Too often, lessons in personal finance are learned the hard way, when we are well into adulthood and the consequences can be severe. That’s why it is so important to teach your kids financial lessons along the way. Get kids excited to save money early and they may go on to lead a lifetime of good financial habits.
1. Make it Visual
Have kids tape a photo of the specific item they’re saving up for on a jar so they can deposit money into it while having a visual reminder of their goal. Then create a corresponding savings chart. If they are saving up for a $50 video game, draw 50 dollar bills on a sheet of paper that kids can cross off as they save each one.
2. Pretend 401K
Create a pretend 401K and match your child’s contribution to their savings. You might strike a deal that you will add 25 cents to every dollar they put into a savings account.
Give Back to Save
Instead of relying solely on an allowance, encourage kids to have an entrepreneurial spirit and find other ways they can save money. For example, take gently used clothes or toys to a consignment shop and get money back towards something new. Collect cans and sell them back to a recycling center. Help a neighbor organize and work a garage sale for a percentage of the profits.
Source: Jammin 98.3
Do More With Groceries
Turn grocery shopping into a savings lesson. Make a grocery list together, clip coupons, look at ads and compare brands. Take the amount you save each shopping trip and set it aside for a vacation or special family outing. This will show your child that finding simple ways to cut back can lead to big savings that can be spent on the things you love.
Source: All About the Heart
It’s important to teach your kids about spending and saving responsibly, but consider also teaching them about giving. Make giving back tangible like buying and delivering a present to a local children’s hospital versus sending money, so they can really see the impact of their contribution. Also encourage children to keep a money diary. As they enter their teens, don’t be afraid to talk to your kids about investing in a stock.