Many parents want to help their kids be money savvy, but some find it hard to get them to pick up good habits. Some kids just don’t seem to understand that money doesn’t grow on trees.
It doesn’t have to be that way though. If you’re willing to put the effort, by the end of this summer your kids can become super savers.
The key is making savings fun and empowering. Want to start? Here are a few things to keep in mind:
- Give kids a way to be in charge. Making your kid save isn’t going to help them enjoy the process. Give them some power so they can make choices on what they are saving for and how they are saving. Of course, you’re the parent, so you’ll present them with several options that you approve of, but let them pick.
- Let them make mistakes. It’s difficult as a parent to just watch your kid miss a goal, but it’s better for both of you if you do. Missing out on a game or a concert now while they are young is a smaller loss than having them struggle to save up for their first house or business.
- Make games a part of the process. Savings doesn’t have to be a lecture. Today there are free tools and apps that can help your child learn some of the basics of savings. For preschoolers and younger elementary kids, you may find Sesame Street’s money toolkit and site a handy help.
- Celebrate the successes. Just like you and me, your kids love to be praised for a job well done, especially if they’ve put a lot of effort into savings.
Since savings is a habit, you can jump-start your kid by starting off with a game, gadget, or toy they’d like.
Have your kid make a list of things that they’d like to have and narrow it down to one or two things.
Once you and your kid have decided on what to save up for, you can come up with different ways to reach their goal.
Money Has to Come From Somewhere
One of the most helpful financial lessons you can pass on to your kids is that money has to be earned.
Having you swipe a credit card to buy them what they want isn’t doing them any favors.
You’ve worked hard to provide for your family and it’s beneficial for your kids to learn that for themselves. (It might even make them think twice before nagging you for more cash.)
Pay for Chores
While some parents may not want to pay their kids to handle chores around the house such as cleaning their room and taking out the trash, you may be able to come up with some paid home projects.
Depending on their age and ability you may be able to hire them out as an assistant with painting the living room or helping you with improving the curb appeal of your front yard.
They not only see how work and money are involved, they can also get some satisfaction with helping out the family on a big project.
For younger kids, you can have them help you out with washing the dog or sorting laundry.
Speaking of money, it can incredibly helpful to pay your children in cash, even if you’re going save some of it in the bank.
Kids tend to pick up things quicker when they can hold it in their hands.
With school out, now is a great time to help you child earn some extra cash.
Even if they are too young to work formally, you may be surprised at the money making opportunities out there for your kid.
One great place to start is by looking at what your neighbors need help with.
Do you have older ones who could lend a strong pair of arms to help with some chores? Have anyone going out of town who would love someone to take care of their dogs while they are gone? Are people looking for a babysitter?
Even if you have to supervise, having your kid start a little business can teach them how to budget as well as save.
Motivate Them to Save More
They’ve earned their money and made their first deposit, what do you do now? How do you motivate them to want to save?
Bump Up The Interest Rate
Let’s be honest, it’s hard to get kids excited to save money when banks are offering paltry interest rates.
You can make saving a more enticing deal by offering to contribute based on what they put in. There are several ways you can do this:
Have a fixed percentage: You can play it just like the bank and offer a specific interest rate for their contributions.
To make it easy for your budget, you can schedule it for once a month. You can have your older kids chip in even further by having them run the numbers on how much interest they’ve earned from you.
Do a match: Depending on how much your child saves, you may want to offer a simple match for every dollar they put in. (You can always set a maximum amount so you don’t go over budget.)
Make It Visual
If your child is saving up for a new video game or toy, make a chart and mount it on their bedroom wall or the kitchen.
Have a picture of what they are saving up for and track their progress.
Every time they make a deposit, have them update the chart.
You can make it as simple as adding stickers or you can print out a fancy graph – whatever will keep your kid excited.
Your Take on Kids and Savings
I’d love to hear what has worked for you and your family when it comes to kids and savings. When did you start? What tools were the most helpful? How are your kids doing now with saving?