When you look at your young children, it can be tough to decide how much responsibility you want to add to their lives. You know that they need knowledge and training to get by in the world, but it can be hard to take away from their innocence and carefree childhood.
Instead of just ignoring the need to teach children how to save, consider turning it into something fun and exciting that retains the joy and fun that any childhood should include. Even if your children are very young, it can’t hurt to have a look at the best savings rates and start planning.
Making Learning Fun
There’s no need to gather up the kids and start lecturing on the finer points of finances. They aren’t going to understand most of it. Kids need to understand things on their own level, so start by explaining savings in a way that will make some sense. For most kids, it starts with a trip to the store.
How many times have your children asked for a toy or some gum as you go to check out at the store? You probably tire of hearing their requests and you may not always have a good answer for why you aren’t buying something for them. This is the perfect opportunity to start talking about savings and what it can do for them.
Start by showing them exactly what they would be able to buy if they had their own money. While a piece of gum or even a small toy may be something they can buy right away, you know that they will ask about larger items too.
At this point, you have the ability to explain how saving money works and how it can benefit them. In this way, you aren’t taking away from an enjoyable childhood. Instead, you are giving them the ability to purchase things on their own. Some might say you are empowering them to gain personal satisfaction when it comes to saving and buying things they want.
Encouraging Them Along the Way
One of the best ways to make learning fun is to ensure that your kids are successful from a very young age. If you give them something to look forward to, they will continue to work towards the goal.
This won’t be a stressful experience if they are receiving positive reinforcement and gaining an appreciation for their hard work. Do your best to show them how beneficial this can be.
Consider matching their funds. If they save a quarter, you add a quarter. Small children often have a hard time waiting for an extended amount of time to save. They want to see the results right away.
In order to remove the frustration and keep them interested in saving, match their savings. Start out small and watch how their account grows. When your children are older, you will be ready to take them to a bank to open up their own account.
The earlier you start, the better. If a child has learned how to save early, it will be no problem to continue saving throughout their lives. Other kids that don’t learn about money until they are older will have a tough time putting their money away.
While your children are saving money from their first real paychecks, other kids will be steadily spending and struggling to put even a few dollars away for a rainy day.
Don’t put off teaching children how to save. If you do it right, it will in no way take away from their innocent, carefree childhood. Instead, you will be instilling a skill in them that will help them throughout the course of their lives. Make sure that you make it fun and do all that you can to encourage them along the way.
So, do you teach your kids to save money?
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Should We Be Teaching Kids To Save Money? — 19 Comments
I so agree that we should teach kids financial management. It will not only educate them how to earn and save money and but also develop their sense of financial responsibility.
You definitely need to get kids started at a young age with frugality, just as with any other virtue you want to teach them. I never considered profit matching the saving funds for children, a quarter for a quarter, that’s pretty clever.
I have 2 nieces, one is 5 the other is 3. My mother buys them toys and tons of other miscellaneous things all the time, and I’ve bought stuff for them as well. We need to start somehow start teaching them how they can start ‘buying’ these things with ‘their’ own money. I’ll have to come up with some ideas when I see them again this weekend.
We usually had to split things 50/50 with our parents. If we wanted something we had to save our allowance and pay for half. It was quite effective in getting us to learn how to set priorities and take responsibility.
Let me know what you come up with for your nieces.
I would teach them about saving their own money. I think the key to not adding too much responsibility and worry to their lives is not letting them know about the adult finances. Set a good example for sure, but let them worry about their Christmas/birthday/allowance money. Don’t openly talk about your own bills.
Good point. There are ages where sharing personal finances of the family with your kids is inappropriate. As they get older though I think this is totally reasonable.
I don’t have kids but I definitely will be teaching my future kids. I wrote a post about how I became a saver at my blog and I hope to do something similar with my future kids.
Interestingly, I have been thinking about this one lately. And what I have concluded is that, as usual, we are probably focusing on the wrong thing. It seems more important to teach children how to spend money than how to save it. Does this make sense?
