This is a partnered guest post.
When they are very young, many children believe that money grows on trees – or at least inside the purses and wallets of mom and dad. It is up to parents and other adults to help children understand where money really comes from and get them into the habit of saving it. From the early days of the piggy bank in the corner of the bedroom to the thrill of taking control of an account in a real bank, there are many ways to encourage kids to take saving seriously and build up their own pot of money for the future. Here are a few ideas on how to get them started.
Teach them to save early
It is hard for kids to learn the importance of money if it is only ever given to them in the form of an allowance or as a gift. It is better to show them where money comes from – and the importance of saving it – by allowing them to earn it doing some simple chores around the house. This will cause the child to make the connection between working and wages. These chores can be very simple tasks to start with: tidying up and putting toys away or helping to feed and look after the pets are examples of the kind of simple tasks even very young children can do.
As they get older, domestic chores such as loading and emptying the dishwasher or making the beds can add to the number of earning and saving opportunities, and children can be encouraged to look for other opportunities outside the home, such as babysitting or taking neighbors’ dogs for walks. You can also rope them in to help with a yard sale – teaching kids some basic business skills when they are young helps to equip them for the world of college and work when they leave home.
How children can save successfully
If left to their own devices, most children will spend whatever money they get as quickly as possible; however, they can easily be taught that money should be saved and used in different ways. Saving for the future is, perhaps, the most difficult lesson to teach, but once they understand that they are building up funds either for a special purchase when they have enough, or for a much longer-term goal, they should get the idea.
Opening a savings account with a child is exciting for them, as they get familiar with the figures they see on a bank statement and what those figures mean in real dollars. They can also be taught to understand interest, and watch as their money is added to in a different way.
Not all money, earned or otherwise, needs to go into savings. Children should be allowed to keep some money available for day-to-day living and enjoyment. If they can also be taught that not everyone is as fortunate as they are and be encouraged to give some of their earnings or allowance to charity, that will also serve as an important life-lesson for the future.
Getting the right balance
Although understanding finance is a serious business, children should be encouraged to see the enjoyable side of managing their money, saving it, and watching it grow. The development of online banking enables savings accounts to be set up that can easily be accessed by the child saver with high levels of security, and a click here will open up many possibilities to consider.
Grandparents, other relatives, and friends can also play a part in teaching children to save, and that early start will give kids the confidence to manage their money wisely as they grow into adulthood.
