How do you teach your kids to be savers and not spenders? The benefits of these life lessons are endless, think “early retirement” here! Experts say teaching your kids about money can actually be fun, too. In fact, some adults say what their family taught them years ago still sticks with them.
Peter Wilkes remembers the early days of savings. “My mom had a bank account for me with one of the old booklets.”
Molly Terry says, “My grandmother from Latvia has always taught me,’ Save for a rainy day’. This could be a savings account, a money jar or a show box under your bed.”
The American Bankers Association (ABA) points out you can start with simple lessons. For example, drinking one less soft drink a day can save $22 a month, and adds up to $264 a year. What should they do with that spare change they have left over from the lunch lady? Saving fifty cents a day will net them $180 in a year!
Corey Carlisle, ABA SVP of Bank Community Engagement advises, “It is so vitally important to develop your kids’ savings habit early because it has benefits far beyond dollars and cents. Kids who save are more likely to go to college and graduate – three times more likely. Another long-term benefit is kids who understand finances tend to be less materialistic, have better self esteem, and tend to do better in school.”
Tips on how to teach your kids to save
The ABA has some pretty cool tools that help teach your kids about savings, including easy finance tips like:
- Explain the difference between needs and wants, the value in saving and budgeting, and the consequences of not doing so.
- Set up a chore chart and give your children an allowance for completing their tasks. Require them to save at least a small portion each week. The three jars method, one for spending, one for saving, and one for charitable contributions is a good way to impart a sense of responsibility.
- Open up a savings account at your local bank for your children and take them with you to make deposits, so children can learn how to be hands-on in their money management.
When is a good age to start teaching your kids about money?
“It’s never too early to start,” says Carlisle. The ABA just created a new road map to help parents teach kids financial responsibility at every stage of their life, even in preschool.
What do you do to help teach your kids to save money?
Parent Aimee Paracchini makes her kids put half their earnings in the bank and they can spend the rest. How’s that working? She says, “One puts in more than half and the other begs not to save any!”
Let us know how you teach your children about money in the comments section below.
