Smart Steps to Teach Your Kids to Save Money
3/13/23 | Lindsie Wharff, Marketing Specialist
Saving is a crucial part of growing up. It’s important to teach your child healthy saving habits as soon as possible. These habits take time to teach, so start early. Here are some tips to help you get started with your kids today!
Getting Started: Using Visual Aids
Once you believe your child is ready to start savings, it’s a good idea to use visual aids to show them how to save. You can:
- Hang up a savings goal chart they can fill in as they reach their goals.
- Give them a see-through jar to save their money in so they can see their progress.
- Help them compare prices while at the grocery store so they can spot a deal.
- Take them on a field trip to the bank and use the coin counter to turn change into cash.
- Show your children receipts and point out the amount you paid.
Next Steps: Wants Versus Needs
Once a child is old enough it’s important to discuss the following concepts:
- SMART Goals
Make sure children know to set goals that are specific, measurable, attainable, realistic, and time-based.
- Wants vs. Needs
Children need to define what a necessity is. Everyone needs food, shelter, basic clothing, healthcare, and education. Wants are all the extra things we tend to enjoy like concert tickets, candy, designer sneakers, or that latest smartphone.
- Impulse Buys
If your child has a favorite influencer, use their content as an example. Explain that often we are strongly encouraged to buy things, but that it’s important to wait and think before we make our purchases.
- Opportunity Costs
Children need to understand that purchasing something at the moment, might mean they are unable to purchase necessities later. It might even delay them from accomplishing their main goal.
Teach them the importance of giving to help them understand the importance of generosity. Show them they can assist others through funds, time, and resources they are not using.
Act Now: Set up a Savings Plan
Once a child understands the importance of saving money, it’s time for them to hold themselves accountable and save.
- Set up a savings account
Take them to your bank and involve them in the process of opening an account.
- Let them make their own money
Give them an allowance or let them have a summer job. Be supportive and help them respect their commitments.
- Help them track their spending
Show your kids how to log their earnings or set aside time to review their bank statements.
- Offer savings incentives
You could offer to match their savings contributions, or you could offer a reward when your child reaches a milestone.
- Let them make mistakes
Making financial mistakes can help children learn from those mistakes when they’re young. They’re less likely to make those same mistakes when they’re older.
Your Job: Set a Good Example
If you want your child to understand the importance of saving, you must hold yourself accountable. Fixing your finances won’t be easy. If you want your children to learn about savings, you need to keep the conversation ongoing. That could mean scheduling weekly check-ins or making chats about your child’s financial goals a daily discussion.
It's important to remember that teaching your child to save is not just about helping them become more financially literate, it's also about building a strong foundation for their future and instilling in them the values that will guide their decisions as they grow older. Teaching kids how to save money will help them develop good habits when it comes time for them to manage their finances later in life--and those habits could lead them toward financial success!
ABOUT THE AUTHOR
Lindsie Wharff is a Marketing Specialist at Altabank. She specializes in social media and marketing content and enjoys helping people learn more about their finances.