Teaching children to save money isn't easy. They usually want to spend money they receive immediately. Often to encourage savings, you may need to show children the benefits of saving in exaggerated ways. Once they understand the concept you can back off a little.
Time Required: Indefinite
Match Savings:For every dollar your child saves, offer to put in a matching contribution. When they are little, you might be able to match 100%. Once they are older 25% or 50% might be reasonable to encourage them to save.
Open a Savings Account:Encourage him to deposit a portion of money he earns into a savings account and track the interest earned on his account.
Encourage Them to Set Goals:If they want to purchase an expensive toy, hang up a drawing of an empty thermometer. As they save their money, color in the thermometer. They'll be able to track their progress visually.
Give Non-monetary Savings Rewards:Young children may not understand that $10 tomorrow is better than $5 today. Consider rewarding children with things special to them for saving their money: stickers, toys, and special outings can be helpful.
Make a Wish List:Encourage children to identify fun things to spend their money on. For older children, prioritizing the list can be a helpful challenge.
Display a Picture:Hang a picture of a wanted item off their wish list on the wall. If your child is saving for a special purchase, hang up a picture to remind them of what they are working towards.
Save Money in Front of Your Children:Keep your own piggy bank or deposit money in the bank when you are with your children. Explain what you are saving for and your children will mimic your behavior.
Help Them Spend Money:Occasionally, children will get so focused on saving their money, that they won't spend any money along the way. Help them enjoy their money by spending some on small purchases or surprising them by buying something they'd like.
- Praise your child for any amount of savings.
- Encourage your child to keep saving even if he wastes his money.
What You Need
- Savings Account or Jar
- Piggy Bank