Did you know that every year, one day in April is designated as Teach Children to Save Day? Next year it’s April 22. This day gives us a chance to focus on helping kids become smart about money from an early age.
Some children are savers and some children are spenders. Either way, it’s a really good idea to teach your children about money management from an early age. Saving money is both a habit and a skill that takes practice over time to master. Here are some tips for parents with kids of all ages to learn solid money management skills.
Needs v. Wants. Use your own budget to teach your kids about wants versus needs. When you’re out shopping, talk about the items as a need or a want. For example, you might say something like, “We need vegetables, but I also want ice cream.”
Let them earn their own money. When my children reached about the age of eight, I added them to the big chore rotation that includes taking out the trash, doing dishes, cleaning floors, etc. At that point they can begin earning money for chores. We debated on the idea of chores for money or because you are part of a family, and in the end we compromised, which works for us. Experts actually advise against paying for chores, unless you pay for extra chores. Regarding amounts, some say a good rule of thumb is $1 per week for each year of your child’s life. So, a nine-year-old would earn $9 per week.
Set savings goals. Rather than telling a kid to save for the sake of saving, it’s useful to set a goal. Do they want to purchase a video game, buy some cool shoes, or just get to a certain number? Once that goal is set, teach them how to break the large amount down into weekly chunks based on how much they earn, to calculate how long it will take to earn it.
Provide a place to save. Younger children might use a piggy bank or something clear that you can visually see inside. Older children can open a savings or checking account.
Have them track spending. Ask your bank for blank account registers, and even some blank checks. They can keep track in the register and write a check to you to pay for what they want. You buy it for them, they write you a check, and you transfer the money online from their account to yours. We also have a portion of each week’s allowance go to charity. So out of a $5 allowance, at least $1 goes to charity, at least $1 goes to savings, and then they can spend the rest. Very quickly, my children learned how fun it is to see that amount rise and most are very careful in their spending. I say most, because I do have one child who’s a big spender. Spending money is his love language … what can I say? In any case, having them track their money teaches delayed gratification, which is rare in younger generations.
Leave room for mistakes. You know that one child I mentioned who likes to make it rain dollar bills? It kills me to let him do it. Honestly, there are times when I put my foot down, but I have to remind myself that it’s his money. If he wants to spend it on some new Lego set, I should really let him do it. Eventually, he’ll learn that it’s a waste of money. Or maybe it isn’t. Or maybe he won’t. These are teachable moments for all of us.
Teach Children to Save Day only comes once a year, but teaching your kids to save is an everyday job. Making saving a regular part of your child’s financial experience will give them a solid foundation on which to build in the future.
Suzanne Kennedy is a former middle school teacher who lives in Pendleton with her husband and four children.