Ten Ways to Encourage Your Child to Save Money
Money doesn't grow on trees
Remember that old phrase your parents used to say that made your shoulders sink and your eyeballs go to the back of your head? What was it again? Oh, yeah – “Money doesn’t grow on trees!” As products of our parents we catch ourselves repeating these very words to our own offspring.
Support your words and teach your child the logic behind that statement. Perhaps there's a new bike or game console that your child would love to have. Encourage them to save for it and to earn the money themselves by doing odd jobs for you, their grandparents, a friend or neighbor. Chances are, by the time they've saved up enough money they'll have thought twice about spending it. Or, they'll walk away with the toy and newfound appreciation for the value of a dollar and how hard they had to work to earn it.
At any age, Members Cooperative Credit Union is here to support your financial goals – large or small. We’ve come up with ten helpful tips to encourage your child to save money:
1.) Have your child set a personal savings goal
Is there a new toy your child is asking for or a special camp they want to attend? Instead of you buying it or having them beg for it, set a goal and have them save for it! Helping your child establish small goals now can create discipline, motivation, and a commitment to achieve larger goals in the future.
2.) Create a vision board
Turn the invisible into the visible by creating a visual like a “money thermometer” they can fill in as they get closer to reaching their personal savings goal.
3.) Let your child make mistakes
Your little one may work overtime to save up enough money for a useless toy they desperately want, and it may leave you shaking your head. Our advice is to hold your breath and let them splurge. Either they will take pride in the toy they bought all on their own, or it will make them think twice as hard before making a large purchase next time.
4.) Pay an allowance, but with a twist
Create a chore chart with a variety of jobs that can earn your child anywhere from fifty cents to $10. Putting groceries away can earn them fifty cents, for example, while detailing the family van can earn them $10. This will teach your child that every job has a different pay scale. In addition, they will learn about the different denominations of money and what they add up to.
When your child receives money for their birthday or other special occasions, insist that fifty percent of the money goes into a long term savings account while the other fifty percent can be used towards their personal savings goal.
6.) Open a savings account with your child and have them actively use it
Bring your child to the credit union and open a youth savings account for them. Kids love to use our self-service coin machines and watch their account balances grow. While you’re at it, set up an online account so they can check their progress any time they wish.
7.) Parent Match
Matching your child’s savings can be a great way to encourage your child to save extra money. It shows that you want to support and encourage their healthy savings habits.
8.) Share their savings goals with others such as grandparents
Instead of them purchasing tangible gifts for Christmas, have them play along by contributing monetarily towards your child’s short-term and long-term (i.e. college fund) personal savings goals.
9.) Lead by example
You’re your child’s role model so provide them with money lessons that inspire them to save. Set an example for your children by taking them with you to the credit union where you deposit your own money into a savings account. Also, teach them the art of delayed gratification – “I really love this sweater, but I certainly don’t need it. Maybe it will be on sale the next time I shop here.”
10.) Cut coupons and shop the sales racks
When you’re out shopping, encourage them to search for the best price and explain why buying one item makes better sense than another. Help them discern between quality, quantity, and pricing.
Little life lessons such as these can equate to major life lessons as your child grows older. Saving for a toy now will help motivate them to save for a car or a house in the future. It’s never too early to teach your child money management skills. Before you know it, they’ll be living on their own and balancing their own finances.
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