Teaching Kids to Save Money
Teaching children to save money is an important lesson you can start teaching at any age. Personal finance is not typically taught in schools, so starting them off with a good understanding of saving and money at home sets them up for success. Explaining savings to kids can be difficult, and you may wonder how to explain saving money to a child.
An often recommended and easy way to start is by getting them a piggy bank or jar to collect money in so they can see how much they’re saving. But teaching your children about money takes more than just playing with a piggy bank to help them learn lifelong lessons about personal finance.
At Arkansas Federal Credit Union (AFCU), we believe that educating our children about money management is essential to lifelong success. In this article, we cover different ways you can get started helping your kids learn how to save and manage money.
Demonstrate Smart Saving
Young children are very impressionable and learn a lot about how they think about the world as kids. That’s why it’s so important to begin teaching kids to save money and demonstrate how you, as an adult, make decisions to save money.
A lot of parents wonder how to teach kids about money. These are a few of our favorite ways to start educating kids about money.
Grocery shopping is a great opportunity to show the money-saving decisions that you make. You can explain how you budget for groceries, and as you shop can discuss why you choose certain items over others.
Discussing your paycheck is another great way to show your kids how you save money. You can break down your paycheck with them and talk about putting money straight into savings as well as paying for different expenses.
Tracking your spending with your kids is another great way to show how you save. You can keep a written record of your spending and have your kids do the same. Not only does this reinforce that saving money is an important thing that grown-ups do, but it demonstrates the value of money. Tracking spending also presents an opportunity to plan for future purchases. While you might save extra money if you know you’re planning to buy a new appliance, your children might save extra if there’s a specific toy that they want to buy. Planning out purchases in advance and saving for them can help create smart spending habits.
Money Saving Tips For Kids
There are a lot of different things that you can do to teach money lessons to kids. The most important thing to remember is that lessons on savings or money need to be reinforced every few months to make sure your children remember them. It’s also a good idea to keep expanding on your lessons. As your kids grow, your money savings lessons need to grow with them. These are a few of the best ways to start teaching kids about money:
- Create a money jar or piggy bank
- Open a savings account for your child
- Teach them to earn money with an allowance
- Help them set goals for themselves
- Teach budgeting skills and help them track their budget
A good way to start the conversation about money is to ask your kids about things they want to save to buy. This could be as simple as saving for a new toy or wanting a more expensive tech gadget or new phone. Teaching saving money early on can help set your kids up for success in the future with better money management skills.
The younger you start teaching your kids about saving money, the easier it will be for them to understand money as they grow up. By giving them opportunities to earn their money through something like chores or a game night, you can teach them that money is something that you have to work for and that it shouldn’t be wasted.
Start Your Kids Saving Today
Educating your kids about saving money is a great way to help prepare them to be successful with saving in the future. If your kids are young now, it may seem like it’s too early to start thinking about college, but it’s never too early to start saving for college and creating a bank account for your kids for the future that can help them continue their financial education.
Opening a savings account for your kids that you have access to can expand their learning about savings by also teaching them about how banks and interest works. This is a great way to build your children’s savings.
Arkansas Federal offers a variety of savings account options. You can set up a joint checking account with your kid so they can build their savings while you are able to monitor their spending habits. Contact us today at 800.456.3000 or visit one of our local branches to learn more about our savings accounts and how they can fit your needs.