Becoming parents has changed our lives for the better, financially and otherwise. With all the joys that come with watching our little one grow, the responsibilities are also coming up fast. Even though she’s tiny now, we’re imagining how she’ll grow in the years to come.
For example, one of the goals we have is for our little one be financially savvy with her money when it comes time for her to move out.
Raise a Super Saver
Here are five ways parents have successfully gotten their kids into saving their money.
1. Match their savings: Low interest rates can be great if you want to refinance a loan, but it’s terrible for savers, especially young ones. With banks paying pitiful rates right now, parents might want to boost the return on the account by offering a match. Depending on their age, you perhaps may do a 1 to 1 match with their contributions. If they are older and can save a bit more, you can still choose to create an incentive by giving a bonus on a monthly or quarterly basis.
2. Have them be a part of the team: This year for the family vacation perhaps you can involve your kids with the spending plans. Everyone one who pitches in the pot can have a special activity planned. Perhaps your little one can save up for an ice cream shop visit after visiting the park. Plan ahead and help them to see how much certain activities cost. Perhaps the kids can team up for a common goal – a win-win for the family.
3. Make it a contest: If your child loves to compete, having a contest with a prize at the end can help show him or her the value of saving for long term goals. If they save up enough for a video game console, like an Xbox by a certain date that you two choose, then offer to get them a game or additional controller.
4. Keep it visual: Let’s be honest – saving money at the bank isn’t the most exciting thing for kids. Help them out by having a visual reminder of the progress they’re making, perhaps a chart or poster of what they are saving up for along with their current savings.
5. Set the example: This is the best way to encourage your kids to save – lead by example. Whether it’s saving for a car, their college fund, or your next vacation, show them that you save as part of your money routine and it’ll be easier for them to follow.
Right now we’re saving our little one’s small savings in an online bank. When she gets older we’ll work with her on using her money to reach her goals.
Thoughts on Kids and Savings
For all the parents reading this, what has worked well for you and your family when it comes to getting your kids to save?