If this sounds like an impossible task, think again. Teaching kids the skill of saving is very doable, fun and rewarding. Let’s take a look at five ways to teach kids to save.
You can introduce your kids to the concept of saving by using the classic money jars setup. Label three glass jars as follows: spending, saving, sharing. Show your child the jars and explain the purpose of each one – “spending” is for paying for things they want to buy now, “saving” is for larger goals that may take a while to reach and “sharing” is for charitable acts and donations. Talk to your kids about dividing their allowances into the three jars and then let them see their money grow.
Turn saving into an exciting challenge by creating a “Super-Saver Challenge” with your kids. Set large but achievable goals, such as saving a certain amount for a pricey toy or an outing. Encourage them to save loose change, allowances or gifts received. Celebrate their milestones with small rewards, fostering a sense of accomplishment and motivation to save even more.
The best way to impart any lesson to your kids is by example. Model responsible money management by avoiding impulse buys, living within a budget and setting aside money for savings each month. Talk to your kids about what you are doing with your money and why. They’ll pick up on your behavior and learn the best ways to manage their own money when the time comes.
One of the best ways to teach kids to save is by helping them learn to distinguish between wants and needs. Explain what a want and a need is, and then have your kids give you examples of each one. You can share with them how one’s income (or in their case, allowance) should be divided responsibly, first making sure each need is covered before being spent on wants. This will help your kids prioritize how to spend their money and what to save up for as a future purchase.
Once your child has saved up a substantial amount of money, take them to the bank to open up their very own savings account. Most financial institutions offer a form of a Youth Account, though full control over the account is generally only granted to the child’s parent or legal guardian. Your kid’s name will likely be on the account, though, and they may even be provided with a debit card. Keep them updated on their account so they can track their savings and watch them grow!
Teaching kids to save is a gift that will stay with them for life.
