3 Easy and Effective Tips on How to Teach Young Children to Save Money

Teaching young children how to save money is actually not an easy thing to accomplish. Most of the times, they want to spend the money pronto as soon as they receive it.  Oftentimes, in order to encourage small children to save their money, you may have to show them the advantages of saving, in exaggerated ways if you have to.  By the time they begin to understand the concept of saving and apply what they have learned, then you can ease back a little bit.

Below are some tips on how you can teach young children to save money:

1.  Encourage children to set goals – If they want you to buy them an expensive toy, simply hang up a drawing of a giraffe with a long neck or an empty thermometer, anything that can provide a “visual measuring item” for the children.  As they save up the money they receive, you color in the giraffe’s long neck or the thermometer.  Children typically rely on visual aids, so they will definitely feel happy whenever that color goes up.  By the time they reach their goal of getting everything colored up to the top, then it is time that they have saved up enough money to purchase their expensive toy.

Children Saving Money2.  Open a Savings Account for Children – Encourage your children to deposit a portion of the money that they earn into a savings bank account, monitor the interest earned, and show it to them.  You can even teach them a little bit about bank rules and what the bank does to their money.

3.  Match Savings – This is one great way to encourage a child to save.  For every dollar your child manages to save, show them that you are willing to put a dollar as well to match their savings.  When they are still little, it may be fairly easy for you to match their earnings by 100%.  When they become older, you can make an agreement that you will still match their savings by 25% up to 50%, which is still a very reasonable sum to encourage them to save.

For any effort put in by the children you teach about saving money, praise them for any amount of money they’ve managed to save up.  Even if your child seems to waste his/her money buying things they want, encourage them to keep on saving.  After all, children are still children.

Closing Thoughts

The tips mentioned above are just some of the guidelines you can use to help children learn how to save some, if not all, of their money they get at their young age.  Do try to remember about your own childhood, and see if you can recall a time when your parents (or other adults you know) took their time just to teach you something about saving up some money for your future.  If you don’t recall any saving-money advices from your elders, then all the more reason to teach your own children about the importance of saving up!  Did you know that the average person carries almost $7,000 in credit card debt, and 50% of elderly individuals have less than $25,000 saved up for their retirement? It’s really sad if you don’t save up until it’s too late.  In order to prevent such money-related disasters from happening to your own children, begin teaching them at an early age.  Even if they don’t fully understand it yet for now, when they get older, they will surely thank you for trying to educate them about personal finance and the significance of money.

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