How To Get Kids To Save Money
How can you get kids to save money?
It can be a challenge. Most kids are not born savers. For those savers, getting them to spend their money is the harder part. But that's not what most parents struggle with.
The challenge is with the kids who want to spend it all - sometimes as fast as they can. It's just one part of money management for kids, but it can be a really big part. Here are some ways to get them started.
First, make sure you really do understand their money personality. Most kids are not extreme savers or spenders. They fall somewhere in the middle. If you have a handle on where on the spectrum your kids fall, that helps you figure out what things you can do to help them. It can also help you figure out what won't work which can be just as important.
Second, help them understand that money can be used for many things. This is going to be different by age and by where yoru child is in their money education. Explaining savings to a young child who is five or younger needs to be kept as simple as possible. Even short periods of time like a week can seem like forever to them. So, focus on words like "now" and "later" - knowing that you will be doing plenty of explaining as time goes on.
If your child is older, they will have a better concept of how time passes. And they may even have their own experiences that help them understand. You can ask them to remember the time that they got the latest tennis shoes they wanted right then only to find a pair that they liked better the next week. Or you can walk them through how spending all their allowance on snacks and a movie each week means that they won't be able to buy the lastest video game when it comes out.
Third, help them develop a savings habit. A really good way to get kids to save money by not letting it be optional. It is going to vary by age too. But, in general, a good approach is to have your kids divide up any money they get - from gifts or allowances - into two or three separate groups: one for buying stuff now, one for buying stuff later and one for giving. This is really similar to family budget decisions and a key part of money management for kids.
Then have them keep these different pots of money in separate places. My kids have a collection of piggy banks, mostly as a result of gifts or craft projects. There are also some great piggy banks from Money Savvy Generation that have four different "banks" inside one total bank. Or, keep it low-tech and just use envelopes or glass jars and have the kids decorate them personally.
Habits take time to develop, so be patient. It may take reminders each allowance day or on special occassions to get kids to save money. But once kids get into the savings habit, growing it becomes easier - on you and them. Then, it's time to think about expanding into bank savings accounts, online savings accounts and even more pieces of the money management for kids puzzle.
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