Helpful tips for parents on teaching kids to save money
Part of your job as parent is to teach your children to save money and be responsible. Many times, this is easier said than done. Kids love to spend money. It’s a fact. So what’s a parent to do? Here are some tips to help you teach your child important lessons about how to save money.
1. Make kids work for an allowance
Don’t just hand your kids an allowance each week. This teaches kids that they can get something for nothing.
Have age-appropriate chores assigned to each child. Teach your children how to do their chores correctly and post their list of chores where they can see them.
Only give your child his or her allowance if they have completed all their chores.
2. Teach them to budget
Money a child earns should be his. But, when children are young, they need guidance. Just as adults have to learn to budget their money, children should learn to budget theirs also.
A good model to follow is to let the child spend 80% of their money any way they please (within reason). The next 10% should be saved and the last 10% given as tithe at church or to a charitable organization.
This teaches children to be responsible with their money, save, and give back to others. You can use this method with allowance, birthday, and Christmas money.
3. Set up a savings account
If you require your child to save a portion of his allowance, put it where your child doesn’t have access to it or preferably set up a savings account. An ‘official’ savings account makes kids feel like adults. It’s also a way to keep the money out of reach and they watch their savings grow with interest.
4. Make older kids work for spending money
When kids reach working age, they should get a job. Teaching kids they must work for something they want teaches them to value their belongings. Your teenager will take much better care of a car she worked hard for than one given to her without any cost.
5. Teach kids the difference between needs and wants
Kids want everything their friends have and the latest and coolest gadget. It’s important to teach your children the difference between wanting something and actually needing something.
Making your child pay for something they think they will die without helps bring this lesson home for them.
6. Teach shopping skills
As your children grow, use every opportunity to show them smart shopping skills. When the family needs a new car or major appliance, show them how you shop for sales and comparison shop.
You can even do this at the grocery store. Explain how you prepare a menu for the week, how much you have to spend for meals and how much to use for snacks.
Teach your children restraint so they don’t go in debt as adults buying things they want but can’t afford.
Keep your lessons about spending and earning money appropriate to the age level of your children. Teaching children to save money is a lifelong process but well worth the effort.