Helping Children Save

While children are at their highest learning capabilities during the first 10 years of their life, it is imperative that they are taught and molded into proper members of society. Its important that during that time a parent instills in them the importance of saving their money, because spending needlessly can lead to severe consequences, and creating a proper financial foundation will lead to prosperity later in life.

Try to educate your children on the importance of a dollar. Make them work hard for any allowance that they might receive. While this may not seem like the child is learning about saving, earning and saving go hand in hand. If chores are done efficiently, then they will receive their complete pay, but if the child does a less than stellar job, then they should suffer a price cut, and in worse case scenario lose their pay for that chore that week. Split chores into different jobs that they can do, harder chores having a higher payout than the simpler chores that can be done in a matter of seconds. Make sure that the child does have a choice in doing the chores, but if they decide to not to do some they will not be paid as much as they would have been otherwise.

Buy a piggy bank for any children that are “working”. If they are earning some sort of payment, then they should be saving it. While saving their money will be mandatory, they can have the option to save only 20%, the minimum amount for most children and teenagers, or to go higher and have more. This will teach them the importance of saving, and if they save they will have higher amounts for any large “investments” that they may want in the future. If they want an expensive toy, but they haven’t saved enough for it, they won’t be able to afford it, but if they save more than the 20% of their pay, they might be able to afford it in less time than if they just went out and spent all of their money.

Having them play games would be a great way to teach them about personal finance. They could play simple games like monopoly to learn that even if they want something, if they don’t have the money for it, then they won’t be able to afford it. It’s an easy and fun way for children to grasp the concept of a dollar, and it won’t be too stressful for a parent to teach.