Understanding How to Save is an Important Life Lesson
Kids love to spend money. Fact is, if you give them a dollar, they’ll find a way to spend it right away – unless you teach them the importance of saving for the future and how that will affect them.
Start with setting a short-term savings goal. Maybe start with a $12 book or a $60 video game. By setting up a savings goal, kids become familiar with saving. Once your child reaches that goal, encourage them to set higher goals for longer amounts of time. The result will be a conscientious, long-term saver who continually looks ahead.
Teach your kids about retirement plans. This is an excellent concept for kids to learn. You might consider matching everything they save by 25 or 50%. They’ll quickly learn the value of matching funds and be quick to accept and maximize their future employer retirement matching program.
Make saving easy. Find a jar or something see-thru and cut a coin slot in the top. Then encourage your kids to put their coins and dollars in the jar. Over time, the money will grow and so will their excitement. When the jar is full, help them deposit the money into their account.
Try a long-term savings goal. A bicycle is a great long-term saving goal. With careful guidance and long-term savings, your child can save for their own bike. Just be warned, they will be very proud of their new bike, resulting in added responsible behavior, improved self-confidence, and a feeling of accomplishment.