Like most valuable life lessons, it’s never too early to teach your kids to save money. Nurturing your children to be savers instead of spenders is a smart strategy and one they will undoubtedly thank you for in the future.
To Start: Take Inventory
Not a saver yourself? Not to worry.
You can still embrace these tips to help teach your kids to save; just chalk it up to a “do as I say, not as I do,” piece of parenting. (We all have those).
Fortunately, there are plenty of resources available that support teaching kids the value of saving. Each year the American Bankers Association (ABA) designates a specific day in honor of this important skill.
Observe this Opportunity
Mark your calendars! This year’s Teach Children to Save Day falls on Thursday, April 22.
The fact that this day was even created speaks to the significant lack of understanding and consumer confidence when it comes to financial matters.
While it might seem unrealistic to teach smart financial strategies to children when so many adults struggle to recognize — let alone master — them, the fact is that financial literacy is best introduced early. We like to think of it as similar to learning a foreign language. The earlier the better (and easier!)
So, what sorts of tips will help teach your kids to save their money when spending it is so tempting?
We’ve got four for your consideration…
Tip #1: Pay it Forward
Consider this an investment in your child’s education. We’re talking about chores and allowance. Letting them earn some money on their own in exchange for those things you want or need doing around the house is a great way to get buy-in (pun intended) and have your kids eager to help out to earn money that they can then use however they please.
The trick, of course, is ensuring that their preference is for saving not spending. Once they’re making some money of their own you’ll have an easier time guiding where that money goes.
Speaking of which…
Tip #2: Set Aside a Special Space
Novelty is key when it comes to getting kids on board with a new idea or habit. In this case, you don’t need to shell out extra money for a porcelain piggy bank; wrap an old coffee can in a paper that they can decorate themselves is special enough to store their savings. The trick is to give them a space to save their money at home that is uniquely theirs.
Ideally, you can designate a special day to drive to the bank and deposit the money they have earned into their special savings account and explain why it’s safer to do that than let the money build up in a place where they could somehow lose it.
So, with tips #1 and #2 you’ve got your kids earning money, saving money, and now it’s time to start stretching.
Tip #3: Saving for Special Spending
Kids will go along with tips #1 and #2 for only so long before needing additional incentives. In other words, why? Why are they saving?
If it’s for the sake of saving, you’re already sunk. You need to help isolate what really matters to your child — and no, this cannot be food, shelter, electricity, etc. — those essentials are on the adults.
You need to find out what they really want; focusing on a desired good or experience will inspire them to save more and faster.
And maybe they don’t even know what they want, exactly, but they do know they love Target, for instance, and would like the ability to shop for whatever they want at a certain time. In this case, they are saving for a little shopping spree with a designated monetary value or a gift card that they can tuck away and spend when that new thing they have to have hits the shelves.
Tip #4: Show Some Support
Whether you isolate a set amount or want to reward the habit of saving, you can support your child’s efforts by “matching” or rewarding towards an important purchase or simply in celebration of their progress. Make a deposit into their savings account and hype the hard work they’ve done!
Let Us Help!
At Franklin Savings Bank we offer a Kids’ Savings Account for children under the age of 13. All it takes is 50 cents to open and, in light of tip #4, we show our support by making it possible for your child to earn points in exchange for all sorts of prizes. And, they will earn free money in the form of interest for daily balances of $0.50 or more for the calendar month. Watch their money grow faster!
Contact us today when you’re ready to partner on smart saving strategies for your child.