may be synonymous with saving money, but drop a coin in the bank and it’s gone from sight. Use a clear jar so kids can see it visually accumulate. It’s much more exciting and increases satisfaction. Periodically, it might even be fun to change four quarters into dollar bills.
2. Set a savings goal
Save your hard earned money to purchase something, and it typically carries more value and appreciation. When your child finds something they’re just desperate to buy, help them set a savings goal. Might they have some birthday money coming soon or could they do some chores around the house? Be sure to encourage them along the way and celebrate their success when they reach their goal.
3. Match their savings
There’s no better incentive than making money when you save money. Consider matching your child’s saving efforts. Maybe not dollar for dollar, but an amount that’s fair and offers encouragement. You can tweak it as necessary so that it can grow with your child’s needs.
4. Open a savings account
A savings account is a safe place for saving money and it also gives older children an introduction to deposits, withdrawals, compound interest, bank statements, debit cards and banking processes.
5. Set a good example
Do you shop for bargains, use coupons, comparison shop? Your kids will mimic your behavior, so lead by example. Clip coupons and send them to look for the items in the grocery store. Show them how to compare prices as they get older, either in stores or online. Brand name versus generic, is it worth the price? They may sing a different tune when they have to spend their own money.
Your best bet is to start with simple discussions about saving and spending, and needs versus wants. Work conversations into your everyday life, offer lessons, different resources and tools to help them manage their money and you’ll have done your best to set them up for financial success. Starting small and early will help build a stronger foundation for financial health and hopefully lead to a more financially balanced group of savers.