It’s never too early to start teaching your child the importance of saving money. Learning to save helps children reach financial goals and shows how earning dividends helps money grow over time. If you’re a parent, here are five ways to teach your kids about saving money.
Start with a Piggy Bank
A tried-and-true way to teach your child about saving is to give them a piggy bank. Simply tell your child the goal is to fill up the piggy bank with coins and dollars. Help them understand that the fuller the piggy bank becomes, the more money they have for the future.
Open a Savings Account
Once your child fills their piggy bank, take them to your local credit union to open a savings account. Make sure your child counts out their money before they deposit it, so they understand just how much money is going into their account. Cedar Point Federal Credit Union offers youth accounts with great benefits, such as rewards for good grades, online educational resources, and fun gifts for kids. By becoming a credit union member at a young age, your child will begin earning dividends, which helps their money grow over time.
Give an Allowance
In order for your child to save money, they need some sort of income. If your child is a teenager and can work, encourage them to find a part-time job to earn their own money. If your child is young or unable to find a job, consider giving a weekly allowance for doing chores. An allowance instills a good work ethic in your child, rewarding them for doing chores while also teaching lessons about saving the money they earn.
Create Savings Goals
While learning how to save is essential for financial wellbeing, it’s also important to teach your child how to spend. Together, decide what your child would like to purchase, such as a toy, a book, or an activity. Then, encourage your child to set aside a portion of their money every week until they reach their goal. This method will help your child learn that it takes time to save up for what we want. Plus, they will be able to buy something special when they reach their goal.
Lead By Example
The best way to teach your child to save money is to save money yourself. If they see you making wise financial decisions, they will be more likely to make wise decisions too. So, when your child talks about money, use it as a teachable moment. Involve your child in regular conversations about money by discussing how you save your own money, how you decide what to purchase, and how you set a budget.
Starting your child on the path to financial success can be a challenging task. But, by teaching the importance of saving money, your child will be off to a great start.