I completely agree! This post is awesome! Kids do need to learn about money and savings. Would you rather take away a little from their innocence now or build them up to be miserable and in debt the rest of their lives?? We have our daughters save up for things usually. My oldest wanted a wii and we made her save for it. And when she wanted games, she had to save for those too. It seemed to work pretty well at teaching her about money. And when we’re at the store and she asks for something, she understands when we say no because mommy and daddy are saving too. So it works out well. The younger one is having more trouble understanding. 🙂
I like your strategy. You are right. Innocence isn’t as important as saving them from failure later. I am going to try something like you have with my own kids.
I am a big advocate of teaching kids the value of money early on in their lives. Our schools do a poor job of teaching this subject. I also liked your idea of matching fund. It’s a great way to motivate them to save more.
Our schools do a bad job indeed. It seems that some of the basics people need to succeed in life are not even part of the curriculum these days. It is a real sad state of affairs and future generations are paying for it.
When you look at your young children, it can be tough to decide how much responsibility you want to add to their lives. You know that they need knowledge and training to get by in the world, but it can be hard to take away from their innocence and carefree childhood.
I so agree that we should teach kids financial management. It will not only educate them how to earn and save money and but also develop their sense of financial responsibility.
Good stuff Manette. That is how it should be. I would also teach them about giving back and making donations a priority.
You definitely need to get kids started at a young age with frugality, just as with any other virtue you want to teach them. I never considered profit matching the saving funds for children, a quarter for a quarter, that’s pretty clever.
I have 2 nieces, one is 5 the other is 3. My mother buys them toys and tons of other miscellaneous things all the time, and I’ve bought stuff for them as well. We need to start somehow start teaching them how they can start ‘buying’ these things with ‘their’ own money. I’ll have to come up with some ideas when I see them again this weekend.
We usually had to split things 50/50 with our parents. If we wanted something we had to save our allowance and pay for half. It was quite effective in getting us to learn how to set priorities and take responsibility.
Let me know what you come up with for your nieces.
I would teach them about saving their own money. I think the key to not adding too much responsibility and worry to their lives is not letting them know about the adult finances. Set a good example for sure, but let them worry about their Christmas/birthday/allowance money. Don’t openly talk about your own bills.
Good point. There are ages where sharing personal finances of the family with your kids is inappropriate. As they get older though I think this is totally reasonable.
I don’t have kids but I definitely will be teaching my future kids. I wrote a post about how I became a saver at my blog and I hope to do something similar with my future kids.
I read that post. You had some great ideas. We plan on doing something similar when we start a family.
My hypothetical children are being taught all about money. 🙂
lol. Well at least you will have worked out what works and what doesn’t when the real kids come along.
That is a great idea. I remember counting my pennies as a kid. It was a great motivator.
Yes and I taught our kids to save 50% of all the money they received. I feel savings has helped me achieve most, if not all of my financial goals.
50% is a good rule. I am hoping to instill something similar into my kids.
Interestingly, I have been thinking about this one lately. And what I have concluded is that, as usual, we are probably focusing on the wrong thing. It seems more important to teach children how to spend money than how to save it. Does this make sense?
That makes sense if you are teaching them to spend it on retirement savings, investments, and ways of increasing their wealth.
I completely agree! This post is awesome! Kids do need to learn about money and savings. Would you rather take away a little from their innocence now or build them up to be miserable and in debt the rest of their lives?? We have our daughters save up for things usually. My oldest wanted a wii and we made her save for it. And when she wanted games, she had to save for those too. It seemed to work pretty well at teaching her about money. And when we’re at the store and she asks for something, she understands when we say no because mommy and daddy are saving too. So it works out well. The younger one is having more trouble understanding. 🙂
I like your strategy. You are right. Innocence isn’t as important as saving them from failure later. I am going to try something like you have with my own kids.
I am a big advocate of teaching kids the value of money early on in their lives. Our schools do a poor job of teaching this subject. I also liked your idea of matching fund. It’s a great way to motivate them to save more.
Our schools do a bad job indeed. It seems that some of the basics people need to succeed in life are not even part of the curriculum these days. It is a real sad state of affairs and future generations are paying for it.