You have taught your children some of the most important lessons in life. You taught them their ABC’s. They learned how to tie their shoes. You have even instilled good manners, as your kids say please and thank you when appropriate. But as parents, we tend to get hung up on so many of the elementary lessons that we forget to start working on the future. Your child may be too young to, say, balance a checkbook, but it’s never too early to instill basic money skills that will stay with them for the rest of their lives. Why do you think parents originally started giving out allowance? It is to start teaching their kids about basic money saving and spending habits.
Here are a few basic steps you can take to start teaching your children about saving money.
1.) Find a Larger Goal for Them to Save For
Is there a large toy or video game that your child has his eye on? Work with your child to help him reach his goal. Draw a thermometer or piggy bank with different levels of cash marked on the side. As your child reaches these goals, fill in the graph. Your child will be able to visually see his progress on the wall.
2.) Match Their Savings
If your child is saving up for an exceptionally large purchase, they can be easily frustrated or discouraged — it’s hard to reach $50 or $100 when you’ve only got a $5 allowance! To keep their hopes up, tell them you’ll match them dollar for dollar: every time they place a dollar in the piggy bank, you’ll put one in too. It’s an external way of encouraging your child to save.
If your child is a teenager, you may want to lower the percentage point. If they’re saving for a car, tell them you’ll match their savings 25% — but if they’re saving for college, you probably want to go as high as 50-100%.
3.) Find Online Lessons and Support
The Internet is full of savvy parents and financiers willing to help out fellow parents. Sites like adstalker.com can help you brainstorm future lesson plans or learn about the importance of helping your child understand basic finance skills.
Learning to save money is every bit as important as ABC’s and 123′s. We teach our children mathematics and spelling to prepare them for the future. Shouldn’t we do the same with basic life skills?