Saving Money – Ways to Teach your Kids

 saving money

Have you taught your kids about saving money?

Saving money is a fairly simple concept on the surface, but when you try to give that information to a young kid it becomes a bit like trying to explain quantum physics. Kids and saving money simply don’t mix most of the time. They see things rather simply…I have money, toy costs money, I buy toy. It is our job as parents to break that thought process and show them why it is better to save money than to buy the toy. I am constantly trying to tell my boys about money especially when we are at the store and they ask for every single thing they say. Often times they have no clue what I mean. My three year old is starting to grasp it a little bit when I say “ok you can have it but we have to take the money out of your piggy bank.” He hates the idea of taking the money from HIS piggy bank and then will decide he does not really want the particular toy he was asking for. Here are some tips on how to fight your way through this parenting obstacle:

Tips for teaching your kids about saving money:

Offer incentives

Kids love to have something to strive for. If they are not getting the general idea of saving money, give them something better to work towards. If they are wanting to buy a toy bike, then offer to help them buy a “real” bike once they save a specific amount of money. Kids will respond to this type of offer and the lesson won’t be lost on them in the end.

 

Create a visual

When kids can see their money grow, they are much more likely to hold onto it. My son loves adding money to his piggy bank even if it is only a few pennies. Whether it is on a chart or a clear piggy bank, give them the chance to watch their money increase.

 

Discuss options

As kids get older, they will be curious about the bank and how it works. They might even be interested in stocks and bonds and other financial matters. Sit down with them and show them the big picture and what they could do with their allowance {depending on age}. You might be surprised at what your teenager is interested in given the chance. I know that when I was a teenager, even before I started my first job, I was interested in how I could save money. I loved being able to save for something that I really wanted and was proud when I did. Let them gain that same awareness at a young age.

 teach kids how to save money

Allow mistakes and consequences

When a kid is learning about saving money, you have to be willing to allow them to make mistakes. More importantly, you have to let them suffer the consequences of those mistakes. Don’t bail them out when a bad money decision causes them to miss out. It will cripple them in the long run. I am sure you are thinking how could I let my kid fail. Do not take this tip to the extreme. Obviously kids need help and guidance but I am sure as a parent you know the right and wrong situations to apply this to.

By teaching them basic concepts about saving money at a young age you are helping them plan for their future. Here are some Ways to Save Money this Summer that you can do as a parent that your child can see the affects.

 

Have you taught your kids about saving money, please share in the comments below.

This Post Has 3 Comments

  1. Good ideas here; thank you! It is hard to let them learn the lessons — at the Dollar store or on a $120 Ridemakerz car my 9 yr old son paid for then promptly lost interest in — but that’s parenting! My kids love their online savings accounts. I transfer the savings category of their allowance from my checking to their savings each week (they get the spending category in cash) and they love to check it and compare balances.

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