Teaching Kids to Save Money

Teaching kids to save money is a parental responsibility and should begin as soon as a child shows some initial interest in things related to money. It is always nice if they are able to count and have a rudimentary understanding of basic math like addition and subtraction. If not, you can use the subject of money to start a math foundation.

The methods one uses to educate a child can vary widely but all should be simple to understand and fun. Some children will begin to have questions, thoughts, and ideas about money at a very early age while others will show little interest until they get into elementary school years.

Either way you'll need to judge this and base your techniques and tactics for educating them about money on your child's interest. You should also consider your feelings and ideas about money and your level of understanding of financial matters.

Early childhood ideas about money and saving are formed by the way kids see their parents act, discuss, and use money. Any family conflicts about money, spending, or saving should not be conducted in the presence of small children, they simply don't have the ability to understand all the issues at stake.

Instead, all your talks about money with young children should focus directed on them. As a child gets older they know more and want to learn more. You should use this natural curiosity to relate spending to real life situations, show kids how money is needed to pay for things in life, and along the way keep teaching kids to save money.

Money Saving Ideas for Kids

• Teach kids the basics about spending and saving money with games. Young children can begin learning by looking at coins and counting with them. Older kids can play games like Monopoly to begin to understand the relationship between money and property.
• You can make a game out of grocery shopping. Depending on your child’s age you can have them help you with coupon cutting, organizing coupons, tracking your total bill in the store, picking a less expensive item when it will do, or weighing and calculating the cost of produce. Just make it fun.
• Show a young child how to sort coins by size, shape, and value. This is simple to do and is the beginnings of teaching your child algebra.
• When your child asks questions about money or how much things cost you should answer them when it is appropriate and divert them to a more suitable money subject when it is not.
• Children often get monetary gifts like cash gifts on special occasions like birthdays. Once this begins you should consider opening a savings account at a bank, or even better a credit union, in the child’s name. Then show them how to deposit and save a portion of their loot.
• U.S. government savings bonds are another common birthday gift, though they are not always appreciated by young kids, they are an excellent savings device. You will need to explain to your child exactly what they have received and how it will grow over time.
• Giving your child an allowance that is based on completing certain chores will teach them valuable lessons they will need to fully understand later in life.
• Setting an age appropriate goal for your child’s saving account, whether it’s a piggy bank or a real bank, teaches them early lessons about restraining spending and the time value of money.

Making these basic tips part of your own personal finance management plan will get you started teaching kids to save money. A strong financial foundation is necessary for any child to blossom into a financially prudent adult.