Teaching Kids to Save Money

Monthly budgets and emergency funds help parents stay disciplined and responsible with their household incomes.  Teaching your children about the importance of saving money is essential when it comes to their futures, so they will not have to live paycheck-to-paycheck. It is a pretty complex topic to discuss with them, but have no fear! There ARE simplified educating techniques. Here are a few ways you can point them in the right direction!

Piggy Banks

This is the most simplistic, obvious idea that can help guide your children to saving money. Write out a chore chart on a white board and hang it up in the kitchen and allow your children to earn money after fulfilling their chore obligations. If they want a certain toy, possibly adding a picture of it right next to their name on the chart, as a goal, will push them to do as many chores as possible. Clean up and decorate an empty peanut butter or pickle jar to place the coins and/or dollar bills in, so they are visibly seeing their cash build up. You are showing them that hard work pays off. Encourage them to budget their allowance, setting a small percentage aside for tithing or charity, another percentage aside for savings and the rest can go to whatever they would like. It’s important that they are able to reward themselves for their hard work.

Monthly Budget Meetings

If you and your spouse hold a monthly budget meeting together to verify your financial status, get your children involved. Explain to them where each dollar bill goes and why. Children, in general, do not realize that it takes money to have certain things, such as a car, house, electricity and food, so when you routinely explain where money is placed in the home, it helps them to better grasp the concept of saving money. Share money saving tips around the house with them, such as shorter shower times and turning off lights. Allow them to ask questions about the budget and find out what THEY would do with the income if they were earning it instead.

Birthdays and Holiday Savings

Some of the financial stresses are around birthdays and holidays. Show your children that you can make simple and cheap, but fun gifts during these times. Instead of spending $20-$30 on a present, spend a few dollars on construction paper, glue and other crafty items. Show off their creativity by helping them make their very own coupon booklet for a friend or a relative. Drawing a colorful picture and placing it in a picture frame is another great idea.

Cut out Coupons

Get your children involved each week to clip coupons from the newspaper. Then have them do a scavenger hunt through the newspaper ads to see if they can find any good deals with the coupons they clipped. Help them understand that couponing allows the extra money saved from shopping to go into the savings account, or go to other things you need.

Shopping Trips

Most parents do not like this idea, but it is extremely helpful when teaching your children about saving money. Write out a list and take them grocery shopping with you. Yes, you WILL have to say “no” a time or two to them, but there is no better time than to explain WHY you are saying no. It is imperative that you are sticking to the list because it saves the family money.  Let them check off the items that you have already placed in the shopping cart. If they hear it and see it, then they will be more apt to follow in your footsteps. Do not forget those coupons!

Play Pretend

What kid doesn’t like playing pretend, especially when parents are involved? Have some fun by using fake money or real change from your own savings jar. Then, bring out their toys and set up a pretend store in your living room. This will not only be entertaining for them, but they will also be educated with math problems and money usage. Explain to them that things costs money and have them count out how much money they have, how much the item costs and what they have left after every transaction. You can also use this opportunity to play the world famous games, ‘Monopoly’ and ‘The Game of Life’ with them. They revolve around money and purchases, which is perfect.

Children do not fully understand the financial perception, and it is not always an entertaining topic to discuss, but parents can find fun ways to teach them about the advantages of saving money. Including them is not only a great approach to discuss financial situations, but it is the best way to spend some quality time with them. Be the role model. That is the only, REAL technique that works. You have to set the example and allow them to see it in all that you do. They will learn to be savvy when it comes to money when they grow up.

Kristin Willis is the founder of the blog, Coupon Friendly and a stay at home wife and mom of 4 children from Springfield, Missouri. She’s been writing for 2 years and has a passion for it as well as theater arts and music. Kristin is also a regular contributor to the CareOne Debt Relief Services blog, a community that provides debt consolidation and money-saving advice. 

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