A lot of people want financial success, and even more for their children. We try to teach our children the skills they will need later in life, but it’s important not to overlook finances in this education.
In many ways kids are better savers than we are, in that they don’t have to be broken of bad habits like we do! Still, it doesn’t come “naturally” to most people, so this article is going to overview several tips for getting kids started on saving.
These tips can be used with kids of all ages.
Kids are visual, so a lot of the tips here are about focusing their attention visually on what you’re trying to teach them theoretically. They may not acknowledge “oh great, I can save now!” but they will likely get into several of these tips in a way that will surprise you. Like I said, in many ways, kids are better savers than we are – they just should be taught how to do it and what they’re doing!
Let’s take some time now and go through several tips to get started on saving with your kids.
Tip #1 Get your kids to plan their savings
Kids usually have some ideas of things they’d like to save for. Help them research how much it’s going to cost, and figure out how many weeks it will take to attain that goal. For each goal that they support their savings, give them a sticker to indicate their progress. We all know how much kids love stickers, so you can imagine just how powerful this simple tip is for getting kids saving!
Tip #2 Use a decorated jar or envelope for designated savings goals
As I’ve already mentioned, kids are visual creatures. Let them help remind themselves of what they’re saving for by drawing a picture on a savings envelope, or painting a jar they’ll use to put their coins in. By starting them focusing on what they’re saving for, you’re encouraging both saving and setting financial goals – way to reinforce the lessons with colours!
Tip #3 Match what your child saves
This can be a great way to teach children about interest, and the benefits of saving more than you must. We set up a reward system in our house where the child is expected to save at least 25% each week, but if he chooses to save more then will match it dollar for dollar. This offers him a great way to get to his goals faster, just by pushing himself to save!
Tip #4 Offer rewards for successful saving
If your child saves up, particularly longer term, reward that behaviour with an extra treat like an ice cream or letting them pick the movie next week. This will only further incentivise saving for them, and helps to really re-enforce the lessons from an early age.
Tip #5 Set an example
In all things, know that your children are watching you. So if you’re saving well already, it’s going to be a lot easier for them to start saving. If saving is something you struggle with, make it a family activity to chart your progress and give yourself some stickers too. The more kids can see you enjoying something, the easier they will pick up the habits. So set a good saving example!
Tip #6 Working with older kids
While it’s true that at some point kids start to lessen their passion for stickers, all children have some thing that they want. For example, your older kid is likely just as vulnerable as your younger children are to the power of rewards for savings – they just might have to be more age appropriate rewards (maybe extra time out with friends, or to take the car).
Tip #7 Open a bank account for them
Allowing your children to deposit their savings into an actual bank can often help them to feel important or self satisfied, and may also be a good way to increase their earnings through interest. Encourage your children to open savings accounts when possible, to start putting those dollars to work for them!
Tip #8 Know that your children will make mistakes, and let them!
Understand that, just like you, there will be times when your kids don’t save as they should. Let this happen a few times, it’s a hard way to learn but it will really show them the value of saving if they don’t get what they want anyway. This can be a hard temptation to resist, but it’s important to put it in the learning context to truly see the value of letting your kids crash and burn every now and then – and then teach them how to recover!
Tip #9 Teach your children about short and long term goals
As your children start to develop savings goals, chances are they will be short term – at least initially. But as your kids age one of the most valuable lessons you can impart are teaching them to think about the future, and encouraging them to save for it now! Sit down with your kids and help them think about what they might want, not just this week but next month (or maybe even next year). This will teach them a critical concept that many adults struggle with!
Tip #10 Always talk about money where possible
While it’s true that your children shouldn’t know every detail of your financial lives as parents, make a point to discuss money when you can. For example, while sharing your salary might be off the table, sharing your savings goals might be fair game.
Talking about money also re-enforces that it’s a normal topic and detaches it from the shame so many endure when thinking about their finances. This doesn’t mean including your kids in every bill paying process month, but maybe every now and then make it a point to discuss something new in front of them.
Tip #11 Help your kids to find the best deals they can on the things they want – and teach them to do it too!
I am a bargain hunter by nature, and it is something I have always let my kids see – and even participate in as they age. When we set a savings goal, we work together to find the best possible deal on that item and set that as our budget. This encourages children to bargain hunt as well, but in an effective way that re-enforces the savings goals!
Tip #12 Make saving a game, one they want to win!
The final tip I’ll leave you with is this, kids love games. It sounds intuitive, and it is. Make savings a game wherever possible, and kids will not only want to play, they’ll want to win! This can be done through literal games (like Monopoly or The Game of Life), or games you craft around the house to reward savings and progress! Get creative to encourage your kids to save now, so they don’t have to start from the ground up later.
Teaching kids to save now can save a lot of heartache later, both for you and them. It’s a good time in life to learn (before you have bad habits), so make it as fun as possible and get them engaged with money in a positive way. You won’t be sorry that you did, and they’ll thank you for it!