3 Ways to Help Your Child Understand How to Save Money
While some children are great about saving money, others want to spend money as soon as they get it. Teaching children the importance of saving money can be a struggle for some parents. Luckily, there are several things you can do help your child understand the importance of why they should save money.
Create a Goal
Many children, particularly young children, struggle to understand the concept of money. When they see something they want, they want it now, especially if they have the money. They may not understand the reason why it’s not good to buy at this time.
By setting a specific goal, children can better relate to why they should save their money rather than spending it now. With young children, you may need to remind them why they should save their money for something they really want rather than spending it on something they think they want now. Then let them make the decision to either save or spend. If children make an unwise purchase a time or two, the concept of saving money becomes clearer. If they make the decision to save, it inspires them to create healthy savings habits.
Help them keep their savings goal in mind by hanging a picture of the item in an area where they’ll see it regularly. This might be on the refrigerator or on the nightstand beside their bed. Creating an interactive chart that shows them how much money it’ll take to make the purchase, gives them visual of how close they are to reaching their goal. They can fill in squares or cross out boxes as they get closer to their goal.
Put It in a Piggy Bank
While there’s not necessarily a need to buy a piggy bank, it might be a good idea to have a place where your children can put the money they are saving. Try using different envelopes or jars, labeling each of them. One might be for everyday spending. Another might be for a tablet. A third might be money they are putting away for a college savings account.
You may want to encourage your children to put a specific percentage into each jar or envelope whenever they receive money. This shows them that putting less money in the spending jar and more money in one of their goal jars would allow them to buy their desired item sooner. When appropriate, you may even want to put some of the long-term goal money, such as that for college, into a savings account like Marine FCU’s Rainbow or Teen Savings. As the money starts to earn interest, explain how saving rather than spending can result in even more money in the end.
Demonstrate Good Savings Yourself
One of the best ways to teach children about saving money is to demonstrate good saving habits. If your children see you constantly buying new gadgets or never demonstrating self-control when it comes to money, they’ll want to model your behavior.
Show them that you understand the concept of saving by setting a goal of something you want to buy and save alongside them. To create unity in your goals, think about putting a picture of your desired item next to the picture of the item your children are saving for. Then you can also put money in a jar or envelope and fill out your chart as you save money.
Of course, these are just three ways you can help children understand the importance of saving money. Ultimately, the exact method or methods you use may depend on your children. If it appears they are struggling to understand why it is so important to save money, be patient. At times, you may also need to adjust your strategy.
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